With electricity costs on the rise and Maine’s supply standard offer scheduled to increase March 1, competitive energy providers — those companies that tout lower prices on your home’s power bills — are starting to adjust their rates.
And, in many cases, adjust upward.
Of the eight most popular residential competitive energy providers, known as CEPs, listed on the Maine Office of the Public Advocate’s website, six have now or will soon have prices nearly at or above the standard offer. One has a below-standard-offer price that will stay the same but starting March 1 will require a longer contract.
Only one, FairPoint Energy, maintains a price lower than the standard offer on the site without changing its contract length. It plans to keep that price until the end of the year. FairPoint Energy is a subsidiary of Connecticut-based Crius Energy. The company uses the FairPoint name under a licensing agreement with FairPoint Communications.
In Maine, electricity is made up of two parts: supply and delivery. Utility companies Central Maine Power and Emera Maine, formerly Bangor Hydro, deliver. CEPs supply.
Every year, the Maine Public Utilities Commission accepts bids for a supply “standard offer.” That standard offer becomes the default supply price and consumers don’t have to do anything to get it. For years, almost all Maine residents went with the standard offer because they either didn’t realize they had a choice or they found few, if any, options from which to choose.
That started to change in 2011, when Auburn-based Electricity Maine opened for business. With a mix of social media and traditional advertising, it was able to do what no other supplier had: educate consumers about their options and give them a price lower than the standard offer.
Today, Electricity Maine has about 165,000 customers in Maine and 65,000 in New Hampshire, with planned expansion into Massachusetts and, potentially, Connecticut.
But while Electricity Maine got consumers interested in CEPs, it hasn’t been able to keep its low rates. In a Sun Journal story on the company in 2011, co-owner Emile Clavet promised, “We will always beat the standard offer. You’ll never, ever pay more than the standard offer, or we won’t be back.”
Within a year and a half, two of the company’s three plans were higher than the standard offer. At the time, Clavet told the Sun Journal, “We did not anticipate such a rapid drop in prices from competition and we did not anticipate such a rapid increase in prices from natural gas prices going up. Now we are having to respond.”
Electricity Maine isn’t the only one increasing rates. Although competitors have flooded the market since Electricity Maine started, most of the popular ones are not able to beat the standard offer as electricity supply prices rise.
“Natural gas prices have gone up by about 60 percent,” said Electricity Maine co-owner Kevin Dean. “The people who make power run their electricity-making engines on (natural) gas.”
Starting March 1, the standard offer rate for CMP customers will increase from 6.83 cents per kilowatt-hour to about 7.56 cents. For Emera customers, it will increase from about 6.69 cents per kilowatt-hour to about 7.58 cents.
Of the most popular CEPs, North American Power is offering the lowest price: 6.69 cents per kilowatt-hour for both CMP and Emera customers through Dec. 31. North American recently doubled its contract term from three months to six.
All of the most popular CEPs now require contracts with early termination fees for consumers to lock in their lowest rates, but even those lowest rates are generally higher than the standard offer.
Fixed-rate plans can go up to nearly 10 cents per kilowatt-hour.
Rates and plans change quickly and without notice. The Public Advocate’s website, updated three weeks ago, shows Electricity Maine’s six-month fixed-rate plan to be 7.59 cents per kilowatt-hour, slightly higher than the 7.55 cents the company showed on its website Thursday.
The Public Advocate also showed a 24-month plan for 8.97 cents per kilowatt-hour while Electricity Maine’s site showed an 18-month plan for 9.24 cents per kilowatt-hour.
Although such long-term plans have higher fixed rates, Dean believes consumers will ultimately benefit from them.
“Our prediction: Over the next couple of years, you’re going to see electricity prices continue to climb,” Dean said. “And so we’re recommending, and it’s just our thought, longer-term fixed prices, even locking in a two-year deal, you’re going to be better off than buying a one-year deal. Yes, you might be buying it a little over standard offer, but by the time you get there a year from now, I think you’re still going to save money.”
Calls and emails to the other most popular CEPs were not returned Thursday evening.