Home and small-business customers served by Central Maine Power who buy electricity through the state’s standard offer just dodged a bullet: Beginning in March, their rates will actually go down, rather than up as state energy officials had feared.

The unexpected gift comes after the Public Utilities Commission decided Tuesday to accept two bids for standard-offer service that will lead to a 13.4 percent drop in electric supply rates, from 7.56 cents per kilowatt hour to 6.54 cents in March. The new standard-offer rate – the default for consumers who don’t shop for electricity – will cover a 10-month period ending Dec. 31.

For the average home customer served by CMP who uses 540 kilowatt hours a month, every decrease of 1 cent per kilowatt hour slices $5.40 a month from the bill.

Credit for the rate decrease likely goes to the continuing and confounding plunge in crude oil prices. Oil’s collapse has had the effect of tugging down futures prices in the wholesale power market.

“This was entirely unexpected and seems to be the product of fortuitous timing,” said Tim Schneider, the state’s public advocate. “If we had done the standard offer two months ago, we’d be paying higher prices. Based on what we’ve seen this winter, we got real lucky.”


In October, Schneider and other state energy officials warned midsized business customers that their rates would soar this month by up to 130 percent. They blamed the steep rise on wholesale prices for natural gas, which fuels half the electricity generation in New England. That increase already is happening for some businesses, driven by a lack of gas pipeline capacity in the region, which makes supplies tight when demand is high on cold days.

But this spring, midsized businesses with standard-offer service will catch a break, too. The PUC accepted bids Tuesday for energy supply that will lower rates for a 10-month period, beginning in May. The rates change each month for businesses, but will average 6.44 cents per kilowatt hour over the term. They will vary from 5.21 cents in May to 9.50 cents in December, the PUC said.

The pending rate changes will affect home and business customers who get their electricity supply via the standard offer – those who don’t sign contracts with a competitive energy supplier. That covers roughly 70 percent of CMP home customers, according to PUC figures.

The change is only for the energy-supply portion of electricity bills, not the distribution services provided by CMP. For homeowners, the monthly bill is split roughly in half between energy and distribution costs.

Consumers who shopped for electricity and locked into rates in the fall are likely paying much more than the standard-offer plan.

For instance: Electricity Maine is the state’s largest competitive provider. The rate advertised Tuesday for the company’s MaineStrong product, which is locked in for 24 months, was 11.39 cents per kilowatt hour.

“Electricity rates are expected to rise in New England over the next two to three years,” the company said on its website. “Protect yourself with this rate – get through two winters and summers when prices are highest.”

The drop in the standard offer rates suggests that competitive providers will be adjusting their pricing, too.

To compare the costs of competitive providers and the standard offer, check out a chart on the website of the Maine Public Advocate’s Office.

On Wednesday, the PUC will consider bids for home and small-business customers in Emera Maine’s Bangor service area.

It’s too soon to say how electric rates will trend next winter, but Schneider noted that futures prices for wholesale electricity for next January are much lower than what experts had been projecting.


Lower electric rates are especially welcomed by older Maine residents on a fixed income, said Lori Parham, state director of AARP Maine. One-third of Mainers over 65 years old rely on Social Security, she said, which averages $1,000 a month. Coming in tandem with gasoline prices that have fallen below $2 at some stations, the impact is meaningful.

“This is good news for Maine consumers,” she said. “I am surprised. Given the conversation and what we’ve been following in the news, we had concerns the rates would increase. We’re pleased to see this is one more place consumers will get relief, as we manage through a cold winter.”

Falling electric rates are a relief for Ellen Harris-Howard, who lives in a mobile home in Lebanon. A retired nursing director, she and her spouse rely on Social Security and pay their electric bills on a monthly budget plan of $125 a month.

“That’s just a blessing for us,” she said.

Harris-Howard has taken steps to use less electricity. She has replaced incandescent bulbs with efficient LEDs and buys energy-efficient appliances. Paying more for electricity this year would have meant a reduction in other spending.

The turnaround in electric rates is stunning, because some businesses in Maine, and a wide range of customers in New Hampshire and Massachusetts, already are struggling with big jumps this winter.


The trigger was the high cost of natural gas delivered to New England. On average, half of the electricity in the region is generated by natural gas-fired power plants.

Energy experts blame the region’s inadequate pipeline network, which can’t move enough gas from new fields in Pennsylvania, especially when demand at power plants, homes and factories peaks. That has caused wholesale natural gas prices to spike during periods of severe cold, such as the subzero temperatures experienced across New England last week. It has forced the region’s grid operator, ISO-New England, to make backup plans to bring on more power plants that burn oil and coal.

Oil continues to play a critical role on the coldest days. Last Thursday, for instance, the share of power generation from plants relying on fuel oil rose to 9 percent, more than twice the typical share. Also, to help supplement the supply of domestic gas, a tanker of imported, liquefied natural gas called last week at the GDF Suez terminal in Boston Harbor.

This week, coal-fired power plants helped take up the slack. On Tuesday, when morning temperatures were in the teens in Boston, data from ISO-New England showed coal plants were producing 10 percent of the region’s power. Forty-four percent of the power was coming from natural gas-fired plants; nuclear power was contributing 27 percent; renewables, such as biomass, were 8 percent; hydro was 6 percent; and oil was 4 percent.

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