New England Utilities Hit by Year-end Power Outages and Set More Rate Hikes for 2023 

Last summer, New Hampshire ratepayers saw their electric bills soar by 40% – 60%.  Now it’s Vermont’s turn.  

Four municipal utilities in Vermont are raising their rates between 8% and 14% this winter – and all for the same reason.  They say they need to recover the rising cost of purchasing wholesale power from natural gas-fired power plants in New England.  These plants, which feed more than 50% of our region’s grid, are paying much higher prices for liquefied natural gas following Russia’s invasion of Ukraine.  With Europe now competing for every shipload of fuel – and climate change putting added strain on our fragile grid — New England’s electricity rates aren’t expected to abate anytime soon.

Vermont UtilityPercentage Rate increase
Morrisville Water & Light11.25%; effective Feb. 2023
Stowe Electric11.5%; effective Feb. 2023
Vermont Electric Co-op8.2%; effective Jan. 2023
Washington Electric14.2%; effective Nov. 2022
Green Mountain PowerTBD; scheduled for October 2023

Now It’s Vermont’s Turn to Pay the Natural Gas Bill

  • Morrisville Water & Light’s 11.25% increase in February will be its first hike in rates in a dozen years.  There is no escaping the emerging global shortage of natural gas, according to general manager Scott Johnstone.  “The cost to buy power is skyrocketing for everybody,” he told the Vermont News & Citizen
  • The Stowe Electric Department also has an 11.5% rate increase on tap for February.  This is its second rate hike in less than a year, raising the combined increase to more than 24%.  “The main driver of rate increases that we’re seeing today… is really due to the Russian war in Ukraine,” echoed Stowe Electric’s Jackie Pratt.  “In New England, even though we have a strong renewable energy market, rates and costs are primarily driven by natural gas,” she explained.
  • It’s the same story for the Vermont Electric Co-op, which hiked its rates by 8.2% this month.  The Johnson-based co-op’s announcement also puts the blame on significant upward pressure on the cost of wholesale power, driven by a worldwide shortage of natural gas.
  • The Washington Electric Co-operative, which already posts some of the highest rates in Vermont, put a 14.2% rate increase into effect last November.  Its operating costs are rising in part because of an interruption in landfill gas generation at a facility in Coventry, which normally provides 70% of its power generation.  This has left it more exposed to the wholesale power market led by natural gas.  Washington Electric is also the most rural of Vermont’s electric cooperatives, with only about nine members per mile.  Its challenging terrain adds to the cost of maintaining its transmission lines.
  • Green Mountain Power, the state’s sole investor-owned utility, won’t announce its next rate increase until October.  As with the municipal rate increases, all proposed changes are subject to final regulatory approval from the Vermont Public Utility Commission.

Electricity Rates in New England Top the Nation

Utility dependence on natural gas has left no state in New England unscathed.  In Maine,  Central Maine Power just raised its rates by 49% on Jan. 1 for home and small business customers.  In Massachusetts, National Grid’s residential customers will see their average monthly electric bill rise by 64% this winter.  And elsewhere in southern New England, Eversource electricity customers are bracing for rate increases between 19% and 30%.

Put it all together and New England now has the highest retail electricity rates in the nation.  Only Hawaii has higher electric rates than New Hampshire.  Electric rates in Massachusetts and Connecticut are almost as high as in California (the third-most expensive state, after New Hampshire).  In fact, all six New England states ranked in the top 10 states for highest electricity rates in 2022, even before the latest round of rate increases goes into effect this year.

New England State2022 avg. electricity rate2022 avg. rate increaseNational ranking
New Hampshire$0.2747/kWh40.2%49
Rhode Island$0.2149/kWh5.6%44

Source:  Choose Energy:  Electricity rates by state

Pre-Christmas Storms Wallop Our Area

Adding insult to injury for New England ratepayers, wide swaths of our region were hit by heavy snow and record-setting winds that knocked out power for hundreds of thousands of utility customers just before the Christmas holiday.  Green Mountain Power said the damage from these back-to-back storms was some of the most intense in the company’s history.  The Upper Valley of Vermont and New Hampshire was especially hard hit with up to two feet of wet, heavy snow that fell on the weekend of Dec. 17, leaving 5,500 Green Mountain Power customers still without of power as of Dec. 20.  

Then, on Dec. 23, swirling, powerful winds knocked out electricity to more than 75,000 houses and businesses across Vermont and resulted in the death of at least one person.  A 71-mile-per-hour wind gust clocked in Burlington rivaled the highest local wind speed ever recorded during Hurricane Hazel in 1954.  Atop Mount Mansfield, Vermont’s highest peak, wind gusts reached 130 miles per hour.  Across Vermont, more than 11,000 electricity customers were still without power on Christmas Day.

The storm’s impact was similar in New Hampshire.  More than 80,000 customers lost power as the windstorm hit on Friday night.  As of Christmas morning, some 36 hours later, 17,000 New Hampshire customers were still without power: 9,800 from Eversource, 6,300 from New Hampshire Electric Co-op, and 1,100 from Unitil.

More Grid Costs to Worry About

A preliminary estimate by Vermont Emergency Management put the storm damage to Vermont towns and municipal and nonprofit utilities at more than $2 million.  This tally is likely to rise as state officials better assess the impact of the storm and seek reimbursement from the federal government.

Look familiar?  Downed trees and power lines knocked out service to more than 150,000 utility customers in Vermont and New Hampshire on Dec. 23.

The state’s preliminary tally “is the beginning of an effort to ensure that ratepayers and residents of Vermont do not have to bear the brunt of the cost of this disaster,” Erica Bornemann, director of Vermont Emergency Management, pointed out in a press release.  

For example, Washington Electric had 37 power poles snapped by the storm and figures it has already spent $1.3 million on repairs, compared to its $300,000 annual budget for emergency storm management.  Of particular concern, dozens of transformers will need to be replaced at a price tag triple what they cost three years ago.  

By comparison, Green Mountain Power has a $6 million annual budget to handle emergency storm situations, but it cautions that it is also facing higher costs from more frequent and severe storms due to climate change.

Solaflect Energy is your home energy management partner.  We help you install clean and affordable solar electricity for a more resilient and climate-friendly future.  For more information email us, or call (802) 649-3700.

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