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 31, 2006

The Maine Public Utilities Commission Declines to Accept Settlement on Federal Rate Hike

Proposed federal rate plan would provide a windfall to
energy companies at a time of high profits

WASHINGTON, DC – Today the Maine Public Utilities Commission left settlement talks on a proposed rate hike for New England. The settlement talks have been hosted by the Federal Energy Regulatory Commission (“FERC”) in Boston and in Washington, D.C. for the past several months to resolve differences among state regulators, consumer groups and the energy companies over a multi-billion dollar rate hike called “LICAP” proposed for the region by ISO New England, the regional grid operator. “With electricity supply prices at historic levels, Maine consumers cannot stand another federally imposed rate hike,” said Kurt Adams, Chairman of the Maine Public Utilities Commission. “At some point you have to vote with your feet, and that’s what we did today,” said Adams.

“The proposed settlement plan would pay energy companies in Maine and the region hundreds of millions of dollars a year, on top of the huge profits they are pulling out of the region through record high electricity rates,” said Adams. “There is no way Maine’s working families can afford this rate hike,” Adams said.

Maine gets especially hard hit because Maine’s electricity restructuring act directed utilities to sell off their generating assets. “Because we do not have generation assets to ‘hedge’ the impact of the rate hike, Maine consumers take the hit worse than any other state in New England,” Adams said. Under the proposed settlement consumers in Maine could see electricity rates rise between 5% and 10% over the next four years. “This state followed the federal government’s lead and totally deregulated our electricity markets. If FERC accepts this settlement and thereby punishes Maine for restructuring, it will be a clear message that they have abandoned the nation’s experiment with electric power sector deregulation,” Adams said.

Last year a FERC administrative law judge approved a rate increase on New England’s electricity consumers in a massive unfunded mandate called LICAP. For the past several months Maine has been working with other states and energy companies to come up with a compromise. The Maine Public Utilities Commission will formally deliberate its position on the LICAP settlement soon.

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For more information:

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.