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August 12, 2022

CMP's request to hike electricity rates leads to questions, concerns

devices FILE PHOTO Central Maine Power Co. this week filed a formal request with the PUC to increase its distribution rate by 30%.

Central Maine Power Co.’s request to increase its distribution rate by 30% is drawing ire from state politicians and consumer advocates.

“CMP pursuing this filing at this time is not in the best interests of Maine people, and we oppose it,” Gov. Janet Mills said in a news release Thursday.

Public Advocate William Harwood said his office will oppose the request.

“At a time when Maine consumers are struggling with rising costs, a proposed CMP rate increase of 30% will add to their financial misery,” Harwood said in a separate release.

CMP announced its plan in May to ask state utility regulators to approve a power grid upgrade along with a rate increase to pay for it. 

The utility filed a formal request with the Maine Public Utilities Commission on Thursday.

Rates are proposed to go into effect mid-2023.

CMP said the proposed three-year plan, which is calls “Powering Maine,” will maintain price predictability for customers, improve the delivery of reliable power, support more efficient storm restoration response, reduce the impacts of outages, offer more tools to customers to monitor and manage their energy usage, and enable greater adoption of renewable energy onto the grid. 

“We understand that energy prices across the board are challenging Mainers right now,” said Joseph Purington, president and CEO of CMP. “Our goal is to invest in the system to improve reliability for customers and minimize outage impacts when they occur. At the same time, we want to keep the CMP portion of our customers’ energy wallets, which does not include electricity supply costs, predictable over the next few years.”

The plan proposes a rate structure that would add approximately $5 per month to the average residential customer bill the first year, $2.78 in the second year and $2.33 the third.

According to CMP, the increase would fund investments that would include the replacement of aging poles with larger, more durable poles and bare wire with covered wire. Both would better withstand storm impacts such as falling trees and limbs that damage the infrastructure, the company said.

Additional investments include:

  • Ongoing installation of automated switches to manage power outages remotely and reduce maintenance expense.
  • More digital tools to understand and manage energy usage and accounts, and to receive usage updates and storm outage information electronically.
  • Staging contractor personnel regionally for storm support.
  • Better enabling the interconnection of solar, storage and other renewable energy resources.

“CMP must continue to balance the needs for predictable costs with the smart system updates that improve reliability now and that enable our company to successfully perform its role in helping Maine meet its climate change goals,” Purington said. 

At Mills’s direction, the Governor’s Energy Office intervened in opposition to CMP’s filing, which would raise electric bills on average residential ratepayers in Maine by approximately $10 per month, or $120 year. 

“While improving our electric system is critical to ensuring a strong grid, the timing of these costs must be balanced against the high costs — including already high energy prices — that are hurting Maine people and businesses right now,” said Mills.

Mills has said she will also direct the Governor’s Energy Office to oppose a potential forthcoming filing from Versant Power. That electric utility, Maine's second-largest after CMP, recently announced that it intends to seek an increase of $10.50 per month — or about $126 a year — from the average residential ratepayer, starting in the summer of 2023.

Harwood said the proposed increase is a dramatic departure from traditional ratemaking.

According to Harwood, CMP’s phased rate increases are proposed to cover costs that it expects to incur in the future but which cannot be verified today and which it might never actually incur. Under a traditional system, rate increases are based on actual costs recently incurred, adjusted solely for “known and measurable” changes expected in the first year the rate increase goes into effect. 

“We will be paying close attention, looking for costs that primarily benefit shareholders and not ratepayers,” he said.

Ratepayers, he added, “should not be forced to prepay for future services.”

Our Power Executive Director Andrew Blunt and senior advisor Seth Berry, longtime House chair of the Maine Legislature's Joint Standing Committee on Energy, Utilities and Technology, hailed Mills’ decision to intervene in the case.

"Today, many of Maine's consumer-owned utility customers pay half as much for their electricity as the captive Maine customers of Versant and CMP, '' said Berry. “These Mainers in 97 towns have real energy sovereignty, fewer outages, and can more easily afford to switch to EVs and heat pumps."

Our Power is a coalition of Maine ratepayers, business leaders, energy experts and conservationists that advocates for consumer-owned utilities.

Versant last received a delivery rate hike of 17.5% in November of 2021. CMP last received a hike of 11.5% in August 2021. Supply costs have also increased dramatically, especially for Versant and CMP.

CMP, a subsidiary of AVANGRID Inc., is Maine’s largest electricity transmission and distribution utility. It serves approximately 646,000 customers across 346 communities in central and southern Maine and operates approximately 23,500 miles of distribution lines and 2,900 miles of transmission lines. Over the last decade, the company has invested approximately $3.5 billion in Maine system infrastructure.   

AVANGRID (NYSE: AGR) is headquartered in Orange, Conn., and operates in 24 states.

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