Maine Public Utilities Commission
Public Utilities Commission
242 State Street
Augusta, Maine 04333-0018
Website: http://www.state.me.us/mpuc/, Email: firstname.lastname@example.org
CONTACT: Phillip Lindley, 207.287.1598, email@example.com
FOR IMMEDIATE RELEASE
July 21, 2004
Electric Standard Offer
Prices Increase For
Commercial and Industrial Customers
Reflects Recent Energy Market Price Conditions
AUGUSTA, MAINE – Yesterday, July 20, 2004, 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 September 1, 2004, through February, 2005. On average, the new prices are from one-eighth to one-half of a cent/kWh above standard offer prices for the current six-month term through August 2004. The new standard offer prices for CMP commercial and industrial customers are, on average over the 6-month period, about 6.59 cents/kWh for the medium class and about 6.48 cents/kWh for large class. For BHE customers the prices are, on average, 6.65 cents/kWh for the medium class and 6.26 cents/kWh for the large class. 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 today were issued in June 2004, 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 to allow standard offer prices to track market changes. The shorter term will also allow competitive electric providers 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 a competitive provider on their own or through an aggregator. Currently, approximately 35% of the load of customers in the combined CMP and BHE medium and large classes receive standard offer service; the remaining customers receive their energy supply from competitive providers. The total state load served by competitive providers is approximately 38%.
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 4.95 cents/kWh for CMP customers and 5.0 cents/kWh for BHE customers through February of 2005.
“While it is always disappointing to see prices for electricity increase, I an encouraged by the vigorous competition among suppliers we saw in this bidding cycle and the relatively modest size of the increases,” said Tom Welch, chairman of the Commission. “The price of electricity supply in Maine and throughout New England is driven by the price of natural gas, which fuels much of our generation. Because the price of natural gas has risen dramatically during the past few months, I am not surprised that electricity prices have also increased. One advantage of our current standard offer process is that, if gas prices moderate or if other (and perhaps cheaper) fuels emerge in the market, standard offer prices will reflect those changes. Customers who seek longer term price stability should, of course, explore their options in the competitive market.”
For more information:
Standard Offer Rates:
All PUC News Releases may be found on our website at: http://www.state.me.us/mpuc/newsreleases2004.htm
To arrange an interview with Chairman Welch or Commissioners Diamond or Reishus, please contact Phillip Lindley at 207.287.1598 or by e-mail at firstname.lastname@example.org. The Commission’s website may be accessed through the Maine School and Library Network at all public libraries in Maine.