The Maine Public Utilities Commission approved an agreement on Wednesday that marks the expiration of two large power purchase contracts and reduces stranded costs for Central Maine Power customers. The change will be reflected in customer bills on July 1.
"This is the end of an era and good news for Central Maine Power ratepayers," Commission Chairman Mark Vannoy said inan announcement of the agreement.
The last two largest long-term power contracts under the federal law known as the Public Utility Regulatory Policies Act of 1978 expired at the end of 2016. PURPA was created during the energy crisis of the 1970s and was intended to promote greater use of domestic energy and renewable energy.
"The long-term PURPA contracts signed in the 1980s and 1990s ended up being much more expensive than current market rates" said Vannoy.
In its updated filing of Dec. 6, 2016, CMP estimated an overall stranded cost price decrease of $56.6 million, or a reduction of 189% from current stranded cost rates.
The commission approved passing along these savings to customers.
"My fellow commissioners and I were especially pleased to see the Industrial Energy Consumers Group, the Office of the Public Advocate, commission staff and the utility all agree on this approach," Vannoy stated. "Providing rate relief as quickly as possible to benefit the people and businesses of Maine is something all the Commissioners support."
The agreement is part of a more extensivestranded cost case that establishes CMP's annual revenue requirements for the three-year period beginning March 1. Stranded costs and related ongoing long-term procurement obligation costs represent one piece of CMP's overall transmission and distribution rate.
The agreement defers the actual stranded cost price change to July 1.
In addition to the reduction in power purchase payments from contracts that expired in December 2016, the agreement included dissolution of a spent fuel trust fund and other Maine Yankee-related expenses.
The PUC stated the spent fuel trust fund proceeds of $21.5 million will be reimbursed to customers as a one-time reduction resulting in a larger reduction for the first year of the three-year cycle.
Additional reductions in all three years are directly tied to the expiration of the PURPA long-term agreements.
Going forward, similar three-year stranded cost cases will no longer include the legacy PURPA contracts and will be limited to newer long-term procurement obligations entered into by Maine's utilities.
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