Sunday, March 9, 2014
The Maine Public Utilities Commission has reached an agreement that requires Electricity Maine LLC, the state's largest competitive electricity provider, to notify some of its home and small-business customers that they may be paying higher-than-expected rates for power.
Auburn-based Electricity Maine agreed to send a letter to customers who enrolled or renewed service between Jan. 1 and April 30 of this year. The letter had to spell out their current rate and terms of service as well as the current standard offer rate and expiration date. It also had to give customers the no-cost option to switch to standard offer service, with at least 21 days to decide.
The agreement is meant to clear up any confusion that customers may have about what they are paying for their electricity supply.
Last spring, the PUC began looking into whether Electricity Maine was using false or misleading advertising to attract and keep customers by giving the impression that it had the lowest rates. No improper practices were found during what the agency characterized as a request for information, not a formal investigation.
Electricity Maine's president said Monday that the company sent the letter a week or so ago and that it generated "little concern" among customers. In an email, Kevin Dean said that 40 to 50 customers called to switch to other plans or the standard offer.
The company's website indicates that it has a total of 200,000 customers in Maine, but Dean didn't respond to a request from the Press Herald for the latest tally, a copy of the letter, or an estimate of how many people received it.
In a larger sense, the agreement highlights why residents should keep track of changes in electricity supply rates. Roughly four in 10 Central Maine Power Co. customers are getting their electricity from a source other than the standard offer, which is the default service for people who don't pick a supplier.
More than a half-dozen companies licensed today with the PUC are competitive energy providers for homes and small businesses. Each provider has rates and special offers that can change at any time.
"The larger lesson for customers is to do their best to determine what they are signing up for," said Eric Bryant, senior counsel at the Maine Office of Public Advocate.
Byrant's office maintains a Web page -- www.maine.gov/meopa/utilities/electric/supply.html -- that helps consumers compare electricity providers.
But the market is largely unregulated. Even the public advocate has been unable to determine the terms and conditions of one provider, and the website's rates for Electricity Maine are out of date. That's why the page is best used as a guide, Bryant said, to pursue the latest information on each provider's website.
Electricity Maine initially grew by offering rates that undercut the standard offer. The difference allowed a typical customer last fall to save $1.50 or so a month.
But in March, the PUC-approved standard offer rate went down. It's now 6.8 cents per kilowatt-hour for CMP customers, and will be in effect until next March. By comparison, leading rate plans offered last spring by Electricity Maine were roughly a penny per kilowatt-hour more expensive.
That comparison may be meaningless by next spring, however, when standard offer rates change again. Power costs are rising as prices for natural gas, used for electricity generation, rebound from record lows. So it's likely the standard offer rate will increase, too.
Dean said contrasting the current standard offer with Electricity Maine's long-term rates is an "apples to oranges comparison."
Meanwhile, Electricity Maine's focus has been changing. It had moved from promoting the lowest rates to a business model that offers stable, longer-term rates from a local company that supports the community.
That model is evident today on the company's website. It offers two rate plans: One called MaineSafe is good for a year and is fixed at 7.98 cents per kwh. The other is called MaineStrong; it's good for two years and is set at 8.49 cents. Both plans donate 2 percent of the revenue to local nonprofit groups, such as the Good Shepherd Food-Bank and Preble Street Resource Center, that fight hunger, homelessness and other social problems.
Dean said the company also is developing a new campaign that will greatly expand the local charities and causes that Electricity Maine supports. He said the reaction to the PUC-ordered letter shows that customers value longer-term, predictable rates, coupled with the community contributions.
"The more interesting fact," he said, "is that most of these customers that contacted Electricity Maine chose to stay with MaineStrong or MaineSafe rates that help local charities and protect against future increases."
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