AUGUSTA — Central Maine Power has begun the process of applying for a rate increase before the Maine Public Utilities Commission, saying it spent $26.5 million more than was budgeted to cover the cost of repairs for damage caused by five major storms last year.
The company submitted the cost estimate to the PUC as part of its annual filing that will help regulators determine if the utility is due a rate increase in July. The cost of the storm repairs alone would lead to a rate increase of more than 9 percent. CMP is proposing that the cost be spread out over three years to minimize the impact.
The tab for repairs is just part of the annual rate-setting process for CMP. Over the next few months, CMP will be submitting other revenue and cost information to the PUC, which will determine if electric rates should rise and, if so, by how much. In addition to storm costs, the company also submits information on how much it costs to transmit the electricity, how much the utility contributes to low-income assistance programs and the Efficiency Maine Trust and revenue decoupling, a method of encouraging the efficient operation of the utility.
Catharine Hartnett, a spokeswoman for CMP, cautioned customers that a rate increase, if any, won’t be determined until all those figures are in. For instance, transmission costs aren’t typically submitted to the PUC until June.
Storm costs, she said, “are just one small component” of the rate-setting, she said, and to forecast now how much rates might rise is “extremely premature.”
Five major storms last year hit the central and southern part of Maine where CMP’s operations are based. It was an “unusually intense” year for storms, with major storms in April, August, September, November and December, Hartnett said, and the worst was the April storm.
A combination of heavy wet snow and high winds knocked out power to more than 260,000 customers, she said. When a storm hits, CMP has to pay overtime to its workers, replace equipment and also pay the costs associated with bringing in utility workers from other states to help get the power back on.
“When storms hit and outages occur, customers have made it very clear they want their power restored as swiftly as possible,” Hartnett said. “CMP must balance our commitment to rapid and efficient storm response with the costs incurred to manage storm recovery promptly.”
State Rep. Seth Berry, D-Bowdoinham, said the bill for storm damage shows that the ratepayers, not investors, are ultimately left holding the tab for most utility bills.
“What we’re seeing here is the absolute fallacy of the ‘investors take the risk’ myth,” he said.
Berry favors a publicly owned utility rather than privately owned electricity distribution companies.
When any high costs are incurred, he said, ratepayers “serve as their (utilities’) insurance … (because) we’re paying this guaranteed profit.”
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