If granted, the reduction would be the third consecutive cut since March 2000.

AUGUSTA (AP) – The state Public Utilities Commission is reviewing a plan by Central Maine Power Co. to cut electricity distribution rates by 7 percent, which would save the average residential customer $2 monthly.

The reduction would be the third consecutive cut since rates were trimmed by 10 percent in March 2000, shortly after the company was purchased by Energy East Corp. of New York.

The rate cut would be effective from July 1, 2003 to June 30, 2004.

Public Advocate Stephen Ward, whose office represents CMP rate payers at PUC proceedings, said the Augusta company has retired the remaining $10.3 million in costs associated with a January 1998 ice storm, which crippled large sections of the utility’s grid structure.

When the infrastructure was repaired, CMP had replaced more than 1 million feet of wire, more than 3,000 poles and more than 2,000 transformers. Estimates at the time pegged the damage at about $50 million.

Federal funds covered a portion of the costs.

The PUC staff is reviewing the CMP rate case, which was filed on March 18, said Phil Lindley, spokesman for the commission.

When CMP customers receive their monthly bills, about two-thirds of the total cost pays for distributing electricity to their homes and buildings.

The remaining portion of the bill pays for electricity generation at power plants.

CMP’s average residential bill is $60 a month, said John Carroll, spokesman for the company. The proposed cut in distribution rates would save $2 from the average bill, he said.

Rates were reduced by 7 percent in March 2002 and by another 2 percent in July 2002.

In addition to having paid off the ice storm costs, CMP is able to plan for another rate cut because two other financial accounts worth a total of $7.6 million have been retired.

CMP is in the third year of an alternative rate plan designed to keep rates below national inflationary levels. The company previously operated under a similar five-year containment plan tied to inflation indexes.