How much would electric rates need to decrease to justify the construction of 192 miles of sky-high transmission towers and lines from Canada to Deerfield?
Before you answer that, let’s first look at the component parts of electric rates. The three largest components are 1) distribution – the rate you pay for local wires, substations, transformers and the like to deliver electricity to your home or business; 2) transmission – the rate you pay for the cost of moving high-voltage electricity from a power generator to the distribution system; and 3) energy – the rate you pay for power.
Now let’s look at an actual bill. Electric rates for a typical Eversource customer are about 18 cents/kWh. My electric bill for March was $85.56 based on an electric rate of precisely 18.14 cents/kWh. The distribution rate was 4.2 cents/kWh, the transmission rate was 2.4 cents, and the energy rate was 11.2 cents.
If built, Northern Pass would only impact the energy component of our electric rates.
According to a report recently submitted to the Site Evaluation Committee by the highly-regarded economics and financial consulting firm, The Brattle Group, on behalf of the Counsel for the Public, Northern Pass is unlikely to have a meaningful impact on electric rates. Based on their modeling of the four most plausible scenarios, The Brattle Group “found that NPT could provide New Hampshire customers with retail rate savings between 0 and 0.28 ¢/kWh (in constant 2020 dollar terms) on average from 2020 to 2032.”
In The Brattle Group’s best-case plausible scenario for Northern Pass, our electric rates would decrease by .28 cents/kWh. That’s right – just 10 percent of 2.8 cents.
That would have saved me a whopping $1.12 on my March bill.
Compare that to what I could save if I shopped around for a competitive energy supplier instead of relying on Eversource’s default energy service. I could lower my energy rate by about 3 cents/kWh which would have shaved almost $12 off my March bill.
The introduction of competition in energy generation 20 years ago in New Hampshire, which PSNH and its parent company Northeast Utilities (both now rebranded as Eversource) fought tooth and nail, and the other New England states except Vermont has had a meaningful impact on electric rates. As a New England Council report last fall noted, “while the average residential electric bill [in New England] as a percentage of median income was above the U.S. average in 1996, by 2015, every New England state was at or below the U.S. average.” It’s a completely different story for transmission - the part of our electric rates over which utilities such as Eversource still has monopoly control. In 10 years the average transmission rate has tripled from .8 cents/kWh to 2.4 cents/kWh.
So take out your last electric bill, reduce the energy rate by .28 cents, and recalculate your bill. Then decide for yourself if Northern Pass is worth the damage it will do to our landscape, wetlands and tourism industry.