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Commissioners Increase Accountability and Impose Mandated Performance Standards for CMP Customer Service; Levy Record $10M Disallowance

January 30, 2020

Hallowell, Maine - January 30, 2020 - Today, Commissioners of the Maine Public Utilities Commission ("Commission") deliberated CMP's metering and billing case and the investigation into CMPs rates. A summary of the major decisions ordered today are detailed below.

All three Commissioners feel strongly that CMP must meet higher standards of performance in both customer service and reliability, stated Philip L. Bartlett II, Chairman of the Commission. We have listened carefully to customer concerns and closely examined all the facts in these cases. Our decisions today will hold CMP accountable. And will require a dramatic change in how CMP treats its customers. CMP must demonstrate that service and reliability are its top priorities. In addition, the earnings disallowance of at least $10 million is among the largest ever for an electric utility and emphasizes the overall change Commissioners expect CMP to undertake immediately.

Major items ordered by the Commissioners include:

Mandated Performance Standards and Increased Accountability: The Commission found serious problems with CMPs customer service functions, particularly with its call center from 2016 to 2019. The Commission also found that CMP imprudently implemented its billing software, known as SmartCare. The Commission orders CMP to do the following, at its own cost: (a) conduct additional testing of SmartCare and remedy all remaining defects under third-party oversight; (b) establish an independent process to investigate and resolve open customer complaints about high usage; (c) report to the Commission monthly on the status of closing out the few open defects in SmartCare; (d) submit a comprehensive plan for managing the ongoing maintenance of the SmartCare system; and (e) hire an independent third-party to monitor and evaluate call center performance. These requirements allow the Commission to take swift action should problems arise.

Management Audit. The Commission orders, and will oversee, an independent audit of CMP and its affiliate service companies to evaluate the management structure and make recommendations to improve the quality of CMPs total customer service. This will address concerns about whether there are fundamental problems with the companys management structure that has led to the erosion of service quality experienced by customers.

$10M Disallowance: The Commission orders a substantial reduction to CMPs return on common equity of 100 basis points, which represents a minimum of nearly $10 million in earnings reduction. This disallowance may only be lifted when CMP meets all benchmarks for all service-quality metrics for at least 18 consecutive months and formally demonstrates to the Commission that problems have been solved. This disallowance is the largest ever imposed by the Commission on a transmission and distribution utility due to poor management. As a result, CMP will likely have the lowest common-equity return of any electric utility in the country until its performance improves.

Rates: The Commission orders a modest rate increase but requires CMP to invest in customer service and reliability. The approved increase is less than half of what CMP requested and will result in a 2% increase of an average residential monthly bill. The modest increase in distribution rates will be more than offset for the average bill due to the January 1, 2020 decrease in the standard offer price of electricity supply. The net effect should result in a 7 to 8 percent decline in the average electric bill from CMP compared to last year.

High Usage Concerns: Remaining high usage complaints will be addressed on an individual basis. The Commission will investigate all customer complaints about high usage, and if necessary, refer cases for an independent energy audit. While many billing errors occurred due to the poor implementation of CMPs billing system, those errors and defects have been addressed.

Refunds and Credits: The Commission orders CMP to issue $358,600 in credits to CMP customers who are on the Electricity Lifeline Program due to a billing defect. In total, CMP customers who reported and filed complaints from November 1, 2017 through December 31, 2019 have received more than $5 million in credits and refunds from CMP. Any customer who has experienced a billing error that has been verified will be made whole.

Interim Payment Plan: The Commission orders that all customers using the interim payment plan will continue to be protected until their individual case is resolved as long as they continue to pay the undisputed portion of their bills. The Commission will contact each customer individually and work with each customer to resolve their individual concern. Therefore, customers on the interim payment plan administered by CMP will be transferred to a resolution process managed by the Commissions Consumer Assistance and Safety Division. As a reminder, customers always have the right to file a formal complaint with the Commission.

Final Commission Orders in both cases will be issued by the Commission in the next few weeks.

About the Commission

The Maine Public Utilities Commission regulates electric, telephone, water and gas utilities to ensure that Maine citizens have access to safe and reliable utility service at rates that are just and reasonable for all ratepayers. Commission programs include Maine Enhanced 911 Service and Dig Safe. Philip L. Bartlett, II serves as Chairman, Bruce Williamson and Randall Davis serve as Commissioners.

Learn more about the Commission at www.maine.gov/mpuc


Press Contact Harry Lanphear, Administrative Director, (207) 287-3831 or Harry.Lanphear@Maine.gov