Some Maine residents who rely on natural gas-fired electricity could see a nearly 90% jump in their monthly rates starting in January, according to the Maine Public Utilities Commission.
“Unfortunately, sharp increases in natural gas prices are resulting in higher electricity supply costs for the coming year,” said Chairman Phillip L. Bartlett II. “The increase is primarily driven by New England’s wholesale electricity market prices, which have increased dramatically.”
A commission spokesperson confirmed to NGI that “more than half” of Maine’s electricity is generated from natural gas.
The commission on different occasions this month accepted bids and set “standard offer” electricity supply rates for residential and business customers of Versant Power, Bangor Hydro District and Versant’s Maine Public District (MPD), as well as Central Maine Power (CMP).
Residential standard offer customers of Versant-Bangor Hydro and Versant-MPD can expect 88.6% and 84% increases in supply rates, respectively, the commission said. The state regulator said the hike for CMP standard offer customers would be 83%. The supply rate increases take effect Jan. 1, and the commission projects the average residential standard offer customer using 550 kWh/month would pay about $30/month more. Currently, the total bill for an 25106average residential standard offer customer is about $101 with Versant and $96 with CMP, the commission said.
Customers who do not choose their electricity supplier receive standard offer supply by default, the commission explained. The standard offer amount makes up about 50% of a total customer bill. An electric bill also includes electricity delivery rates, the regulator added.
On Tuesday, the commission said that it has entered into a three-year contract naming New Brunswick Energy Marketing Corp. as the standard offer provider for MPD residential, small non-residential and medium non-residential classes beginning Jan. 1. It noted the three classes’ prices are indexed to standard offer prices in comparable classes for CMP and Versant-Bangor Hydro through 2022.
Medium-class customers would see the supply portion of their bill go up 86% on average, said the commission. Pointing out that prices in this class vary by month, the regulator said the annual average price will be about 10.47 cents/kWh. It also emphasized that the increases “apply to customers who do not purchase electricity from a competitive supplier of their choosing,” instead opting for the standard offer by default.
What About Businesses?
According to the commission, the new prices for Versant and CMP’s medium-class businesses vary by month but average 11 cents/kWh. The supply portion of these customers’ bills would increase on average 77.7% for Versant and 82% for CMP for the year, the regulator said. The commission also pointed out that prices for Versant and CMP’s large business customers are indexed to market prices and set prior to each month
The regulator noted that it set the rates through a competitive bid process involving multiple sealed proposals, as required by state law.
Bartlett called the supply rates “competitive” and the commission observed that regional electric power market prices are “strongly influenced by natural gas.” Moreover, the commission stated that prices are trending sharply upward across energy sectors. Although natural gas prices jumped 94.8% year/year as of Oct. 2021, heating oil rose 121.7% during the same period, the regulator said. In addition, the commission noted the standard offer rate and wholesale electricity rate rose 77% and 126.3%, respectively, from November 2020 to November 2021.
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