Everybody thinks that their electric utility bill is too high.

That is true in Washington state, where electric utility customers pay about 7 cents per kilowatt-hour for electricity. It is true in Hawaii, where electric utility customers pay about 34 cents per kwh for electricity.

It is also true in New England, which has average electric utility rates that are among the highest in the United States. New England’s average electric rates range from about 12.5 to 16 cents per kwh – with Maine’s average rates the lowest, at about 12.5 cents per kwh.

Mainers, no doubt, think that the electric utility bills that they pay are too high. Fair enough. Electric utility service is not cheap, although it is still a good bargain. While going “off the grid” may become more feasible during the next several years, interconnection with the electric utility grid connects most Americans to the modern world. Electricity gives citizens and businesses access to the things that – for better or worse – make modern life possible.

Electric utility rates have, on average, gone up by about 35 percent in Maine since 1997. Between 1997 and 2014, the only states that saw aggregate electric utility rate increases that were less than Maine’s were Illinois, Arkansas, Pennsylvania, New Hampshire and New Jersey. Note that, like Maine, four out of five of these states restructured their electric utility industry between 1997 and 2001 to embrace competition in the generation of electricity.

The 14 states that chose to restructure their electric utility industry to better accommodate wholesale and retail competition did so because the then-current situation had become untenable.

During the 1980s, for example, Maine’s electric utilities had signed power purchase contracts with qualifying facilities – entities that an electric utility is federally mandated to buy from – partly to replace capacity that would otherwise have been provided by the Seabrook nuclear plant in New Hampshire.

These qualifying-facility contracts soon became uneconomic. By the mid to late 1990s, traditional electric utility regulation had become unworkable in Maine, and policymakers decided to make dramatic changes to accommodate competition in electricity. As part of this process, policymakers had to deal with the legacy costs associated with going from traditional regulation to competition in the generation of electricity.

Competition in electricity has worked out pretty well. It hasn’t been easy – Maine is a long way from fossil fuel resources like natural gas, oil and coal, and therefore has chosen to rely on renewable resources to an unusually large extent.

Also, retail competition in electricity is essentially irreversible – Maine’s electric utilities divested their generation in the early 2000s. Unlike Quebec, Maine does not have the massive, publicly financed dams that make Quebec’s rates the lowest in Canada. Still, progress has been made.

In 2014, Maine’s electricity rates were the lowest in New England. That was definitely not the case in the 1990s. Electric rate comparisons are readily available on the Maine Public Utility Commission’s website.

Maine’s industrial customers paid, on average, 8.14 cents per kwh for electricity in 2014, compared to 10 cents per kwh in Vermont and 11 to 12 cents per kwh in the other New England states.

However, over 90 percent of Maine’s industrial customers, over 60 percent of the state’s commercial customers and over 20 percent of residential customers here have switched to competitive providers – and it’s not possible to know how much they are saving (or not saving) by doing so.

Residential customers in Maine paid, on average, about 16 cents per kwh in 2014, compared to 20 cents per kwh in Connecticut, about 18 cents in Massachusetts and New Hampshire, and about 17 cents per kwh in Rhode Island and Vermont.

It is true that Maine’s standard offer rate – the default for consumers who don’t shop for electricity – goes up and down, down by about 13 to 14 percent most recently. Maine is not immune from global market forces in energy.

Going forward, it probably makes sense for Maine to rely on a mix of new and existing generating resources. Natural gas is a great resource option as long as there is sufficient gas pipeline capacity available, but renewables can make sense as well. The challenge is to find the best balance of available generating resources at a reasonable cost.

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