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Home > Electricity > Request for Proposals for Long-term Contracts > Rate Impact Limitation

Rate Impact Limitation

As provided in Section 2.2 of the RFP, the Commission may not approve any long-term contract pursuant to this RFP that would result in an increase in electric rates in any customer class that is greater than the amount of the assessment charged under Title 35-A, section 10110, subsection 4 at the time that the contract is entered. The amount of the assessment under section 10110, subsection 4 is fixed at a rate of $1.45 per megawatt-hour.

For purposes of estimating the total limit on rate impacts resulting from any above-market costs associated with long-term contracts awarded pursuant to this RFP, the Commission has interpreted this provision to mean that only distribution level customers of the transmission and distribution utilities (Central Maine Power, Bangor Hydro Electric and Maine Public Service) may have a rate impact up to 0.145 cent/kWh. As an example, using the load data from 2009, electricity use by distribution level customers of the three T&D utilities was approximately 7.48 million megawatt hours. At the rate impact limitation level of $1.45 per megawatt-hour, that would result in a total limit on rate impacts of $10.85 million, which will be treated as the aggregate annual cap on funds available to cover above-market costs for all long-term contracts entered into under this statutory authorization. The amount received per project and/or per megawatt-hour will depend on the bids received and the quantity of power for which contracts are authorized.

Order on Rate Impact Limitation Provision (Word)