New Hampshire Muni Minute | July 2023

Summer has arrived, and with it comes the 2023 Peak Demand Season! As Vice President of Procurement at Freedom Energy Logistics, I’m excited to share how our Peak Demand – Capacity Tag Management Program has been saving municipalities and organizations thousands of dollars for over a decade. Our free notification program empowers municipalities with valuable information to help you make informed decisions about curtailment this summer, aiming to lower your capacity tag and achieve cost savings.

Overview of the Annual System Peak: The Annual System Peak typically occurs between June, July, or August, and any curtailment during this time will determine your Capacity Tag effective from June 2024 to May 2025. Our team will update you with real-time notifications regarding peak demand days enabling you to implement energy-saving strategies and reduce expenses. To sign up for the Freedom Energy Peak Notification Program, click here.

Establishing Capacity Cost: The Capacity Cost (Clearing Price in $/kW-month) is set during the Forward Capacity Auctions held three years before the Capacity Period. Additionally, the Reserve Margin, another component, is determined after the Annual System Peak occurs and depends on the Peak’s magnitude and the level of generation participating in the Auction.

Estimated Cost Savings from Curtailment this Summer: To estimate the Effective Capacity Cost that will be established this summer for the 2024-2025 Capacity Period, we are utilizing an average Reserve Margin of 1.4, based on data from the past few years. Please find below a table with the estimated Effective Capacity Price, including the Reserve Margin and the projected cost savings per 100 kW of reduction in your Capacity Tag achieved through curtailment this summer.

Understanding the Annual System Peak: The Annual System Peak represents the highest electricity demand for New England in a single hour throughout the calendar year. The ISO-NE must ensure sufficient generation to meet this peak demand, which usually occurs during a hot and humid day in June, July, or August, as New England experiences summer peaking due to cooling, air conditioning, and dehumidification.

Click here to learn more about the Annual System Peak and its impact.

At Freedom Energy, we’re committed to helping you navigate the complexities of energy procurement and achieve significant cost savings.

Choosing the opportune moment to implement an energy supply agreement can be overwhelming. Opting to procure multiple years’ worth of energy on a single day involves a calculated risk, prompting many energy buyers to seek the counsel of experts to navigate their procurement process. Upon analyzing the trends of recent years, certain patterns emerge, suggesting that the present moment could be the optimal time to make a purchase.

Before making a decision, there are important factors to consider:

Review your current agreement’s expiration date: The end date of your existing agreement will significantly influence when you should start exploring your next options. At Freedom Energy, we guide clients on how and when to make purchases, empowering them to be well-informed buyers.

Consider your future plans: Sometimes, it may be prudent to delay purchasing your next contract or secure only a portion of your load or price. Ask yourself these questions when determining the right timing for your next contract:

• How long will your business be in its current location?
• Are there any significant changes in energy usage expected over the next few years?
• Do you have any green initiatives in place that could offset energy usage?
• Are there any plans for onsite generation that may shift the load from one commodity to another?

Now, the big question: Is it the right time to buy? Energy buyers often ask us this question daily. If you have already considered the previous questions and identified an opportunity, here are some data points to further support why now might be the ideal time:

The chart above tracks the future cost of energy (CY24, CY25, CY26) in ISO-NE from January 2020 to the present.

Historically, prices showed consistent increases from June to December of 2021 and 2022. If 2023 follows this trend, waiting may not provide any significant market movement for energy buyers.

Considering the favorable trading of gas prices following a mild winter, potential increases in summer demand and speculation about next winter’s temperatures could negatively impact forward curves. If committing to 100% energy fixing seems unappealing, it might be worth exploring hedging at least 50% under these market conditions. Your Energy Advisor at Freedom can assist in modeling different scenarios and set realistic expectations for potential costs should you decide to wait.

As a municipal energy user in New Hampshire, you may be eligible to earn revenue by supporting local renewable energy. As you are probably aware as far back as 2021, HB 315 increased renewable energy generation in New Hampshire, with further enhancements since then. Cities, towns, and schools can take advantage of the output of local renewable energy generators.

Here’s why you should consider participating:

• Earn Revenue for your participation.
• Continue to use electricity as you do today with no onsite equipment.
• Your supply agreement remains the same.
• You directly support local renewable energy generators, empowering them to enhance their production and contribute to a greener future.
• As the group administrator, Freedom Energy simplifies the process and handles all compliance and payment matters.

To see if you qualify for this program, contact Kristin Warriner, Business Development Manager, at kwarriner@felpower.com.