top of page

The Era of Cheap American Gas is Over

In the past two weeks, New Hampshire residents learned that most of our electricity

bills will skyrocket in August. For Eversource’s residential customers, the rate they

pay kilowatt-hour will rise from 19 cents to more than 32 cents: 22 cents for the

energy, and another 8 cents to deliver it. With this rate, New Hampshire customers

will nearly have the highest electricity rates in the United States: higher than

Alaska, where most customers pay about 22 cents, and lower only than Hawaii.


Needless to say, if your state is paying nearly as much for energy than a string of

isolated atolls thousands of miles from shore, something has to change.


We are now reaping what we have sowed. Over the past 20 years, we have

massively built out natural gas fired power plants in New England, from 15 percent

of generation in 2000 to 53 percent in 2021. Natural gas prices set our electricity

prices, and pipeline gas in New England is currently two to three times more

expensive than the same time last year.


This problem is not going away anytime soon. While it seems to us that prices have

gone through the stratosphere, gas is currently fetching ten times more in Europe.

American producers are responding to this powerful price signal to send their

product overseas. And with the European Union’s newfound resolve to wean

themselves off Russian gas, even more American gas will not be burned at home.


If you’re hoping that American production will rise again, don’t be so sure. From

2010 to 2018, the low price of gas in the US meant that the American fracking

industry lost a cumulative $181 billion dollars, which led the former CEO of the

nation’s largest gas producer to call the shale revolution “an unmitigated disaster

for investors. According to a survey done by the Federal Reserve Bank of Dallas, 60

percent of shale executives said they weren’t increasing drilling activity because


Finally, anyone suggesting that the solution to expensive natural gas is more

pipelines to bring in more natural gas has a bridge to sell. Unlike the gas price

spikes we experienced in the winters of 2012 through 2018, this latest increase is

more about fuel prices and less about pipeline capacity. In part thanks to warm

temperatures, on only a few days this winter did our pipelines approach capacity.

Moreover, other states have implemented policies that seek to reduce gas demand

and the few peak winter days where capacity is a problem, policies that save New

Hampshire residents money.


In other words, it’s not the infrastructure. The era of cheap American gas is simply

over.


There are solutions, but—like our two-decade gas-building binge—they will take

time. As such, perhaps it's no surprise that politicians from both parties are looking

for policy solutions that can be implemented before the next election, like gas-tax

holidays or one-time electric bill credits.


But the truth is, as Robert Frost wrote, I can see no way out but through. We need

to build ourselves out of this crisis.



We at Clean Energy New Hampshire have a whole package of technologies we

believe will lower the amount of money consumers spend on energy every year:

solar on every roof, insulation in every attic, a smart meter and smart appliances

connected to the grid, heat pumps outside, and an electric car in every garage. This

is the life our family is living, and I’m happy to show anyone who asks the

spreadsheet of our energy costs. In this price environment these investments pay

back even faster, which means this is where the markets will take us eventually.

However, if we want to get there faster there is a suite of policies that help families

choose each of these technologies, if we have the courage to adopt them.


But since we’re laser focused energy rates right now, let’s talk about how to use

clean energy to lower them.


In Maine last year, following a competitive bidding process, utilities awarded long-

term contracts to six large-scale renewable energy projects. Those projects will

deliver energy to residents of the Pine Tree state for between 3 and 4 cents per

kilowatt hour. Compare that to the 22 cents that Eversource and Liberty got when

they went to the gas-dominated market in these past two weeks.


New Hampshire lawmakers could authorize our utilities to issue a similar request for

proposals in the next legislative session, or sooner if they have the courage.


Procurement for long-term contracts with renewable energy providers is

increasingly the norm. In Texas—in the wake of the blackouts caused by the

freezing up of their natural gas system, and this year’s heat wave in which

hundreds of megawatts of renewable energy contracts. Competitive solicitations are

not a subsidy, they are simply a different financing arrangement that recognizes

that renewable energy projects have free fuel and high capital costs and require

different market structures than fossil fueled power plants.


The truth is that nearly no-one believes natural gas is our future. Governor Sununu

acknowledged in his press conference on Wednesday, stating that we are in the

midst of a transition to renewable energy. A glance at the queue of power

generation projects proposed in New England tells the story. In 2017, 48 percent of

the proposed capacity was gas, and in 2022 only 3 percent was. Meanwhile, wind,

solar, and battery storage represent 95 percent of what’s proposed.


The only question is whether the lower energy rates that result from those projects

will flow to other New England states or if we’ll really do something to help New

Hampshire ratepayers.

318 views2 comments

Recent Posts

See All

2 Comments


Thank you for finally making a relatively strong position statement in this regard. We all need to follow your lead by continuing to "drill" this point home. Plus we need to reinforce the importance of fielding a NH legislature body that has the so called "courage" to move swiftly and with focus on transitioning the NH economy to a clean, renewable energy future.

Like
Zeke Schmois
Zeke Schmois
Sep 22, 2022
Replying to

I agree, we need to put more focus on renewable energy initiatives (or energy in general). We'll need to convince the people first though. Many people are still skeptical of electric cars/tools/heating, even with a plethora of data to prove their worth. At my local town level I've been networking with neighbors and over time showing them all my electric tools/toys and explaining the benefits. My hope is more towns will do this and eventually it'll be a no brainer because who wouldn't want a log splitter that makes no noise and needs nothing but an extension cord to run?

Like
bottom of page