LEWISTON — Electricity customers suddenly have a lot of options.
A year and a half after Auburn-based Electricity Maine became the first successful company to supply electricity to residential and small-business customers in Maine, other competitive energy providers have jumped into the market, giving consumers their first real choice when it comes to power.
"I confess, it took a little longer than I thought for competition to come into the industry," said Tom Welch, chairman of the Maine Public Utilities Commission.
Mainers have had the right to choose their power suppliers since 2000, when state law restructured the electric utility industry and prohibited major utilities such as Central Maine Power and Bangor Hydro from both supplying and delivering electricity. Those utilities could deliver power, but competitive energy providers, known as CEPs, would supply it.
But while they had the power to choose their suppliers, few small consumers did. Nearly all went with the "standard offer," a rate bid by suppliers, accepted by the Maine PUC on Mainers' behalf and requiring no action by consumers.
For years, CEPs didn't try to attract those small consumers. Most CEPs in Maine served only large accounts. They could make more money with one or two large businesses than with hundreds of small consumers, so few wanted to spend the time or money it would take to educate people and win customers.
In spring 2011, 11 years after the electric industry was restructured, only 0.5 percent of CMP's residential customers got their electricity from CEPs.
Then, about a year and a half ago, Electricity Maine opened for business. Its founders believed they had a way around the challenge and cost of marketing to hundreds of thousands of residential customers: social media.
They were right, partially. Electricity Maine's first customers heard about it through Facebook, friends of friends, workplace discussions and fliers. But soon after, Electricity Maine started to advertise. It now regularly runs ads.
It also now has nearly 200,000 customers across the state.
"We're still signing up hundreds every day," said co-owner Kevin Dean.
Although Electricity Maine wasn't the first CEP in Maine to serve residential and small business customers, it was the first to be successful. And since that success, others have entered the market.
"I don't mean this in an insulting manner, but there's always a herd instinct to marketing," Welch said. "And Electricity Maine came up with a plan that was quite effective, and they got a lot of customers."
Since fall, at least three new CEPs have begun signing up customers: Gulf Oil, a Framingham, Mass.-based fuel supplier and operator of the Cumberland Farms chain of convenience stores; Dead River, a South Portland-based company whose focus has been oil and propane delivery; and C.N. Brown, a South Paris-based company that owns all Big Apple stores and Red Shield Heating oil locations.
Also, Heutz Oil in Lewiston has partnered with Gulf Oil to create Heutz Electricity, a go-between for customers who would like Gulf-supplied electricity.
"We're not your father's oil company," said Tim Heutz, vice president of Heutz Oil and president of Heutz Electricity.
Each company is hoping to draw in customers with low prices. For small CMP customers, the standard offer supply price is currently 7.43 cents per kilowatt-hour. CEP prices range from 6.81 cents per kilowatt-hour from C.N. Brown to 6.99 cents per kilowatt-hour for Gulf. On Jan 2., Dead River plans to become the price front-runner by lowering its standard rate to 6.76 cents per kilowatt-hour.
But with fractions of a cent separating low from high, the CEPs also hope to win over customers with good service, charitable initiatives, bundled services and a "buy local" campaign.
"We really want to go after our own home-heating oil customers," said Jeff Jones, president of C.N. Brown Electricity and vice president of C.N. Brown, which is offering heating oil discounts for customers who sign up for electricity.
"Become an electricity customer and save money on the products you're already getting," Jones said. "And then also tell everybody else and then if they become a C.N. Brown Electricity customer, we'll give them a very competitive rate and let them save money on their heating-oil purchases, as well."
C.N. Brown has signed up about 500 people in the past month. It would ultimately like to see 10,000 to 20,000 of its 30,000 heating-oil customers become electricity customers.
Both Dead River and Heutz declined to say how many electricity customers they had signed up. But with nearly 200,000 customers, Electricity Maine is still clearly ahead of the pack. It recently expanded into New Hampshire, where it serves more than 32,000 customers, and is looking to expand into nine other states.
"We believe that this company, based here in Maine, can be a billion-dollar company in less than five years," Dean said.
Although Electricity Maine was the first successful residential CEP in Maine, Dean said he's happy others are coming.
"We're kind of single-minded in our focus and I think that will prove beneficial to our customers," he said. "But any time a customer has choices, that's awesome."
About 29 percent of CMP's residential customers now use CEPs, up from the 0.5 percent in spring 2011.
The PUC, which certifies CEPs, advises consumers to consider all rules, fees and fine print before signing up with a CEP. The company may have per-kilowatt rates that fluctuate, require a contract or charge an early termination fee if the customer wants to leave before the contract ends — all things that can cause a nasty surprise if customers aren't aware of them. The PUC also advises consumers to compare companies and to calculate what they could save over the standard offer.
Consumers likely will have more CEPs to compare soon. Welch, at the PUC, said a "small handful" more are looking to get certified.