Unitil: Global Competition For Natural Gas Will Drive Rates Up This Winter

CONCORD, NH — Natural gas pipeline constraints and the reduction of coal and oil to power electric plants will lead to rising energy prices for customers this winter, according to one of New Hampshire’s largest energy suppliers.

Alec O’Meara, Unitil’s media relations manager, said New England companies must compete for access in the global marketplace for natural gas shipments. There are normal challenges during the winter months. But as the need for natural gas increases, there is a bottleneck because output increases based on customers needing to heat their homes. Power generators Unitil uses to tap electricity also cut usage of fossil fuels during the past two decades to “move away from more emissions-based fuels to a mix of cleaner and more renewable energy sources,” O’Meara said.

At the same time, the lack of existing pipeline infrastructure limits capacity.

“All New England states are a collective group when it comes to energy procurement and supply, and supply is really the key thing that is driving this increase,” he said. “We’ve been phasing out coal. We’ve been phasing out oil, and we’ve been using more and more natural gas to a point where natural gas is something like 50 to 53 percent of our total fuel mix.”

The region relies on ships to bring natural gas from overseas to the region. O’Meara said on peak days during the winter, as much as 35 percent of New England’s natural gas is imported from those ships. The energy crisis in Europe, he said, due to Russia’s invasion of Ukraine has also led to higher prices. Domestic production is also down from its previous heights in 2019 and 2020.

The company goes out into the marketplace every six months to purchase electricity since it does not generate its own power. While supply rates on electric bills show “volatility,” distribution rates, however, remain “fairly stable,” O’Meara said.

Unitil has mitigated part of the rate increase for the winter season by requesting supply rates for an eight-month period instead of the normal six months — meaning the winter rate will be effective from December to July if approved by regulators.

The company is also working to promote energy efficiency programs, assistance opportunities, and third-party energy suppliers. Third-party suppliers, he said, allow customers to effectively serve as their own broker by finding an energy supplier with a supply rate that would be included in their regular Unitil bill. Although customers need to understand third-party supplier contracts, what they offer, and what happens when they expire.

“We try to serve as an adviser to our customers,” O’Meara said. “We recognize that this is a really unique time in the energy industry.”

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