Many electricity customers across New Hampshire saw big jumps in their bills this month, when the state’s investor-owned utility companies (Eversource, Unitil and Liberty) all raised supply rates.
But there are other pieces to your electricity bill, like delivery charges, that may be nearly as much as supply rates for some customers.
Why is this happening? Let's start by trying to understand what these terms mean.
Breaking down the charges on your electric bill
Supply
In the simplest terms, supply refers to the electricity itself. Traditionally, it is the largest part of your bill and the only part you can control.
Investor-owned utilities in New Hampshire (Eversource, Unitil, and Liberty) purchase that power from third-party suppliers and deliver it to their customers.
Curious about where that power comes from? Check out this explainer from NHPR from 2021.
The supply charge is determined by kilowatts per hour, and utilities set these rates twice a year, in August and February. [Read more about how those rates are determined.]
Powering major appliances, running the air conditioner, using hot water, and turning on the lights all contribute to your monthly supply charge.
Do investor-owned utilities profit off supply fees?
No.
Investor-owned utilities cannot profit off supply rates, because they are regulated monopolies.
What is a regulated monopoly?
The three investor-owned electric utilities in New Hampshire — Eversource, Liberty and Unitil — are considered “regulated monopolies” because, throughout New Hampshire, customers may live in a region where they only have one choice for their electricity, whether it is supply, delivery or both.
Therefore, according to state consumer advocate Don Kreis, the price and terms of service of these companies are subject to regulation and oversight from the state’s Public Utilities Commission.
“The job of the Public Utilities Commission is to balance the interests of the utility shareholders against the customers of the utilities,” Kreis said.
One way the PUC does this is by preventing the utility companies from profiting off the supply rate they charge customers, which they set every six months, in February and August.
William Hinkle, a spokesperson for Eversource, the state’s largest electricity provider, said the price they pay for electricity is what their customers pay, without any markup.
“If our customers choose to receive their energy supply from a community power program or another one of those third-party suppliers, there's no financial or operational impact to the company,” he said.
But, he said, the supply rates have to be high enough so that the company does not lose money. Over the past 18 months, Hinkle said, Eversource set rates that underestimated the cost of energy on the market, which were higher than expected due to the ongoing war in Iran and particularly cold weather.
“We've actually been accruing extra charges from our lenders because we haven't been able to fully pay them back,” he said.
August’s new higher rates are designed to make up these losses, he said. Liberty and Unitil found themselves in a similar position and also raised rates accordingly.
“The supply side is where you see those giant fluctuations,” said Amanda Vicinanzo, a spokesperson for Unitil. “Supply is really determined by what is happening in the market.”
Delivery
Your delivery rate is a group of fees that make up the rest of your bill. These are flat fees paid by all customers, including investor-owned utility customers and people who are part of the Community Power Coalition of New Hampshire.
The delivery rate includes distribution and transmission charges, which are the infrastructure of the entire energy grid.
The three investor-owned utilities not only purchase the supply of electricity for customers, they also build and maintain the infrastructure that gets that electricity to you.
“So things like poles, wires and substations – we're building and operating those things,” said Unitil’s Vicinanzo.
That delivery rate also includes the costs of repairing or upgrading power lines, purchasing new poles and employing corporate staff.
Community power, on the other hand, purchases its own supply, but relies on the investor-owned utilities to deliver electricity to their customers.
As a customer, you cannot reduce your delivery rate based on how you use your power.
The utility companies who deliver electricity set these rates, which are approved by the Public Utilities Commission in a process that Vicinanzo described as “highly regulated.” Unlike supply rates, which change twice a year, delivery rates only change every few years, when a utility files a new rate case.
That process can sometimes take years to hit customers.
“In 2023, we filed a rate adjustment request and implemented temporary rates in October of that year. That rate case was finalized last year, with minor changes made to the temporary rates implemented in 2023,” wrote Liberty spokesperson Pamela Bellings.
How companies profit off delivery
Unlike with supply rates, investor-owned utilities can profit off the cost of delivery, though they are still subject to approval by the PUC.
“Utilities can't arbitrarily decide what investments to do or arbitrarily decide to raise rates,” said Vicinanzo, Unitil’s spokesperson. “The Public Utilities Commission has to determine that those investments are actually prudent and in the best interest of customers.”
Traditionally, utilities would have to present a detailed case to regulators each year to justify their rate increases.
However, last summer, the PUC approved a new rate-making process for Eversource, which determines rate increases based on pre-approved formulas, rather than using the traditional method of proving to regulators that capital projects and equipment are “prudent, used, and useful” in order to pass the expense to ratepayers.
Kreis and state officials asked the state Supreme Court to weigh in on the decision earlier this year. Opponents to the new rule said it could lead to automatic increases in fees without oversight.
Some critics, like Kreis, say that these companies are spending too much on unnecessary projects to drive profits. He also criticized federal regulators for allowing utilities to “earn a ridiculously high return on their investment.”
“All they have to do is say, ‘Well, we're spending to enhance reliability because people hate it when their power goes out. And the only way to keep that from happening is by just spending zillions of dollars on distribution system upgrades.’ ”
Kreis has criticized Eversource’s X-178 transmission line project, which he described as a $400 million dollar project to rebuild a transmission line “just because woodpeckers have been pecking away at a few of the poles on that line.”
Hinkle from Eversource said the project will minimize costs for customers over the long term, as opposed to doing repairs in a “piecemeal manner.”
“This project is essential to ensuring that we continue to provide reliable service to customers in the North Country and making the transmission system more resilient to extreme weather by addressing aging, rapidly deteriorating infrastructure that in many cases was originally built over 50 years ago,” Hinkle wrote in a statement to NHPR. He said currently about 40% of the transmission line’s structures need to be replaced and said that number will continue to rise in coming years.
Tracking rising delivery rates
Data shows that these charges have been going up in recent years.
The average Unitil customer in the state saw their distribution charge jump nearly $10 a month from 2022 to 2026. Coupled with increased supply rates, monthly bills are up $13 on average now compared to four years ago.
Vicinanzo, with Unitil, acknowledged the increased strain these rising costs can have on customers, but said investments allow the company to better serve customers and can help keep costs down in the future.
“We're maintaining our system and making investments that are actually going to be helpful to customers,” she said.
For Eversource customers, transmission and delivery costs hit record highs this August.
Hinkle, of Eversource, said that customer rates do not cover all of the company’s maintenance and operating costs, so equity investments allow the company to operate without taking on debt.
“We're able to reinvest a portion of those earnings directly into the system so we don't have to borrow more tomorrow,” he said.
Gov. Kelly Ayotte has repeatedly said she’s trying to lower energy costs in the state. In July, she called for a return of $1.5 billion to ratepayers across New England, following the FERC decision that utilities had been overcharging customers, and in May, she signed a joint letter with other New England governors urging FERC to reject a profit increase for transmission utilities.
