PORTLAND (AP) – Electric rates have grown rapidly over the past two years but Maine’s public advocate says the state’s electric deregulation law has managed to reduce the gap between Maine’s utility costs and the national average.

Overall, Maine’s electric rates jumped nearly 10 percent in 2005 and again in 2006, according to the U.S. Department of Energy. But nowhere has the problem been more profound than in northern Aroostook County, where rates jumped 40 percent this year.

State regulators were forced to declare a “market failure” in northern Maine after only one bid was received for “standard offer” service in December.

“The reality is that competition, as had been hoped for with deregulation, is not taking place up here,” Maine Public Utilities Commission Chairman Kurt Adams said Thursday from Presque Isle, where he was getting an earful from local residents.

Problems in the Maine Public Service territory in Aroostook County are unique because it’s not connected to the New England power grid. It’s connected to the power grid in New Brunswick, where the electric utility is regulated.

Nonetheless, some are questioning whether Maine’s electric restructuring law needs some adjustments after two years of big increases.

Overall, an Associated Press analysis of federal data shows consumers in the 17 deregulated areas paid an average of 30 percent more for power in 2006 than their counterparts in regulated states. That’s up from a 24 percent gap in 1990.

Maine’s 1997 deregulation law required electric utilities to confine themselves to either power production or transmission and distribution.

Because Central Maine Power, Bangor Hydro-Electric Co. and Maine Public Service Co. were all relatively small, they chose to sell their power plants, which were snapped up at a premium. That allowed the utilities to pass savings onto consumers.

The idea was that electricity suppliers would compete and consumers would win. But Maine’s small size failed to lure many competitors.

Since the changes went into effect in 2000, electric rates in Maine dropped for several years before beginning to increase. Overall, rates grew 16 percent from 2000 to 2006.

On Wednesday, the Maine Legislature’s Utilities Committee will discuss several bill that would roll back Maine’s deregulation law by varying degrees.

The proposals range from allowing the MPUC to negotiate for long-term capacity contracts, blunting the costs passed on by the operator of the New England power grid, to allowing utilities like CMP to get back into the power generation business.

Another bill would create a separate power agency for northern Maine with the goal of solving the problems in Aroostook County.

Central Maine Power, the state’s largest utility, believes it’s time to begin making some adjustments to an electric restructuring law that was created as something of a “public policy experiment,” said spokesman John Carroll.

CMP is backing one of two proposals that would allow electricity delivery utilities to get back into the power generation business.

“We think there are aspects of deregulation that have not worked – or at least have not worked as advertised,” Carroll said.

Maine’s public advocate opposes efforts to let CMP and other utilities get back into the power generation business.

One goal of electric deregulation was to remove from rate payers the risk associated with building and running plants, and it has been successful in that respect, said Eric Bryant, the public advocate’s senior counsel.

The law also has helped bring Maine rates closer to the national average. In 1999, Maine electric rates were 60 percent higher than national average, and the figure dropped to 39 percent in 2006, Bryant said.

“Those market forces are serving customers. It could be better, but it was worse under the former regime,” he said.