September 18, 2012

Gulf getting into Maine electricity business

Gulf Electricity will compete with Electricity Maine, the Auburn power supplier and FairPoint Energy, a subsidiary of the telephone company.

By Tux Turkel
Staff Writer

Better known for its gasoline stations, Gulf Oil is getting into the electricity business in Maine.

click image to enlarge

Over the next several months, Mainers will have new options that can marginally lower their electric bills, as well as signal their support for wind, hydro and other green-power generators.

Gordon Chibroski / Staff Photographer

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Comparing Maine Electricity Supply Costs

(Assumes Central Maine Power home customer using 521 kilowatt hours a month, which is the average residential power consumption, according to the Maine Public Utilities Commission.)

Maine Public Utilities Commission standard offer: $38.55
Electricity Maine: $36.99
Gulf Electricity: $36.41
Maine Green Power: $46.05

Source: Portland Press Herald research

Nearly 12 years after Maine deregulated its electric industry, a competitive market finally is emerging for home and small-business customers to choose power providers based on overall rates, time-of-use pricing or their commitment to renewable energy.

Over the next several months, Mainers will have new options that can marginally lower their electric bills, as well as signal their support for wind, hydro and other green-power generators.

Competition is heating up with news that Gulf, the Framingham, Mass.-based motor fuels supplier and operator of Cumberland Farms convenience stores, is launching Gulf Electricity in Maine. Gulf Electricity began operating earlier this year in Connecticut, part of Gulf Oil's transition to a diversified energy provider.

"Not a lot of people know we're in the electricity business," Rick Dery, Gulf's senior vice president and chief marketing officer, told the Portland Press Herald.

Gulf will compete head-on with at least two notable providers: FairPoint Energy, a subsidiary of northern New England's dominant telephone company, and Electricity Maine, the Auburn power supplier that has attracted more than 150,000 customers since starting up more than a year ago.

FairPoint Energy is offering an introductory deal that guarantees a 10 percent savings in the first year. It's primary plan then features a variable rate that can change month to month. FairPoint also is offering a green energy option, a variable rate that supports Maine wind power generators.

Electricity Maine has grown by offering rates that have ranged from 5 percent to 17 percent below the state's standard-offer supply charges for Central Maine Power Co.'s home customers. Roughly one-quarter of all CMP home customers have left the standard offer for Electricity Maine, state figures show.

These companies are competing in a market in which wholesale electricity costs have been falling faster than standard-offer charges, which change each March. That gives them room to sell power at a small discount and still make a profit.

Based on current fixed rates and charges, it also gives residents a chance to save a little money on their bills. But for now, it will be hard to compare Gulf and Electricity Maine on price: They are within pennies of each other.

Calculations by the Press Herald show that -- compared to the standard offer -- Gulf and Electricity Maine are virtually on par. An average home today that uses 521 kilowatt hours a month will cut 6 percent from its energy supply bill with Gulf Electricity and 5 percent with Electricity Maine.

Those savings add up to roughly $2.14 a month with Gulf and $1.56 a month with Electricity Maine. For reference, a home in CMP's territory that uses 521 kilowatt hours a month pays $38.55 now for its standard-offer electric supply.

This figure doesn't include CMP's delivery charge. When that's included, the average, total home bill is roughly $75 a month.

It's not clear how long this period of declining or stable wholesale costs will last, according to Tom Welch, chairman of the Maine Public Utilities Commission, or where the new standard-offer charge will stand next March. But the entry of a second competitive supplier in Maine for home customers will create pressure to keep retail rates as low as possible, he said.

"I'm always happy to see companies interested in the Maine market," Welch said.

In addition, the PUC recently approved a new green power supply option for Mainers, and is requesting proposals for a program that will give home customers a discount when they use power at night and other times when demand is low.

(Continued on page 2)

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