As most of you already know, energy and fuel prices have increased dramatically over the last several months. This is also true for electricity supply prices, which impacts your electricity bill.
It’s important to understand that there are two parts to your electricity bill. First, there is electricity delivery, which covers the cost of meters, poles, wires, substations, etc. that your local electric utility needs to get the electricity to your home or business (for many Mainers this is CMP or Versant). Second, there is electricity supply, which is the cost of the actual electricity that you use. Electric consumers have the choice to purchase electricity supply by contracting with a competitive electricity supply provider (CEP) or by using the Standard Offer.
Standard Offer is the default electricity supply provided to customers who do not choose to contract with a CEP. The Standard Offer supplier is chosen through a competitive bidding process conducted by the Maine Public Utilities Commission, as required by Maine law. The Commission does not decide the rate – it is based on bids received and driven by market conditions. In fact, while the Commission regulates electric distribution and plays a direct role in setting rates for this service, it does not regulate or approve rates for electricity supply.
As most of you know from your first electric bill this year, Standard Offer prices increased effective January 1, 2023. While the new rates are higher than we hoped they would be, they are the lowest bids we received from energy suppliers.
About half of Maine and New England’s electricity generation comes from natural gas. The recent Standard Offer price increases are related to increases in wholesale electricity market prices due primarily to international market conditions and constraints on the availability of natural gas in our region. Although prices this year aren’t what we would like to see, we are fortunate that Maine’s supply rates are lower than all other New England states.
While Standard Offer rates have increased the past two years, that has not always been the case. In fact, in 2019 and 2020, Standard Offer rates decreased. While market conditions are difficult to predict, we hope supply rates will decrease in the future when market conditions improve.
Utilities like CMP and Versant do not provide electricity supply, nor do they benefit from electricity supply rates. Your electric utility includes them on your bill because they are required to do so by law that customers receive only one bill. CMP and Versant have both requested distribution rate increases, but those cases have not yet been decided. These proposed rate increases are separate from and unrelated to Standard Offer supply prices. We will carefully review the requests and, if any increase is approved, those rates would go into effect later this year.
You may have the option of choosing your own electricity supplier, but you will only save money if the electricity supply price offered to you is lower than the Standard Offer price. Currently Standard Offer prices are very competitive but if you decide to shop around, there are important things to consider when choosing an electricity supplier. For more information and a list of CEPs, please go to our webpage at www.maine.gov/mpuc.
The Commission also recently approved new optional electric delivery rates for energy-efficient technology, including heat pumps and electric vehicles, for customers of CMP and Versant. If you have a heat pump or an electric vehicle, we encourage you to contact your utility to find out if you qualify for a special rate.
Finally, there are a number of programs available to assist eligible ratepayers with paying utility bills and to help conserve electricity as a way of lowering energy costs. If you are having difficulty paying your utility bill, we encourage you to seek assistance, even if you have never done so in the past. In 2022, the Commission expanded the electric Low-Income Assistance Program, increasing funding from about $7.8 million to $15 million and doubling the number of applicants who are eligible for funding from the program. Maine’s electric and natural gas utilities also offer other financial assistance programs to qualifying customers.
The Commission has developed a comprehensive list of statewide assistance programs available at www.MaineElectricHelp.com. In addition, Governor Mills and the Maine Legislature recently approved assistance checks for most Mainers in the amount of $450, which have already begun being distributed.
We know these are challenging times and we hope this information helps. Please know that we will continue to work to ensure that Maine citizens have access to safe and reliable utility services at rates that are just and reasonable for customers and public utilities, while also helping achieve reductions in state greenhouse gas emissions.
Philip L. Bartlett II
Chair, Maine Public Utilities Commission
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