Home customers of Central Maine Power Co. would see their overall bills rise roughly $3 a month if a rate-case settlement proposed by the utility and endorsed by key business and environmental parties is accepted by the Maine Public Utilities Commission.
The settlement also would “decouple” the revenue CMP earns from electricity sales, adopting a formula that gives the utility an incentive to participate in the state’s energy-efficiency programs, rather than promote electric sales in an attempt to boost earnings.
Gone is a controversial bid to get customers that generate some of their own power from solar and other renewable sources to pay higher monthly service charges.
The settlement agreement, called a stipulation, deals only with the costs of distributing electricity from the street to homes and businesses. It doesn’t include the costs of building large transmission lines or for energy supply, both of which have been rising lately.
CMP filed its proposal with the PUC on Thursday. The commission is expected to deliberate on it July 29.
The proposal brings to a head a 14-month proceeding that included 1,400 requests for data and two public hearings. Roughly a dozen major parties and a handful of citizens formally intervened in the case. All the major parties, which included the Conservation Law Foundation, Natural Resources Council of Maine, GridSolar LLC, Industrial Energy Consumer Group and the Maine Independent Colleges Association, signed on to CMP’s proposal.
“I think this is a good deal for everybody,” said Eric Bryant, senior counsel at the Maine Office of Public Advocate, which also signed the stipulation.
Bryant noted that CMP was seeking $41 million in new revenue, but that the stipulation shaves that request to $24 million on a rate base of $782 million.
The fact that so many participants in the case were able to reach a consensus during months of private meetings is significant, a spokesman for the PUC said Monday.
“A majority of the parties have signed onto this, and the commission will look hard at that,” said Harry Lanphear, the PUC’s administrative director. “It will be a major factor in whether they approve it.”
One facet of the stipulation, however, drew opposition from Environment Northeast. It took issue with a rate-design change that will increase charges for home customers who have below-average electric demand. The group said that sends the wrong signal about conservation and efficiency, and it chose not to sign the stipulation.
CMP initiated the proceeding in May 2013, to increase its distribution rates and decouple revenue from power sales, among other things. It also had sought to renew its five-year “alternate rate plan,” the performance-based method by which the PUC has set rates since 1995.
But the parties couldn’t agree on the alternate plan’s merits, and the concept was withdrawn in favor of a conventional rate case. If the PUC approves the stipulation, the $3 a month increase will remain in effect until CMP files a new rate case.
An average CMP home customer pays $78 a month now for a total bill that includes energy and distribution charges, so $3 more a month represents a roughly 4 percent increase. That number could change slightly, though, due to some related legal matters.
CMP said Monday it wouldn’t comment on the proposal while the PUC is considering it, but in a letter to the commission, it outlined why the stipulation should be adopted.
“The rate design provisions in the stipulation represent a careful balancing of several competing state policies and the interest of CMP and customers across and within the company’s rate classes,” a utility lawyer wrote.
A key element of the stipulation drops CMP’s request for so-called standby charges for renewable energy.
Those charges were aimed at homeowners and large institutions, including several of Maine’s private colleges, that have installed solar-electric panels. When those customers are generating their own power, they’re not buying it from the grid. That hurts CMP revenues. CMP wanted to charge those customers a special rate to reflect the fact that even though they aren’t buying power all the time, they expect CMP to provide them with reliable distribution services.
Standby charges are an issue in some other states. And they struck a nerve with Maine’s renewable energy industry, which turned out with its supporters to protest at the two public hearings.
“Those public hearings were 90 percent standby charge,” Lanphear said. “That was the topic. Outside companies were there, but lots of Mainers testified against that.”