The False Promise of Falling Prices

Public Service NH, headquartered in Manchester, recently sent a newslleter, warning NH customers of mistaking lowered prices with supply.

Here's what they said: It's easy to be fooled by recent headlines about falling energy prices, but make no mistake–New England's energy challenges are very real. The region's electricity prices, which are the highest in the nation, continue to be at the mercy of volatile commodities driven by supply and demand.

Luck appears to be on New England's side this winter. Milder temperatures have lowered demand for power compared to last year. On the days that we have dipped below zero, there was an adequate supply of fuel for power plants thanks, in part, to ISO - New England's Winter Reliability Program. Current wholesale prices even mean some customers in Maine are catching a break with their seasonal rates. 

The energy markets are also reacting to this winter's dramatic change in oil prices. Cheap oil keeps natural gas prices low by providing a more affordable alternative fuel during times of high demand. It also brings down the cost of importing LNG, which has figured more prominently in to New England's fuel supply this winter.

In the short term, lower oil prices may seem like good news. But looking long term, relying too heavily on a commodity like oil or natural gas can be risky to consumers who are paying for last year's high demand and short supply. New Englanders will continue to pay extremely high energy rates until the region diversifies sources of power and ensures adequate supplies of fuel at all times of the year.