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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
July 20, 2005

Electric Standard Offer Prices Increase For
Commercial and Industrial Customers

PUC To Commence Investigation of Energy Efficiency Alternatives To Mitigate Fossil Fuel and Potential Capacity Cost (LICAP) Increases

 

AUGUSTA, MAINE – Yesterday, July 19, 2005, the Maine PUC accepted bids for new standard offer energy prices for medium and large commercial and industrial customers of Central Maine Power Company (CMP) and Bangor Hydro-Electric Company (BHE) for a six-month term beginning September 1, 2005.  For CMP customers, the new prices are, on average over the 6-month term, about 8.3 cents/kWh for both the medium and large classes.  For BHE customers the average prices are about 8.5 cents/kWh for the medium class and 7.8cents/kWh for the large class.  These reflect increases over existing standard offer prices:  CMP medium class – up 22%; CMP large class – up 27%; BHE medium class – up 23% and BHE large class – up 24%.  The increases result from corresponding increases in imported fossil fuel, the fuels that dominate New England wholesale power market prices, and may reflect potential FERC-set capacity costs (LICAP) that could be in place as of January 2006. 

            “This increase of more than 20% in electricity supply costs is a burden that Maine business cannot afford,” said Kurt Adams, Chairman of the Maine PUC.  “This is a reminder that an over-reliance on imported fossil fuel puts our economy at substantial risk.”  Adams announced that the PUC will commence an investigation of Efficiency Maine, Maine’s energy efficiency program, and make necessary improvements to ensure that Maine business is getting all of the energy efficiency tools that it needs to combat rising electricity costs.  “Maine business needs more tools to manage increasing electricity costs, it is our responsibility to make sure that they get them,” Adams said.  Efficiency Maine is a statewide effort to promote the more efficient use of electricity, help Maine residents and businesses reduce energy costs, and improve Maine's environment.  The Maine PUC administers Efficiency Maine.

The names of the suppliers 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.    

The RFPs that resulted in the bids accepted yesterday were issued in June 2005.  The RFPs sought prices for a six-month term.  The Commission prefers a relatively short term such as six-months for these customer classes to allow standard offer prices to track market changes and, thereby, better enable other retail suppliers to compete.  The shorter term will also allow other retail suppliers to compete by offering customers longer terms with price stability.   

Standard offer service is the default supply for electricity customers, which means that customers receive it only if they have not purchased supply from another retail supplier on their own or through an aggregator.  Currently, approximately 10 to 15% of the electric load of CMP and BHE large customers and 60 to 65% of the load of CMP and BHE medium customers is supplied by standard offer service; the remaining customers receive their energy supply from other retail suppliers.  Even though standard offer price increases will not directly impact most large customers and a substantial amount of medium customers, they are a window on what is happening in the marketplace. 

Residential and small commercial customers of CMP and BHE, who are unaffected by today's decision, will continue to receive standard offer service at prices determined earlier this year – 6.95 cents/kWh for CMP customers and 7.1 cents/kWh for BHE customers.  The residential/small commercial prices remain in effect through February of 2006. 

 

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For more information:

Standard Offer and Delivery Rates:

http://www.maine.gov/mpuc/industries/electricity/standard_offer/standard_offer_rates.html

All PUC News Releases may be found on our website at: http://www.maine.gov/mpuc/staying_informed/news/press_release.shtml 

To arrange an interview with Chairman Adams or Commissioners Diamond or Reishus, 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.