A majority of electricity customers in southern and central Maine will see a spike in the supply portion of their monthly bills beginning Jan. 1, after action Wednesday by the Maine Public Utilities Commission.
The PUC accepted competitive, 12-month bids that will result in a new standard offer price of 7.921 cents/kWh, an 18 percent increase in the state’s default rate for electricity supplied to homes in Central Maine Power Co.’s service area. The standard offer is automatically set for customers who don’t purchase their own electricity supply in the market.
About 50 percent of the sales in CMP’s service area are customers who use the standard offer. There are nine competitive energy suppliers listed on the Public Advocate’s website for consumers who don’t want to accept the standard offer.
For a total monthly residential bill – combining supply from competitive bidders and delivery charges from CMP – the increase will average 8 percent, the PUC calculated.
The pending rate change continues a trend. Last year at this time, the commission voted to accept offers from two companies that resulted in the current standard offer supply rate rising by 3.5 percent, to nearly 6.7 cents per kilowatt hour.
Wednesday’s figures for customers in CMP’s service area were in line with rates announced Tuesday for residential and small-business customers in eastern Maine served by Emera Maine. They account for 60 percent of Emera’s electricity sales. Bid prices there equate to 7.2 cents per kilowatt hour, a 14 percent hike over 2017 levels. For the total residential bill – combining supply and delivery service – an average Emera residential customer can expect an increase of about 5 percent in the monthly bill, the PUC calculated.
Small businesses received the same rate as homeowners.
Mid-size businesses that use the standard offer will see an increase of about 21 percent compared with this year. Their new prices differ by month, equating to about 8.3 cents/kWh on average over the year, varying from 6.6 cents/kWh in May to 11.6 cents/kWh in February.
The new rates are only for the energy-supply portion of electricity bills, not the distribution services provided by Emera and CMP. Under Maine’s 18-year-old electric restructuring law, utilities only distribute power, they don’t generate and sell it. Total electric bills in southern Maine currently average about $83 per month, a combination of the supply and distribution charges.
“The standard offer prices set this week reflect the best bids received from a competitive auction process,” PUC Chairman Mark Vannoy said in a release. “As with the Emera auction yesterday, the price increases for this CMP auction are primarily driven by the increase in capacity market clearing prices in New England. The capacity cost increases in the New England regional wholesale market were set in an auction conducted by ISO-NE three years ago. The higher prices result from the need for new generating plants to replace plants that were retiring.”
The names of the suppliers selected for CMP’s service area will be released in two weeks, allowing time for power supply arrangements to be finalized.
Electricity supply rates in New England are largely dependent on the wholesale cost of natural gas, which is used by power plants to generate roughly half the region’s electricity. Except in 2013 during a cold winter that caused gas prices to spike, supply rates generally have been falling for a decade.
More information about standard offer rates is available on the PUC’s website.
A new law requires suppliers to disclose whether their rate is higher than the standard offer available to everyone, send out renewal notices and only renew a contract if a customer explicitly agrees.