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Maine Public Utilities Commission

NEWS RELEASE 

Maine Public Utilities Commission
242 State Street
Augusta, Maine 04333-0018
Website: http://www.maine.gov/mpuc/, Email: maine.puc@maine.gov
CONTACT: Phillip Lindley, 207.287.1598, phil.lindley@maine.gov

 


FOR IMMEDIATE RELEASE
January 23, 2003

Electric Standard Offer Price Increases For
Commercial and Industrial Customers

Reflects Recent Energy Market Price Increases

 

AUGUSTA, MAINE – Yesterday, January 22, 2003, 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), for the period March 1, 2003, through August 31, 2003.  The new prices are substantially higher than the current standard offer prices, reflecting increases in energy market prices at the wholesale level.  The new standard offer prices for CMP commercial and industrial customers are, on average over the 6-month period, about 5.9 cents/kWh for the medium class and about 6.1 cents/kWh for large class.  For BHE customers the prices are, on average, 5.9 cents/kWh for the medium class and 5.8 cents/kWh for the large class.

When combined with the rates these customers pay for delivery service, the total increases average between 10% and 20% (compared to standard offer prices for the comparable 2002 period).  These are increases of about 25% to 35% for generation service (from the comparable period last year; prices for energy for these classes vary by season or by month, and prices are generally higher on average in the March through August period than in the September through February period), but apply only to those customers who do not purchase generation service on the open market.  The standard offer price for medium and large customers in 2001 was over 8 cents/kWh, which indicates how volatile energy prices can be.  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 must ensure that standard offer service is available to all customers in the State.  Maine’s rules require that the Commission solicit suppliers to provide standard offer service through a competitive bid process.   Standard offer service is the default supply for electricity customers, which means that customers receive it only if they have not purchased supply from a competitive provider on their own or through an aggregator.  Currently, customers in the medium and large classes representing approximately 50% of the load receive standard offer service; the remaining customers receive their energy supply from competitive providers.  Residential and small commercial customers in CMP and BHE territory are unaffected by today's decision:  those customers will continue to receive standard offer generation service at the current rate of 5 cents/kWh through February of 2005.  The RFPs were issued last December, seeking prices for six-month or one year terms.  The Commission selected six-month terms for both CMP and BHE territories and both customer classes.  The Commission will solicit bids for the period beginning September 1, 2003 during the summer.

“These new prices will, unfortunately, create a burden for customers who have been unwilling or unable to find suppliers in the competitive market.” said Tom Welch, chairman of the Commission.  "Like other energy costs, however, electricity costs can be volatile, and the recent cold weather, combined with higher energy prices throughout the world, resulted in higher bids for standard offer service than we were able to obtain last year.  Standard offer service for customers in the medium and large classes is intended as a backstop.  It is not intended to guarantee the best deal for customers at all times.  We encourage customers who seek greater long term stability and predictability than the standard offer can provide to investigate opportunities in the competitive market."

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For more information:

Standard Offer Rates:
http://www.maine.gov/mpuc/Electric%20Supplier/Standard%20Offer%20Rate.htm

Delivery Rates:
http://www.maine.gov/mpuc/Electric%20Supplier/ElectricRates.htm

All PUC News Releases may be found on our website at: http://www.maine.gov/mpuc/newsreleases2003.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 phil.lindley@maine.gov.  The Commission’s website may be accessed through the Maine School and Library Network at all public libraries in Maine.