Posted on 12/15/2004 4:49:22 AM PST by SheLion
BANGOR - Mainers could be paying as much for electricity starting March 1 as they did five years ago when policy-makers promised lower prices once the state's electricity industry was restructured. Today, the Maine Public Utilities Commission likely will increase the standard-offer electricity rate by as much as 50 percent, from roughly 5 cents per kilowatt-hour to 7.5 cents.
It could mean paying about $16 more per month for the average homeowner.
Stephen Ward, the state's public advocate, expects this magnitude of price increase.
It's a vote that wasn't supposed to take place. Standard offer, or the default rate consumers pay for electricity in the absence of buying it from a power supplier, wasn't supposed to be an option anymore.
Five years ago, the originators of electric restructuring believed that by now power suppliers would be clambering over one another on price to sell electricity to residences and businesses. The competition to sign up residential users didn't come, however, because many power suppliers believed they couldn't sell enough electricity in Maine to justify the cost of setting up shop here.
Today's vote not only represents a milestone in the history of a restructured electricity market but also starts a discussion on whether Maine residents would have been better off if the market hadn't been dismantled at all.
On March 1, 2000, the state's two major power companies officially changed forever. Bangor Hydro-Electric Co. and Central Maine Power Co. were ordered to sell their power-generation systems but remain standing as regulated transmission companies.
Mainers saw the difference on their power bills with separate rates for electricity, transmission and distribution, and stranded costs or the price for legislatively mandated projects.
Some of the nearly $1.3 billion gained by Bangor Hydro and CMP from the sale of the generators has been - and continues to be - passed on to consumers through lower transmission rates.
But the anticipation of power suppliers wooing customers just like telephone companies fizzled quickly. Less than 1 percent of Bangor Hydro and CMP's combined 577,000 residential consumers rely on any source other than the standard offer provider for their electricity supply.
Ward said Monday that the comparison between a restructured and nonrestructured marketplace is hard to make. Most of the electricity sold in Maine is produced on power generators that use natural gas to fuel some of their operations, and natural gas prices have doubled in recent years, and other costs have gone up, too.
If Bangor Hydro and CMP still were power generators, they could have gone to the PUC at any time and asked for price increases to cover the cost of skyrocketing natural gas rates, Ward said.
"It's hard to know what rates would have been without restructuring," said PUC spokesman Phillip Lindley.
Mainers have been protected from rising electricity rates over the past three years because in December 2001 the PUC locked in a three-year standard-offer rate. Residential users in Bangor Hydro's service territory have been paying 5 cents per kilowatt-hour for standard offer, while homeowners in CMP's territory have been paying 4.95 cents.
"We got a great deal three years ago," Lindley said. "It was locked in. It was stable."
That comfy rate will end with today's PUC vote, which goes into effect March 1.
Even though the utilities have lowered transmission rates, and stranded costs have been reduced a minimal amount, the standard-offer rate that is chosen today could wash away those financial gains.
Before restructuring, Bangor Hydro's customers were paying 13.76 cents per kilowatt-hour for electricity, transmission and stranded costs combined. Today, it's 14.76 cents for standard offer, transmission and stranded costs combined, up 7.3 percent.
The price, however, still is below the February 2000 rate when it is adjusted for inflation. That rate would be 15 cents today.
If the standard offer, or the price for just the electricity, is increased to 7.5 cents, the combined rate will be 17.424 cents on March 1, or nearly 2.5 cents higher than the February 2000 rate when adjusted for inflation.
For the average homeowner who uses 500 kilowatt-hours per month, the increase will total $13.32.
On July 1, Bangor Hydro will reduce transmission rates by 2.5 percent, slightly more than a penny per kilowatt-hour.
Central Maine Power customers have fared better during the past five years. Before restructuring, CMP residential users were paying 13.14 cents per kilowatt-hour for electricity, transmission and stranded costs.
Today, homeowners in CMP's service territory are paying 11.51 cents for standard-offer, transmission and stranded costs combined, or 12.4 percent below February 2000.
Adjusted for inflation, the February 2000 rate would be 14 cents today.
If standard offer is increased to 7.5 cents, the combined rate will be 14.745 cents per kilowatt-hour, almost a penny higher than the February 2000 rate when adjusted for inflation.
For the average homeowner who uses 500 kilowatt-hours per month, the increase will total $16.18 monthly.
The PUC still will be receiving bids this morning from power generators looking to supply standard-offer power. The commissioners then will meet at 1:30 p.m. to deliberate the bids and select the best ones for both Bangor Hydro and CMP service territories.
Poor Seniors. Social Security increase about $23 dollars a month more, but along comes an increase in electric........which will pull out about $16 dollars of that SS increase.
Maine Gag Ping!
Who cares? It's a blue state problem. Everything costs more in the blue states.
So no more commercials about how the cost of electiricity has gone down?
Yes. Well, we aren't ALL blue in this state!
Yes sir... you folks who own businesses... be sure to consider Maine as a great place to do business... highest taxes per capita than the rest of the country and now you can pay 50% more for your electricity too... doesn't THAT sound great?
Got to laugh to keep from crying.
I'm a dumb illiterate red-state hick. Did Maine deregulate electricity, or what?
Put up those wind-generators along the Maine coast for all that clean, eco-friendly electricity. No need to buy those nasty, expensive fossil fuels...
A 50% increase will only take the average homeowner to $48.00/month? Down in S. Mississippi, a $60.00 bill means we were in one of the 2 cool monthas a year where neither the heat or the A/C had to run. I average $90.00/month for a 2-person household.
I'm quite settled and dug in so moving out of Maine is out of the question for me.
But if anyone outside of Maine is considering moving here and/or opening a business, they better do a lot of research.
The Lib side of the state house has a strangle hold on this state and they say "After me, you come first."
Maine government has turned our beautiful snow a virtual brown.
Gov Baldacci - D
I'm sure Baldacci will get right on top of this. Ha-ha-ha-ha!!
Blue States will never learn.
Maine government took a gamble and they (WE) lost!
Five years ago, the originators of electric restructuring believed that by now power suppliers would be clambering over one another on price to sell electricity to residences and businesses. The competition to sign up residential users didn't come, however, because many power suppliers believed they couldn't sell enough electricity in Maine to justify the cost of setting up shop here.
Today's vote not only represents a milestone in the history of a restructured electricity market but also starts a discussion on whether Maine residents would have been better off if the market hadn't been dismantled at all.
On March 1, 2000, the state's two major power companies officially changed forever. Bangor Hydro-Electric Co. and Central Maine Power Co. were ordered to sell their power-generation systems but remain standing as regulated transmission companies.
Damn am I glad we moved into NAS Brunswick base housing. Getting settled in, got cable and Net service set up yesterday. Kids started school this week and doing well. Life is good right now.
That's great!
We always lived in base housing as much as we could. I always enjoyed moving into a new place.
Best of luck to you!!
7.5 cents kwh is a bargain. Try Western New York where the rate is 16 cents kwh.
Well, New Yorkers make more money, too. You can't compare wages in Maine to New York.
Southern Maine has a nuclear power plant, but they closed it. At least, last I heard it was closed.
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