Maine’s Public Utilities Commission has been involved in negotiations for three months trying to protect electricity consumers from an unfair rate increase.

Earlier this week, those talks ended badly, with Maine, Massachusetts and Connecticut dissatisfied with the settlement.

Maine will now make its case to the Federal Energy Regulatory Commission and, if need be, in court and try to stop a deal that could raise electricity rates by as much as 10 percent over the next four years.

The rate increases are in addition to other rate increases that could hit customers in Maine’s deregulated electricity market.

As it stands, the settlement would pay power generators billions of dollars on top of huge profits they’re already recording. The payment is designed to be a bridge for power producers until a new market deal can take effect in five years. That plan, which remains largely confidential, is said to adhere closely to a market-based standard supported by Maine.

We’ll call the rate hike what it is: An across-the-board subsidy for power companies, many of which don’t need it.

According to Kurt Adams, chairman of the Maine Public Utilities Commission, there are some generators that can make a reasonable case for the subsidy. About 40 percent of the electricity in New England is generated with natural gas, a fuel that has skyrocketed in price. Some of those generators, locked into pricing contracts, are struggling to survive, so the payment would be reasonable.

Other generators, who rely upon nuclear or hydro generation, however, aren’t suffering. Instead, they’re profiting mightily from the increase in market prices for electricity. Adams argues, and we agree, those companies don’t need a subsidy, which would translate into a windfall for them but come at the expense of Maine consumers.

Electricity prices in New England are higher than in other parts of the country. Adams points to a 1970s report that boils the region’s problem down: We don’t have the indigenous natural resources to produce electricity on a grid level; we have to ship it all in and take our lumps in the market.

Additionally, Adams says that the Locational Installed Capacity settlement, called LICAP for short, favors states that have not deregulated their electricity markets. At the urging of the federal government, Maine deregulated in 2005, splitting power production from generation. For large industrial customers and some mid-size businesses, deregulation has lowered prices. For residential customers, that’s not the case. Competition hasn’t developed as expected.

Deregulated states, Adams said, don’t have the ability to hedge against rate hikes because their systems aren’t as vertically integrated.

FERC will hear the state’s appeal first. The federal agency has the authority to rule in Maine’s favor or impose the rate hike on the state. If it does the latter, the state must then decide whether to sue. A strategy will be developed next week during a public hearing.

Electricity rates have gone up more than 50 percent in the last year, Adams said. Mainers can’t afford to take another hit.

In December, we learned that Central Maine Power customers would have to pay about 9 percent more for electricity beginning in March. CMP doesn’t control the price of electricity. It simply delivers it to customers. Luckily, CMP will offset some of the increase by reducing its delivery charges. That’s welcome relief.

Maine can’t take a federally imposed rate hike like the one being considered. If FERC rules against the state, the Public Utilities Commission has little option but to make its case in court. The standard for a rate hike says that it must be justified and reasonable.

The LICAP hike is neither.