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How do Maine's electricity costs compare with those of the region?

Maine’s electric prices track those of the New England region and, particularly for businesses, tend to track lower than those of the rest of New England (see figures below):

New England as a region has higher electricity costs than other regions in the nation because it does not have its own indigenous power supply like the coal of the south or the oil of Texas or big hydro of the northwest.

Maine’s electricity supply costs are determined by the New England wholesale market prices, which generally track the cost of natural gas fueled generation. Natural gas costs have declined in recent years due to over-supply from depressed demand as a result of the national and global recession and recent discoveries of natural gas supply in shale. Wholesale electricity prices in New England have declined similarly, and have resulted in reductions – in turn – to retail supply prices in Maine as new supply (such as for standard offer service) is acquired at these reduced price levels.

The price of electricity for Maine customers includes several separate elements. Supply (includes energy generation, capacity, and ancillary costs) is determined by competitive markets and not regulated by the Commission. Distribution is provided by the utilities and regulated by the Commission. Transmission costs are regulated by Federal Energy Regulatory Commission (FERC – a federal regulatory body). Stranded costs are a small and declining component of delivery (for example, less than ½ cent per kilowatt hour for Central Maine Power).

The residential price of electricity at this time: For supply, approximately 9 cents per kilowatt hour (kWh), based on standard offer price (a retail price) in Central Maine Power’s territory; plus transmission and distribution combined cost of approximately 6 cents per kWh, for a total on customers’ bills of just under 16 cents per kWh (based on 2009 residential rates).

The table below provides a comparison of retail prices for various classes of customers in Maine and other states in the northeast as of Fall 2010.

• EIA “Electric Power Monthly with data for September 2010” (12/17/10)

The graphs below show how retail prices have tracked over time for Maine residential, commercial and industrial customers compared to the rest of New England.