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Standard Offer Bid Awarded for BHE Large Customers

Most Mainers to Have Lower Electricity Prices

February 6, 2009

FOR IMMEDIATE RELEASE February 6, 2009 Standard Offer Electricity Prices Drop 40% for Bangor Hydro-Electric’s Large Business Customers Prices fall 10%-44% for most Maine consumers

AUGUSTA, Maine – Today the Maine PUC accepted a bid on new standard offer energy prices for large commercial and industrial (C&I) customers of Bangor Hydro-Electric Company (BHE).

An initial round of bidding produced no final bids for standard offer supply to the large customers in BHE’s territory. Later this week, however, the Commission received wholesale and retail bids for this customer class, and chose a retail bidder today.

The new bid will result in a 40% reduction in electricity supply prices for BHE customers in this class. The price will fall from 13.3 cents per kilowatt hour (kWh) to an average of about 8.1 cents per kWh -- the lowest price in three years.

“Almost all classes of consumers throughout Maine will now be able to buy electricity at significantly lower rates,” said Sharon M. Reishus, who chairs the Commission. “And we are pleased that after an initial lag, the market was able to respond to the needs of these particular customers.”

The prices are effective March 1, 2009 and extend for six months. The new standard offer prices apply only to customers that have not made their own electricity supply arrangements.

Under bids awarded on Tuesday for other customer classes, average standard offer prices will drop 43% for medium C&I customers of Central Maine Power (CMP). Prices drop 33% for CMP’s large business customers. And prices drop 44% for BHE’s medium business customers.

Earlier this year the Commission awarded standard offer bids for residential and small business customers that will drop standard offer prices in both CMP and BHE territory by more than 10%.

In the territory served by Maine Public Service, standard offer prices will fall by about two percent for residential, small business and medium business customers. Prices for large business customers will rise by about six percent.

Chairman Reishus noted that the lower electricity prices reflect recent dips in the price of natural gas – the dominant fuel for generators serving Maine load. “These price reductions are undoubtedly good news for Mainers and Maine businesses,” she said. “But we mustn’t forget that these commodity prices can be volatile, and the best protection is to make the most efficient use of electricity possible.”

To help Maine residents and businesses reduce electricity use, the Commission operates Efficiency Maine (www.efficiencymaine.com). Since its inception in 2002, Efficiency Maine programs and incentives have produced documented reductions in electricity use which will save the Maine economy more than $300 million. Under Maine’s retail electric access rules, the PUC must ensure that standard offer service is available to all customers in Maine. The selected rates were chosen following a competitive bid process administered by the PUC, and the names of the suppliers selected will be withheld for two weeks, allowing time for supply arrangements.
Standard offer service is the default supply for electricity customers, meaning customers receive it if they have not purchased supply from another retail supplier or through an aggregator.
For more information on standard offer and energy delivery rates, go online to http://www.maine.gov/mpuc/industries/electricity/standardoffer/standardoffer_rates.html .