Many New Hampshire businesses will be facing higher electricity rates this fall. Liberty Utilities, also known as Granite State Electric, increased its default service from 13.735¢/kWh to 15.835¢/kWh, a 15% increase. Eversource also increased rates by 24%, moving from 11.303¢/kWh to 14.009¢/kWh. And Unitil increased its default service from 11.253¢/kWh to 13.037¢/kWh, or 16 percent. All these increases went into effect on August 1st and will remain in place until January 2027 when new rates are set.
Energy costs are a major operating expense for many businesses. Rising electricity costs can affect everything from product pricing to hiring decisions to operating margins. New Hampshire’s deregulated electricity market gives businesses an option that many don’t know they have.
NH Businesses Have More Control Than They May Realize
The NH electricity market is deregulated, which means businesses can bypass their utility’s default rate and shop for a competitive electricity supplier. A utility offers a one-size-fits-all rate structure that resets every six months based on market conditions and prior-period reconciliations. With a competitive supplier, you can shop for a rate and contract type that matches your budget and risk tolerance.
Energy markets are unpredictable, but New Hampshire’s deregulated market gives your business an opportunity to take greater control over how you purchase energy. With competitive supply, you can get off the cycle of rate changes every six months and get a fixed rate for a much longer duration. Learn more about how the deregulated market works and whether your business is eligible to participate.
How the NH Electricity Rate Increases Are Affecting Businesses
The default service rate is the energy supply price your business pays when you have not chosen your own electricity supplier. Businesses on default service are immediately exposed to changes in these utility rates when they reset.
Here’s a simple example. Say you operate a restaurant served by Liberty Utilities and you use an average of 15,000 kWh of electricity each month. In July, your supply cost would have been $2,060.25. In August, at the new rate, that same usage costs $2,375.25, an increase of $315 per month for the exact same amount of power.
Businesses on a competitive supply contract will avoid these utility service rate increases.
Why New Hampshire Utilities Raised Rates
There are several reasons electricity default rates can change from one period to the next. Prior to each rate period, utilities issue requests for proposals and electricity suppliers respond with offers. The utility then selects a supplier based on criteria like price and financial stability. Additionally, in NH, utilities are required to buy half of their expected supply on the open market, which exposes them to price swings. There are benefits to the open market, where prices can be relatively low, but it also exposes utilities to price spikes. Winter Storm Fern is a recent example of how quickly open market prices can move upward.
The rate charged to customers is set to cover what the utility expects to pay for that supply, based on the contracted amount and their projected costs of buying on the open market. If actual conditions, like an unusually cold winter or sharp swings in energy prices, cause the utility to spend more or less than anticipated, the amount collected from customers may not match what the utility actually owes its suppliers.
When under-collection occurs, the utility typically adjusts rates in the next period to recover the difference. This was a significant factor in the current NH increases. Fluctuating market prices also played a role, as rising wholesale electricity costs pushed utilities to adjust their default rates to reflect current conditions.
Why Northeast Electricity Rates Keep Increasing
Rate volatility in New Hampshire doesn’t happen in isolation. Energy costs across the Northeast have been rising for several years, driven by a combination of limited delivery infrastructure, heavy regional reliance on natural gas as a fuel source for power generation, and periodic reconciliation events like the ones driving the current increases. Regional supply and demand dynamics can cause electricity costs to shift significantly from one six-month period to the next, making energy budgeting more challenging for businesses that are on default utility service.
Options for Your Business
Because New Hampshire has a deregulated energy market, businesses are not required to buy their electricity supply from the utility. If a competitive supplier offers a rate structure or contract type that better fits your business, you can make that switch.
Sprague works with commercial customers across New Hampshire to evaluate energy supply strategies and understand how market conditions may affect energy budgets. The goal is not to react to the utility rate change, but to understand your business needs and make purchasing decisions that align with them.
If you’d like to understand your options, we’re happy to take a look at your current situation and walk you through what competitive supply could look like for your business. Get a free quote here.
