EagleTribune.com, North Andover, MA

October 26, 2012

Hampstead changes energy wholesaler

By Dustin Luca dluca@eagletribune.com
The Eagle-Tribune

---- — HAMPSTEAD — The town will now buy electricity from a wholesaler in Manchester, at least until an expected boom in energy prices knocks costs off the rails next year.

The price of energy has seen its ups and downs over the past 12 months. The town is currently paying 7.949 cents per kilowatt hour of electricity to White Columns Office Solutions, an energy wholesaler in Hampstead.

As energy prices dropped since November — down to the current 7.11-cent default rate charged by Public Service of New Hampshire — the town has started losing money, according to Sally Theriault, administrative assistant.

Responding to the loss, the Board of Selectmen voted Monday to enter into a monthly contract with Freedom Energy Logistics of Manchester, starting in November, when the White Columns contract ends.

Town officials are unsure what the first month’s energy bill will look like. Instead of a quote for the first month, Freedom provided the town with historical data showing what the town would have saved if it had gone with Freedom last year, Theriault said.

The closest estimate to an energy cost is the company’s August electricity rate, which matched PSNH’s rate of 7.11 cents.

The town would have saved $3,962, compared to the $895 the town has saved with White Columns from November to August. In September, the savings through July was reported to be $907, showing the town lost $12 over the course of a month.

Entering into a contract with Freedom wasn’t an option last year, Theriault said.

Losing money is one of the risks of buying energy wholesale through long-term contracts, according to Martin Murray, senior corporate news representative with PSNH.

“The interesting thing we found during the year is that residential customers were locked into a specific price for that entire agreement period,” Murray said. “Because rates went down, they ended up over the course of the year paying more.”

This past year, the mild winter led to a lower-than-expected use of electricity just as natural gas production jumped. The result, White Columns owner Tad Dziemian said, was a complete flattening of natural gas prices: $1.90 per decatherm in April, as opposed to around $3.48 today.

“The variable rate follows the natural gas market,” Dziemian said Monday. “If it spikes up to $5, which is the anticipation for the first quarter of 2013, your rates are going to reach up to 10, 12, 15 cents a kilowatt hour.”

The better option would be to lock the rate now while costs are low, Dziemian said. As a Hampstead resident, he said he preferred a better use of tax dollars by having the town stay with his company.

“As a taxpayer for the town, and having known this information, I would look at the Board of Selectmen to take a more conservative approach with my tax dollars,” he said.

Theriault said the town could leave Freedom once prices got too high, the alternative being paying PSNH’s default rate.

That rate is expected to reach about 8.97 cents per kilowatt hour in January, she said. Murray said the company would request a change in December, based on then-current energy prices. The rate won’t be certain until then.

The selectmen voted, 2-1, in support of entering into the monthly contracts, with Selectman Priscilla Lindquist opposing the plan.

Saying her reasons for voting against Freedom Energy Logistics stem from being “conservative” on spending issues, Lindquist said, “If we don’t have any idea what the costs are going to do, I’d like to be a little bit more safe.”