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POWER POINTS // Savings in New Hampshire pilot may be the spoils of the early bird

Published Jul. 6, 2006

As the first statewide experiment in retail electricity competition in the United States, New Hampshire offers a glimpse of the future. Last year, 17,000 of the state's residential, commercial and industrial accounts were given the opportunity to select their power supply from any of 31 utilities.

Why New Hampshire? One utility - Public Service Co. of New Hampshire - had served 80 percent of the state charging about 15.5 cents per kilowatt hour, one of the highest electric rates nationwide. (Tampa Bay residents pay between 8 and 9 cents per kilowatt hour). New Hampshire was hungry for a price break.

In the pilot, utilities from far and wide flooded the mailboxes of New Hampshire residents with marketing offers from bird feeders to low-flow shower heads - and cheaper rates. Three utilities even promised "green power" or electricity from clean sources of generation.

At first glance, the New Hampshire pilot is reducing the electric bills of participants by an average of 15 percent. But much of the savings comes from a rebate from the state's utilities and lower than usual prices from participating utilities that are eager to sample competition.

The town of Peterborough pooled its clout and let its elected town official choose one utility for all. Houston-based Enron Corp. jumped in, offering $25,000 to revitalize the downtown, as well as cheaper electric rates. After winning Peterborough's endorsement, Enron began a national ad campaign about the town's choice and aired it during this year's Super Bowl beamed to nearly 130-million viewers.

Analyst Lynn Fryer, who tracks the New Hampshire test for the research firm E Source in Boulder, Colo., says the pilot is important but advises: buyer beware.

"Most power suppliers are not making a profit and are justifying their involvement as a way to gain experience," she says.

Nor is the local utility happy . Public Service Co.'s parent, Northeast Utilities, is suing to block further industry restructuring. The power company argues it could face bankruptcy if New Hampshire adopts deregulation.