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Maine Public Utilities Commission
Public Utilities Commission
242 State Street
Augusta, Maine 04333-0018
Website: http://www.maine.gov/mpuc/, Email: email@example.com
CONTACT: Phillip Lindley, 207.287.1598, firstname.lastname@example.org
FOR IMMEDIATE RELEASE
January 15, 2002
Maine PUC Lowers Electric Standard Offer Price
For Commercial and Industrial Customers
Yesterday, January 14, 2002, the Maine PUC accepted bids for new standard offer energy prices for medium and large commercial and industrial customers in the service territories of Central Maine Power Company (CMP) and Bangor Hydro-Electric Company (BHE), to become effective March 1, 2002. The new prices are 41 to 49% lower than the current standard offer prices. The new standard offer prices for CMP commercial and industrial customers are, on average, about 4.2 cents/kWh for the medium and large classes. For BHE customers the prices are, on average, 4.2 cents/kWh for the medium class and 4.0 cents/kWh for the large class. The reductions represent an annual savings of almost $100 million per year for Maine businesses that take standard offer generation service. When combined with the rates these customers pay for delivery service, the total reduction ranges from 20% to 40%. Names of the supplier(s) chosen to provide the standard offer service will be released after a two-week period to allow supply arrangements to be completed.
Under Maine’s retail electric access rules, the Commission is responsible for ensuring that standard offer service is available to all customers in the State. Standard offer service is the default energy supply for electricity customers. Maine’s rules require that the Commission solicit suppliers to provide standard offer service through a competitive bid process. Standard offer service is currently provided to CMP and BHE medium and large customers with wholesale power supply procured by CMP and BHE, respectively. Currently, approximately 30% of the load in the large and medium classes is served by the standard offer. The annual retail electricity sales to these customers is about 6.8 million MWh. Competitive electric providers serve the remaining load.
The RFPs were issued November 14, 2001, seeking prices for one, two or three year terms. The Commission selected one-year terms for both CMP and BHE territories and both customer classes. The one-year terms were selected to ensure standard offer prices continue to track the market, allowing competitive energy providers to continue to compete. In addition competitive electric providers may offer longer-term packages for those customers who desire stability and predictability.
“I'm happy to be able to report that when market prices fall, as they have during the past year, we are able to pass those reductions along to standard offer customers,” said Tom Welch, chairman of the Commission. “I recognize that these lower prices present a challenge for competitors seeking to sell to individuals and groups in Maine, but these competitors have shown themselves to be very capable and aggressive, and with the very low wholesale market prices now prevailing I am confident that they will be able to compete successfully. Even though the standard offer prices for medium and large customers are low, they are only guaranteed for one year: This means that customers who want to be sure of price stability for a longer period should seek out opportunities in the competitive market. The Commission will do all it can to ensure that customers have the information they need to make the choices that are best for them.”
“Medium and large non-standard-offer customers whose current contracts may not end until later this year might find it cost-effective to acquire future supply now, while forward prices are low,” added Commissioner Bill Nugent.
Standard Offer Rates:
All PUC New Releases maybe found on our website at: http://www.maine.gov/mpuc/news-dir.htm
To arrange an interview with Chairman Welch or Commissioners Nugent or Diamond, please contact Phillip Lindley at 207.287.1598 or by e-mail at email@example.com. The Commission’s website may be accessed through the Maine School and Library Network at all public libraries in Maine.