C.N. Brown enters the electricity market

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PARIS — C.N. Brown is getting into the electricity game and hopes to bring plenty of existing customers with it.

Earlier this month the company, which provides heating oil and operates Big Apple food stores and gasoline service stations across Maine, announced it would begin offering electricity in areas currently served by Bangor Hydro Electric Company and Central Maine Power.

According to Jeff Jones, the president of C.N. Brown’s electricity division, the company has been purchasing electricity directly from suppliers for around eight years and was looking for ways to diversify its energy products.

The company tested the waters by offering electricity to its employees last year. Jones estimates 300 of their 900 employees picked up the service.

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Now, the company is looking to provide electricity to its 30,000 existing customers and is offering deals on other energy products to sweeten the deal.

Deregulation

In 2000, Maine restructured its electric utility market, divorcing energy production from delivery. The state’s two main companies, CMP and Bangor Hydro, were no longer allowed to both supply and deliver power.

Deregulation, Jones explains, allowed other companies, known as “competitive electricity providers” to sell power through lines owned by CMP and Bangor Hydro cheaper than the “standard offer” rate pegged by Maine’s Public Utilities Commission.

Until a couple years ago, however, CEPS preferred larger commercial accounts to smaller, residential customers.

Getting into the residential market took so long because few people understood how it worked, Jones explains. When C.N. Brown started working on the idea, it struggled to find a partner who understood the market.

In August 2011, Energy Maine, an Auburn-based CEP, opened its doors for residential supply and the company took off – within a year, according to reports, the company had 150,000 customers.

In comparison, CMP has 605,052 customers, while Bangor Hydro has 135,497, according to PUC.

C.N. Brown hopes to grab a slice of the emerging market and is offering deals to its existing heating fuel customers, like a $.05 discount per gallon of heating oil if they also purchase electricity.

Jones says name recognition may also help C.N. Brown – customers might be more comfortable buying electricity from a company they’ve been getting fuel from for years than trying out a new, unknown provider.

The comparative cost per kWh might bring in customers anyway – C.N. Brown is offering $.068 per kWh in CMP’s territory and $.066 cents in Bangor Hydro’s.

The current standard offer rate in CMP’s area is $.074 cents, but that price is set to drop to $.068 cents on March 1.

The cost of delivery from the companies is about $.06 per kWh. CMP and Bangor Hydro will provide maintenance, repair and billing for customers.

But unlike CMP and Bangor Hydro, which have their rates set every March by PUC, C.N. Brown can lower its price at will to compete with other CEPs – that means as more companies start providing electricity, consumers may see costs go down.

That type of market competition is nothing new to C.N. Brown, Jones says.

“We come from the oil industry that’s always very competitive,” he says. “We don’t know what it’s like not to be competitive.”

According to Jones, around 300 customers are already receiving electricity from C.N. Brown and he expects the number to rise, particularly after the company begins to publicize its new product in the new year.

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