Most Granite Staters will see a jump between $6 and $18 in their monthly electricity bills starting Aug. 1, as the Public Utilities Commission has approved rate increases from the three investor-owned utilities and the Community Power Coalition of New Hampshire.
The Northeast already has some of the highest electricity prices in the country, in part because of its reliance on natural gas which is subject to global market pressures. This year, the war with Iran and extreme cold spells this winter are contributing to higher costs this fall. Locally, this is the first full year utilities have had to follow a new way to set rates, which advocates say is leaving customers increasingly squeezed.
How will these conditions impact electricity bills for residential customers in the Granite State? And why may they look different for different utility customers?
NHPR has answers to some frequently asked questions below.
How much more will customers have to pay?
The part of your energy bill that’s going up is known as the supply rate. Supply rates are the largest component of a customers’ electricity bill, and they refer to the actual cost of electricity itself. How much your supply charge is depends on how much electricity you use. It is the only part of your bill you have influence over.
The other major part of your bill is the distribution charge, which covers infrastructure costs for the entire system.
But the second-largest power supplier in the state is the Community Power Coalition of New Hampshire, which has nearly 200,000 customers across the state. Founded in 2021, the non-profit coalition has a model that allows municipalities to purchase power wholesale for its residents, offering an alternative to investor-owned utilities, and other options that include more clean energy. The utility companies still supply the customers the power, but coalition members pay different supply rates.
But despite its efforts, in its nascent years, the coalition has failed to offer cheaper prices than utilities, coming under criticism and even losing some of its members.
The new rates going into effect on Aug. 1 offer a mixed bag.
For coalition members serviced by Liberty, their rates will be lower than the default service rate, 14.7 cents per kilowatt-hour to 15.8 cents per kilowatt-hour. But Coalition members living in Unitil and Eversource territory will still be paying more than non-members. In terms of monthly net cost, that will mean $6.47 and $6.11 more on each bill respectively.
Why are rates going up?
Don Kreis, the state’s consumer advocate, said there are three key reasons why bills are going up: a particularly cold winter, instability in the Middle East and a new mechanism implemented by state regulators for utilities to set their rates.
“Harsh winters drive up wholesale energy prices and energy markets,” he said.
The global energy market has been reeling since tensions erupted in the Strait of Hormuz in February and New Hampshire is no exception. Kreis said the ongoing conflict has raised natural gas prices, which is New England’s primary energy source, accounting for roughly half the electricity generated on the grid, according to ISO New England.
Kreis also said fuel oil prices have been impacted. This material plays a far smaller role in the region’s energy landscape, generating only about 1% of the area’s power, but that still is large enough to hit consumers’ bottom line. Kreis says these jumps mean that future prices are also up.
But one of the main drivers in price increases this fall has to do with the way utility companies now have to buy their electricity. About half of the electricity now has to be purchased on a daily spot market, which Kreis says means utilities are incurring costs in some cases that they now have to recover.
“So they're basically charging today and tomorrow's customers for wholesale costs that they incurred in previous winters,” he said.
What role does the spot market play in rate increases?
Starting with supply rates set in February 2025, state regulators ordered utility companies to change how they bought electricity for their customers. Previously, utilities would purchase 100% of the energy for their consumers all at once for a six month period. But the Public Utilities Commission changed that: under the new rules, only half of that energy would be purchased at a fixed price and the other 50% would be purchased in ISO-New England’s daily spot market.
This changed how utilities calculate supply rates, introducing a level of guess work around what the companies think prices will be in the spot market.
“When we're setting this price every six months, what we have to do is we take that 50% at the fixed price. We know what that's going to be,” said Eversource spokesperson William Hinkle. “And we have to set a proxy price or an estimate for the other 50% that we're going to be procuring in that daily spot market.”
But an estimate is only an estimate, and local utilities failed to anticipate this winter’s extreme weather and the Iran war. The rates built on guesses came millions of dollars short of real prices in the marketplace. For Unitil, that was $3 million; for Liberty, it was $9 million; and for Eversource, it was $38 million dollars.
August’s higher rates are designed to recoup these losses.
What does the spot market mean for consumers?
Some consumer and clean energy advocates argue the spot market is detrimental for customers, especially at a moment when climate change is making extreme weather more likely and many families are increasingly struggling to keep up with the rising cost of living.
Joe LaRusso, who oversees the Acadia Center’s Clean Grid program, said the new calculation mechanism leaves consumers vulnerable to risk.
“They really have been set up for a trap, because they have the impression that their cost of electricity is remaining the same. That is, the price doesn't change for six months,” he said. “But in fact, there is the risk that the half of the power that they're getting, that's variably priced, is accumulating a charge that they're going to have to pay all at once at the end of that six month period.”
He said the traditional model offered a more transparent alternative that would spread out additional costs over a six month period, instead of customers being hit with a large spike once utilities realized they underestimated costs.
Kreis said the new model doesn’t make sense if you think of it in another context.
“Imagine if the co-op or the supermarket said, ‘Well, we're going to have to charge you an extra dollar for that granola because we didn't charge last year's customers enough money.’ That's not the way this is supposed to work,” he said.
Nick Krakoff, who directs the Clean Grid at the Conservation Law Foundation, said the new rate formula was a well-intentioned mistake that the PUC adopted after the war in Ukraine in 2022 spiked global energy costs.
“There was a thinking that basically requiring [utilities] to buy energy on the spot market would reduce costs overall,” he said. “That hasn't really been the case.”
LaRusso said the utilities may have been missing the mark because they are inexperienced at making the market predictions they are now required to do, especially as things like weather are becoming more unpredictable.
“If utilities are required to buy half of the power that they're delivering to their customers in this variable market, they're really taking a bet on the weather,” he said. “Because if we have a bout of extreme weather, then we're going to have extremely high energy prices.”
Krakoff and Kreis criticized Eversource for trying to charge customers interest on its losses.
But Hinkle, from Eversource, said the amount of interest added to customers' bills is relatively miniscule, only about one cent of the about 3 cent increase in supply rates. He said the company, which per state regulation cannot profit from supply charges, now owes its lenders interest and needs to make those costs up.
Plus, “this can work both ways,” Hinkle said.
“There will be times in the future where that proxy price we actually set is too high, and we'll end up returning money with interest to customers the next time the rate changes,” he said.
Some advocates like Krakoff said the recent low default utility rates have hurt the CPCNH in the eyes of consumers because they made energy prices seem lower than they were. The coalition does not calculate its supply rates factoring in the spot market, meaning when prices were high, so were its rates.
“We're supposed to have a competitive energy market, but instead, the utilities have this anti-competitive advantage whereby they're essentially charging a rate that's under the market rate,” he said. “It's going to come due at a later date.”
Consumers looking for additional options this fall can also choose from other competitive energy suppliers that provide customers with alternative options.
