For Now, PSNH’s Bow Plant Saves Ratepayers Millions
by Charlie Arlinghaus
April 2, 2014
When it costs more to heat your house, your electricity is cheaper. Actually there isn’t a direct correlation between the two but cold weather – and we’ve had plenty of it – drives both dynamics. One utility-owned power plant in New Hampshire is something of a political football but is currently saving ratepayers well over $100 million this year.
The electric market in New England is all about gas. The electric market is not state specific but regional and our region comprises the six New England states. Whether a power plant is in New Hampshire or Rhode Island is immaterial. Power is sold into a regional market which doesn’t care which state the plant is in.
The lion’s share of electricity in New England comes from natural gas so gas is said to set the price. Every resource bids into the market a price at which they are willing to supply a set amount of power. The sources are then “stacked” from least to highest bid until the power need is reached. All accepted providers then get that “clearing price” regardless of what their individual bids were. Gas generally sets the price as the last accepted bid.