Last week, two retail energy suppliers defaulted with ISO New England, the administrator of the New England electricity grid and market, which meant that the customers of those suppliers had to be returned to the utility's "default" electric service.
It's a prospect SaveOnEnergy warned customers about just a few weeks ago, and it's a risk that will continue to hang over the New England electric market for the rest of this winter. When customers are dropped back to the utility's default service for their power supply, customers lose the savings they had expected to get by shopping for an alternative electric supplier, and customers may end up paying a higher rate.
Specifically, the retail electric suppliers People's Power & Gas, and Easy Energy of Massachusetts, experienced a default at ISO New England, and as a result they were no longer able to participate in the ISO market or serve their customers, and their customers were transferred to the local utility for power supply. People's Power & Gas has since cured its default but its customers were still returned to the utility.
About 6,000 electric customers in New Hampshire, at Public Service of New Hampshire, Unitil, and New Hampshire Electric Cooperative, were returned to the utility for default electricity supply. About 1,500 Connecticut customers at Connecticut Light & Power and United Illuminating were also dropped to default service as a result of the defaults, as well as an indeterminate number of customers in Massachusetts.
Commenting on the defaults, Public Service Company of New Hampshire said that, "The suspension of these suppliers comes on the heels of a period of extreme volatility in the region's energy market, which is heavily dependent on natural gas. A fixed and limited supply of natural gas, during a period of heavy seasonal demand, has resulted in recent spikes in the price of electricity. Energy suppliers ... may find themselves in a challenging financial situation."
The New England electric market has now seen three retail electric suppliers default in the past 11 months. And the conditions leading to the defaults -- constrained natural gas pipelines which push the price of generating power to $1,000/MWh -- aren't going to be relieved anytime soon, meaning as long as New England is battling frigid temperatures, retail suppliers will be strained financially.
That's why, as SaveOnEnergy noted a few weeks ago, it's vital that when you choose an electricity supplier, you rely on a market expert that can weed out financially unstable companies, so that you only enroll with a proven electric supplier with the resources and competence to weather the volatile New England market.