What Affects Electricity Prices
Electric bills are comprised of two parts – the delivery of electricity to your home or business and the electricity you use each month. The rate for the electricity you use, sometimes called the energy supply portion of your bills, changes periodically and is influenced by a number of things.
New Hampshire and the other New England states are part of a regional electrical system called ISO-NE. ISO-NE monitors the demand for electricity in New England and makes sure there is enough supply to meet the demand.
In 2021, approximately 46% of the electricity supplied in New Hampshire and New England came from generation plants that used natural gas to produce electricity. Supplies of natural gas are located in other parts of the country, and the natural gas that we use here in New Hampshire and New England to produce electricity or to heat our homes travels here through pipelines. To make sure there is always enough natural gas for their customers to heat their homes, the natural gas utilities in New Hampshire and other New England states have contracts with the owners of the gas that guarantee delivery.
During extreme cold weather, the amount of natural gas needed for heating can sometimes take up most of the space, or capacity, in the pipeline. When that happens, the price of the remaining natural gas goes up. Those plants that use natural gas to produce electricity pay considerably more for natural gas causing the price of the electricity produced to go up. In turn, the wholesale price of electricity goes up, and the price we pay for electricity supply increases.
More information about real-time wholesale electricity prices and the regional electricity market is available from ISO-NE, the manager of the wholesale regional electric market.