As electricity bills go up for many Mainers, there’s good news as well: The price for the supply of that power is going down, although not enough to actually reduce overall bills.
Customers paying “standard offer” supply rates will still see their bills rise, just not as much.
The Maine Public Utilities Commission on Friday approved a reduction in the standard offer supply rates paid by residential, small- and medium-sized customers of Central Maine Power and Versant Power’s Bangor Hydro District.
The reduction of 1 cent per kilowatt-hour will result in a monthly savings of about $5.50 for an average residential customer of either utility that uses 550 kWh of electricity per month. The rate cut goes into effect on July 15.
The reduction applies only to customers receiving the standard offer supply rate – the default option for customers who have not chosen a specific supplier to generate their electricity. Central Maine Power and Versant Power transmit and distribute electricity; they do not generate it.
Standard offer supply rates were set in November through a competitive bid process conducted by the PUC, as required by Maine law. At the time, the rates reflected volatile supply costs related to wildly varying fuel costs, according to the commission, which said it anticipated adjusting the rates after about six months of the standard offer’s term.
After reviewing the actual costs, the PUC ordered a downward adjustment of the standard offer rates Friday. But the reduction will come two weeks after a separate price hike for Central Maine Power and Versant Power customers.
“This news comes at a great time as customers are seeing an increase in other components of their electric bill. This decrease will offset a portion of those increases,” PUC Chair Philip Bartlett said in a written statement.
Starting Saturday, Central Maine Power customers are due for an increase in their electric bills of more than $10 a month – a culmination of increases tied to renewable energy policies, a settled rate case, and annual adjustments for storm restoration and other expenses.
The PUC had approved an increase to recover so-called stranded costs, such as above-market costs for residential and community solar power under the state’s net-energy billing program. That approval alone adds a monthly charge of $5.95 to what a typical CMP residential customer pays, based on a home that uses 550 kWh of electricity a month.
Together with other increases, the total came to roughly $10.26 a month, or $123 a year.
Residential customers of Versant Power in its Bangor Hydro District were expecting a combined average rate hike of $17.59 a month, or $211 a year, while customers in Versant’s Maine Public District will pay an additional $12.53 a month, or $150 a year.
These increases come after the PUC on June 6 approved a negotiated hike for CMP’s electricity distribution rates, which will increase a typical home’s total electric bill by just over 1%, or $1.67, in July, and go up to roughly $5 a month by the middle of 2025.
In May, the PUC approved a similar settlement with Versant under which customers will see their total electricity bills rise by roughly 4% – an average of $5.25 a month – starting July 1.
‘WELCOME NEWS’
William Harwood, the Maine public advocate, said that while the decrease announced Friday won’t fully offset the expected increase set to take effect Saturday, it will help stabilize the overall “amount due” on ratepayer invoices for the next six months.
“This is, indeed, welcome news to ratepayers who have been burdened with high (standard offer) prices. The rise in standard offer pricing over the past two years has been crippling for many Maine ratepayers,” he said.
Dan Burgess, director of the Governor’s Energy Office, also said the rate reduction was good news.
“For the last two years, Maine households and businesses paid the price as the costs of natural gas to produce our electricity hit historic highs,” he said in a statement.
“As recently affirmed by ISO-New England, the operators of the regional electricity grid, our region’s investments in clean energy and energy efficiency are now helping ensure a reliable electricity supply that further reduces our reliance on expensive fossil fuels like natural gas. Continuing on this path to diversify our energy supply is critical to controlling costs in the future and achieving a cleaner energy future for Maine people.”
Judy Long, communications and brand manager for Versant Power, said Friday’s announcement was a surprise to the utility company.
“We were certainly very hopeful and optimistic that prices would be going down,” she said, but officials anticipated seeing that decrease in November when the PUC selects bids for the new standard offer.
Long said this is the first time in her seven years with the company that the rates have been changed mid-year.
“We were not knowledgeable about that, but it certainly is welcome for our customers,” she said.
It will likely take about two months before the full effect is felt because of the two weeks between the rate changes and varying billing cycles.
A CMP spokesperson said the company was pleased with Friday’s update from the PUC.
“The high cost of electric supply has been the primary cause of high electricity bills in Maine in 2023. Any action to lower supply costs is welcomed news for our customers,” Jonathan Breed said in a statement.
Even though CMP and Versant have no direct control over the standard offer rate, it remains to be seen whether a late-in-the-game rate change could soften the public perception of the utility companies and whether that could translate to any meaningful change at the polls in November, when voters will decide on a first-of-its-kind plan to create a state-level public power company through a hostile takeover.
Supporters want to buy out the assets of Central Maine Power and Versant Power – which distribute 97% of the state’s electricity – and replace them with Pine Tree Power, a new not-for-profit distribution utility.
Long said most people don’t understand that less than half their total electric bill is determined by the utility companies. They just see the total on their Versant Power bill and assume that all the money goes to Versant.
As for the ballot initiative, Long said she is a firm believer that people who pay attention to the plan “will realize that this is a series of promises and a lot of risk for people.”
CMP distributes electricity to about 650,000 customers in southern and central Maine, while Versant serves 165,000 customers in northern and eastern areas of the state.
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