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Maine Public Utilities Commission

NEWS RELEASE 

Maine Public Utilities Commission
242 State Street
Augusta, Maine 04333-0018

Website: http://www.maine.gov/mpuc/, Email: maine.puc@maine.gov
CONTACT: Phillip Lindley, 207.287.1598, phil.lindley@maine.gov

 


FOR IMMEDIATE RELEASE
January 25, 2006

Electric Standard Offer Prices To Increase in March for
Commercial and Industrial Customers

 

AUGUSTA, MAINE – Yesterday, the Maine PUC accepted bids for new standard offer energy prices for medium and large commercial and industrial (C&I) customers of Central Maine Power Company (CMP) and Bangor Hydro-Electric Company (BHE).  The prices are effective for a six-month term beginning March 1, 2006. 

“The market continues to punish consumers,” said Kurt Adams, Chairman of the Maine Public Utilities Commission.  For CMP customers, the new prices are, on average over the term, about 9.5 cents/kWh for the medium class and 10.2 cents/kWh for the large class.  These increases will be partially offset by reductions in CMP’s delivery charges.  On a combined basis (delivery and standard offer charges), the increase for CMP medium C&I customers will be about 8.5% and for CMP large customers about 15%.  For BHE customers the new standard offer prices, on average, are about 9.8 cents/kWh for the both classes.  The combined increases for BHE customers will be about 10% for medium and 19% for large. 

The market price increases result from continued increases in oil and natural gas, the fuels that dominate New England wholesale power market prices.  “The prices are also aggravated by serious flaws in the regional market design, which is managed by ISO New England, and regulated by the Federal Energy Regulatory Commission,” said Adams.

The names of the suppliers chosen to provide the standard offer service will be released after a two-week period to allow supply arrangements to be completed.  Under Maine’s retail electric access rules, the Commission must ensure that standard offer service is available to all customers in the State.  Maine’s rules require that the Commission solicit suppliers to provide standard offer service through a competitive bid process.    

The RFPs that resulted in the bids accepted yesterday were issued in December 2005.  The RFPs sought prices for a six-month term.  The Commission prefers a relatively short term such as six-months for these customer classes to allow standard offer prices to track market changes and, thereby, better enable other retail suppliers to compete.  The shorter term will also allow other retail suppliers to compete by offering customers longer terms with price stability.   

Standard offer service is the default supply for electricity customers, which means that customers receive it only if they have not purchased supply from another retail supplier on their own or through an aggregator.  Currently, approximately 10% of the electric load of CMP and 45% of the electric load of BHE large customers and about 65% of the load of CMP and BHE medium customers is supplied by standard offer service; the remaining customers receive their energy supply from other retail suppliers.  Even though standard offer price increases will not directly impact most large customers and a substantial amount of medium customers, they are a window on what is happening in the marketplace. 

Residential and small commercial customers of CMP and BHE, who are unaffected by today's decision, will continue to receive standard offer service at prices determined earlier this year – 8.38 cents/kWh for CMP customers and 8.71 cents/kWh for BHE customers.  The residential/small commercial prices remain in effect through February of 2007. 

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Standard Offer and Delivery Rates:

http://www.maine.gov/mpuc/industries/electricity/standard_offer/standard_offer_rates.html

All PUC News Releases may be found on our website at: http://www.maine.gov/mpuc/staying_informed/news/press_release.shtml 

To arrange an interview with Chairman Adams or Commissioners Diamond or Reishus, please contact Phillip Lindley at 207.287.1598 or by e-mail at phil.lindley@maine.gov.  The Commission’s website may be accessed through the Maine School and Library Network at all public libraries in Maine.