We need to get each of the Selectmen a flashlight, maybe two. At the last BOS meeting, we got another dose of in-depth analysis of town affairs in a quick blow-off of recent serious, factual citizen inquiries about our municipal electric company.
Recently, the deregulation and unbundling of statewide electric utilities has finally delivered on it’s free market promise of competition driving down rates. The state utilities: Public Service; Unitil; NH Electric Co-op; no longer are in the power production business. They are simply the agents that maintain the local power networks in their consumer’s towns. Customers can accept the spot priced power obtained by the utility, or they can buy their power on the competitive open contract market.
Competition has been heating up, and with statewide advertising campaigns, Wolfeboro citizens are asking why our electric power costs nearly twice as much as the power offered in the solicitations. Apparently the town received a lot of inquiries, because they posted this on the town website. Basically they say that the town’s rates are competitive and that the town operates outside of the purview of the state Public Utility Commission. These outside providers were offering generation rates of 7½¢ per Kwh. The town has been charging 12½¢ for the past few years. That amounts to hundreds of thousands of dollars per year to Wolfeboro households.
A few years ago, the Municipal Electric Department improperly installed a new meter at the new Huggins Hospital. A year later someone realized that the hospital had used half a million dollars worth of power that they weren’t billed for. The hospital apparently didn’t notice it either, and had to go on a payment plan to catch up. Not a word about it was ever mentioned at a Selectmen’s meeting. Apparently our management of the business is so sloppy that half a million dollars worth of electricity can be lost, with the revenue from the rest of the customers picking up the slack. (And the hospital’s accounting is just as bad that they don’t notice their power budget is way off, you’d think they would pick up the phone, hmmmm…)
When the 2014-2016 power contract was negotiated a few months ago, the town manager was circumspect when he cautioned that we might see as much as a cent or two reduction. Last week he said it would be more like three cents. So I’m guessing that the town is feeling some pressure to be more competitive.
So what did the Selectmen have to say? Sarah Silk seems to think that it all boils down to service response time. She feels that Wolfeboro’s response time of 45 minutes vs the Coop’s 5 hours “says it all”.
Reasonable citizens are asking reasonable questions about the town’s electric department. Is it possible to continue to maintain the MED but allow citizens to contract for power on the open market? Does it make sense to continue with the tradition of bulk power purchase every three years in a world that has radical energy shifts every six months? Would we all benefit from smart metering that allows us to make choices about when and how we consume energy? How about a public forum, say every twenty years or so, to see if it all still makes sense?
Sarah thinks the only question we should concern ourselves with is whether the lights stay on in the next snowstorm. Don’t worry your stupid little head about it.
Just after I read the latest Wolfblog I received a mailing from North American Power looking for my business. While powerless to do anything about my/our captive situation this firm was offering a 7.99 cent per KWH rate. Currently the PSNH rate is 9.54 cent per KWH and that is proposed to GO DOWN to 8.98 cents per KHW around July 1, 2013, according to the mailing. It may be dumb on my part to even assume the Town would look at the competitive landscape and adjust their rates accordingly, but maybe we will all be surprised.
I do find it unsettling that with such a small consumer base the MED didn’t pick up on the usage/billing discrepancy for one of the largest consumers of power in their rate area. Someone should have caught it in a basic energy audit.
Thanks for the ongoing work,
Bob, I don’t think you’re being very nice to the Board of Selectmen, particularly Sarah Silk. I occasionally have my differences with the BOS, but they are a very hard working group of individuals who earn the sum of $5 thousand a year, and I sincerely believe that they have the best interests of the town at heart. I pulled up the website of one of those companies that has been advertising on local TV, (Northern Power, maybe?) and after reading the comments on the bottom of the page I came to the conclusion that these advertisements may be just a scam. People were complaining that their energy prices doubled after 6 months, and the service was terrible.
I pulled up a rate page for PSNH, (https://www.psnh.com/downloads/Summary_of_Rates.pdf?id=4294967859&dl=t), and it appears to me that their total rate comes to a little over 16 cents per KWH, while our rate comes to about 15.6 cents per KWH. I find the most important thing about Wolfeboro MED is their capital improvement program. They replaced most of the poles within the last 15 years, and are constantly replacing service lines in different areas of the town. In the next year or two they plan on replacing the main 39KV service line that feeds the town. I have owned my house for almost 19 years, and I can count on 2 hands the amount of power outages we’ve had here. Since the town signed the new contract for energy supply, they have been saying that it amounts to about a 20% drop in our energy costs. That translates to about 3 cents per KWH. Wolfeboro MED does a terrific job, the service is great and the rates are competitive!
Bob, I’m not trying to be nice to the BOS. I’m trying to put the issues that they trivialize out in the open for public comment. You have your opinion, and now it’s out in the open.
The capital upgrade of the town’s lines was a result of years of neglect. When the upgrade was pitched, the town said that the system was critically at 90% capacity and the lines were cooking under summer loads. The new poles were required because the higher voltage of the new lines requires greater height. Past cheap rates were at the expense of a slowly degrading infrastructure that is now being fixed after years of neglect. When the town tells you that replacement transformers and other equipment in some parts of town are not available, it’s because all of those public utilities upgraded their networks years ago.
If I’m going to pay through the nose for power, I’d prefer to have the choice to buy it from a renewable provider. You say the service was terrible from one of the power providers. Bob, they don’t provide service. They are a back office accounting operation that buys and sells energy units that the public utility delivers.
People like you seem to like the folksy down-home feeling of a local municipal utility. That’s fine. I’m asking why the power purchase can’t be unbundled so those so inclined can buy their power from whoever they chose. The town has a low customer charge and delivery charge relative to the large utilities. That’s what they do best. The power contract is another matter, and your anecdotal evidence aside, here is an article from the Union Leader that paints a different picture for thousands of consumers across the state. Nothing has to physically change. It’s all just a bookkeeping function and there is a lot of money on the table for Wolfeboro consumers.
But who wants to actually have a discussion and hear what people have to say?
Bob, you can find many complaints on the internet regarding bait-and-switch tactics being employed by independent companies such as North American Power, and these tactics have been investigated in Maryland, Pennsylvania and Connecticut since 2011. Here is a piece that was shown recently on NBC Connecticut:
Here is a piece of advice from electricitywatch.org regarding these independent companies:
It’s not like we have a choice, but my point is that the grass is not always greener on the other side of the fence. I think that our town officials did a great job with our new 3 year contract beginning on January 1st, 2014!
This isn’t about bait and switch. This is about a provider that made poor decisions. PSNH owns various generation facilities that currently cannot compete with natural gas fueled plants. They have relied on passing on to consumers the cost of the generation component of their business, much the way the town passed on the cost of a bad contract for the past three years. Unbundling allows more competitive suppliers to compete for those consumers’ business. PSNH maintains that their generation facilities are more diversivied and less exposed to fluctuations in natural gas prices, but that is a decision for the consumers, not PSHN. The PUC has allowed the newcomers and the PSHN stockholders will have to take a loss on their investment in uncompetitive generation rather than pass those loses on to ratepayers.
The websites that you reference are cautioning consumers to understand the variable rate offerings which have a low introductory rate but floats up. In the same article they say that a fixed price contract that is below your current supplier’s price is good. Use the analogy of low introductory rate variable mortgages vs fixed rate mortgages.
Sure, the price of natural gas could go up and those fixed rate contracts could cost more next time around. But the renewals will be subject to whatever the competitive forces are at the time. In the end, the consumer wins.
Well intentioned as the town may be, their crystal ball has not been shown to be that great. I’d be satisfied to make my own decisions. If the town is just passing the power cost on to us, why should they care? I can tell you that the big consumers like the hospital, SAU, Brewster, and Plastik would save a bundle. Once again, unless there is something going on behind the curtain, the town should not care who gets paid for the power.
Bob T and Bob L,
Thank you both for the time and effort you’ve put into this discussion. I’ve learned a lot from it.