In an unexpected turn, thousands of electricity customers in southern Maine will see a slight increase in the supply portion of their monthly bills following action Wednesday by the Maine Public Utilities Commission.

The PUC approved an increase in the state’s default rate for electricity supply to homes in Central Maine Power’s service area, starting in January.

After reviewing multiple bids from power providers, the commission voted to accept offers from two companies that will result in the standard offer supply rate rising by 3.5 percent, to nearly 6.7 cents per kilowatt hour. For a typical home that uses 550 kilowatt hours a month, the cost of buying electricity will increase by $1.36, to $36.80.

Small businesses received the same rate as homeowners. Mid-size businesses that use the standard offer will see their rates fall by 1.3 percent on an annual average. Their rates vary by month.

The increase for small customers in CMP’s service area runs counter to market trends, which were reflected in the PUC’s bid selection Tuesday in Emera-Maine’s Bangor service area.

The pending Emera-area rate beginning Jan. 1 will be 6.3 cents per kilowatt hour, a decrease of 4.6 percent. For a typical eastern Maine home that uses 500 kilowatt hours a month, that translates to a savings of $1.52, to $31.63 a month next year .

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The standard offer is the default rate for customers who don’t sign contracts with a competitive energy provider.

The new rates are only for the energy-supply portion of electricity bills, not the distribution services provided by Emera and CMP. Under Maine’s 17-year-old electric restructuring law, utilities only distribute power; they don’t generate and sell it. Total electric bills in southern Maine will average about $83 per month, a combination of the supply and distribution charges.

“The standard offer prices set today reflect the best bids received in a very competitive auction process,” commission Chairman Mark Vannoy said in a statement. “We are pleased that some business customers will see a small decrease in their supply prices. On the other hand, the bids received for residential and small business customers result in a slight increase.”

Vannoy offered no explanation for the differences. But the bids are confidential, and although preliminary figures had been submitted weeks ago, the final rate proposals were presented only hours before the commissioners were set to decide. It’s possible, said Harry Lanphear, a spokesman for the commission, that some world event – such as Wednesday’s news that the OPEC member countries have agreed to cut oil production – led energy companies to raise the bids.

“We just don’t have a clue,” he said.

Patrick Woodcock, who directs Gov. Paul LePage’s energy office, said he was surprised that the residential bids in CMP territory didn’t mirror other customer classes. Aside from global market decisions, Woodcock speculated that homes and small businesses in southern and central Maine use more power during hours when it’s more costly to provide, and the bidders calculated that difference.

Electricity supply rates in New England are largely dependent on the wholesale cost of natural gas, which is used by power plants to generate roughly half the region’s electricity. Except in 2013 during a cold winter that caused gas prices to spike, supply rates generally have been falling for a decade. They slid from roughly 10 cents per kwh in 2007 to 6.6 cents this year.

Low prices for oil and for liquefied natural gas, which supplements the region’s pipeline supplies, also have been helping keep electric supply prices stable or extending the decline. That’s why the higher bids offered for homes and small businesses in southern and central Maine were unexpected.


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