Why Are Utility Rates Increasing on August 1, 2026?
Understanding New Hampshire's Biggest Utility Supply Change in Years
If you've been following Neighborhood Energy's monthly market updates, you've likely noticed a recurring theme over the past year: New Hampshire's utility supply market is changing. Beginning August 1, 2026, those changes become visible on customers' utility bills as default electricity supply rates increase across the state's three investor-owned utilities.
While rising wholesale electricity costs certainly play a role, the August increases are about much more than seasonal demand. They reflect a significant change in how utilities purchase electricity, combined with the financial consequences of that transition. Understanding these changes helps explain why many businesses are evaluating competitive third-party supply for greater price stability.
From Fixed Purchases to Market Exposure
For many years, New Hampshire's electric utilities purchased nearly all default service electricity through competitive fixed-price solicitations months before customers used the power. Suppliers assumed the market risk, allowing customers to receive relatively stable default rates.
To reduce supplier risk premiums and encourage more competitive bidding, the New Hampshire Public Utilities Commission approved a new procurement methodology. Approximately half of default service is now procured through traditional fixed-price contracts while the remaining portion is exposed to ISO New England wholesale market pricing using a proxy-price methodology.
What Is Proxy Pricing?
A proxy price is an estimated wholesale market price used when setting customer rates. Because actual market prices are unknown at the time rates are established, utilities reconcile any difference between estimated and actual costs later. While this approach can benefit customers during periods of declining wholesale prices, it also increases exposure when markets move unexpectedly.
Why August 1 Rates Are Increasing
The August 1 increases are the result of three major factors occurring at the same time:
First, the new procurement methodology exposed a larger portion of default service to wholesale market volatility rather than locking in prices months in advance.
Second, wholesale electricity prices remained elevated through a colder-than-average winter, while geopolitical tensions in the Middle East temporarily increased global LNG prices. Because New England relies on imported LNG during periods of peak winter demand, these events added upward pressure to regional electricity prices.
Third, actual wholesale prices exceeded the proxy prices used to establish customer rates. Utilities therefore under-collected millions of dollars in supply costs that regulators now require them to recover through future default service rates.
Eversource (NH)
$0.11303/kWh → $0.14009/kWh (+23.9%)
Unitil (G2/OL)
$0.11253/kWh → $0.13171/kWh (+17.0%)
Liberty Utilities (NH)
$0.13735/kWh → $0.15835/kWh (+15.3%)
Why This Matters for Businesses
The procurement changes were intended to create a more efficient default service market over the long term. However, the transition has also introduced greater uncertainty because a portion of utility supply is now tied more closely to wholesale market conditions.
Unlike a fixed third-party supply agreement, utility default service is now more susceptible to wholesale market fluctuations, reconciliation adjustments, and future regulatory decisions. For commercial customers, this makes budgeting energy expenses more challenging.
Neighborhood Energy continuously monitors wholesale markets, utility filings, ISO New England developments, weather forecasts, regulatory proceedings, and supplier pricing to identify opportunities to secure competitive pricing before market volatility reaches customer bills.
Looking Ahead
The August 1 rate increases demonstrate that utility default service is no longer simply a passive option. As New Hampshire's procurement methodology continues to evolve, businesses that proactively evaluate competitive supply options may be better positioned to manage both price volatility and budget certainty.
If your organization is still on utility default service or would like to review its current energy strategy, Neighborhood Energy is here to help explore options that provide greater budget certainty and long-term value.