Vermont’s Electricity Prices:
Envy of the Region
June 2008
Published by:
Vermont Electric Price Facts June 2008 With record high oil and gasoline prices commanding regular headlines these days, and fresh revelations daily
about their negative impact on the global economy, there is intense interest in energy prices in this election year.
In Vermont, it is generally understood that we have enjoyed low prices for electric power over the years, but
beyond the veneer of commonly held perceptions, more should be known about what Vermonters pay for power
and why, especially related to what the rest of New Englanders are paying. To assist with this analysis, the
Vermont Energy Partnership has compiled the following fact sheet to highlight key electricity statistics from the
Department of Public Service’s “Utility Facts” report.
As you will see, Vermont has been relatively insulated from the extreme price spikes that have plagued the region
due to the mix of power sources in our portfolio of electric power generation. The dominance of natural gas in
New England’s electric mix has been a major catalyst for the higher prices that most consumers have endured.
Natural gas supplies approximately 40
percent of the region’s power, a fuel
source that suffers from tremendously
high price volatility. Yet in Vermont
natural gas as a fuel source is used to meet
less than one percent of Vermont’s
electricity demands, thus establishing one,
among a number of reasons, for the lowpriced electricity marketplace in
Vermont.
Vermont currently enjoys long-term,
fixed price contracts with Hydro-Québec
and the Vermont Yankee Nuclear Power
Station, which combined meet two-thirds
of the state’s electricity needs.
The contract with Vermont Yankee is especially advantageous due to the current power purchase agreement.
Vermont Yankee sells power to Vermont utilities at 4.1 cents per kilowatt hour, approximately half the national
average.
It is in part because of this contract that Vermonters have the lowest electric rates in the region, approximately 21
percent lower than New England.
Vermont faces difficult decisions in the near-term as contracts with Vermont Yankee and Hydro-Québec begin to
expire in 2012. The role these two sources may play in a future electric portfolio remains to be seen, and whether
Vermonters will continue to enjoy the lowest electric rates in the region has yet to be determined.
Graphs courtesy of Department of Public Service, “Utility Facts 2006,” August 2007 pp. 13 – 14.
Vermont Electric Price Facts June 2008
The following statistics illustrate the regional electricity pricing differences.
·
In Vermont the total average price of electricity for all sectors is 11.43 cents per kilowatt hour (kWh).
Compared to the region, prices in Vermont are:
o 21.3 percent lower than New England (14.52 cents per/kWh);
o 25.8 percent lower than Massachusetts (15.40 cents per/kWh); and
o 17.8 percent lower than New Hampshire (13.90 cents per/kWh).
·
Vermont’s residential customers pay the lowest rates in New England, with an average of 13.54
cents/kWh. Vermont’s residential electricity costs are:
o 16.6 percent lower than New England (16.22 cents/kWh);
o 20.4 percent lower than Massachusetts (17.01 cents/kWh); and
o 8.9 percent lower than New Hampshire (14.85 cents/kWh).
·
Vermont’s commercial customers pay the lowest rates in New England, with an average of 11.7
cents/kWh. Compared to the region commercial costs are:
o 19.76 percent lower than New England (14.58 cents/kWh);
o 26.05 percent lower than Massachusetts (15.82 cents/kWh); and
o 15.16 percent lower than New Hampshire (13.79 cents/kWh).
·
Vermont’s industrial customers pay the lowest rates in New England, with an average of 8.34
cents/kWh. Compared to the region industrial costs are:
o 24.6 percent lower than New England (11.06 cents/kWh);
o 26.72 percent lower than Massachusetts (11.38 cents/kWh); and
o 35.42 percent lower than New Hampshire (12.16 cents/kWh).
NOTE:
Commercial customers consist of service-providing facilities and equipment of: businesses; Federal, State, and local
governments; and other private and public organizations, such as religious, social, or fraternal groups1
Industrial customers consist of all facilities and equipment used for producing, processing, or assembling goods. The
industrial sector encompasses the following types of activity: manufacturing (NAICS codes 31-33); agriculture, forestry,
fishing and hunting (NAICS code 11); mining, including oil and gas extraction (NAICS code 21); and construction (NAICS
code 23).2
1
2
Energy Information Administration, Glossary, http://www.eia.doe.gov/glossary/index.html
Ibid.
Vermont Electric Price Facts June 2008 The full Department of Public Service’s “Utility Facts” report is updated periodically and can be accessed at:
http://publicservice.vermont.gov/pub/other/utilityfacts2006.pdf.
Graphs courtesy of Department of Public Service, “Utility Facts 2006,” August 2007 pp. 13 – 14.