PORTLAND, Maine — Central Maine Power Co. said power bills for residential and small business customers are set to go up an average of $2.07 per month, starting Sept. 1.

The rate increase is the result of a decision this week from the Maine Public Utilities Commission, following months of debate as the utility pushed for ways to disconnect its revenue from the amount of power delivered to customers on its lines.

John Carroll, spokesperson for CMP, said the utility’s latest five-year rate plan will allow it to participate in state energy efficiency programs to reduce power usage without operating directly against its own financial interests.

“That was a critical determinant of how much money we would [make] any given year,” Carroll said.

He said the company expects the rate increase will bring in an additional $24 million per year, which he said will support programs like the company’s vegetation management and line inspection program.

Those programs, he said, improve the overall reliability of CMP’s system.

The increase comes through the distribution portion of the bill customers see. The per kilowatt-hour price for electricity is set separately each March when the PUC solicits bids from electricity generators to determine the standard offer price of electricity.

Carroll said the latest increase brings the total bill for the average customer about on par with the average bill in 2008. The average customer calculation assumes a customer using 525 kilowatt-hours of electricity per month.

Harry Lanphear, spokesman for the Maine Public Utilities Commission, said Thursday he couldn’t confirm the $2.07 figure as PUC staff is still calculating results of the complex rate plan approved by the PUC’s commissioners in a unanimous vote.

Lanphear said other factors beyond the terms of the approved stipulation will affect the final number and he expects that final order to be completed as early as the end of next week.

Despite the PUC decreasing the initial rate increase request in its final decision, the Maine AARP was critical of the vote, saying the organization “remain(s) very concerned about the negative impact CMP’s negotiated rate increase will have on Maine’s vulnerable populations.”

Eric Bryant, senior counsel for the Office of the Public Advocate, said the case was the result of various compromises, but that his office was pleased that CMP was willing to settle for $24 million per year compared with their original request for about $40 million.

“We knew that there was going to be some increase and we were pleased it was not as big as CMP initially wanted,” Bryant said.

CMP had earlier this month proposed an increase to the distribution portion of customers bills that would increase the average monthly payment by about $3. In the latest plan, some funds awarded to the defunct Maine Yankee nuclear power plant last year will be used to offset costs to ratepayers.

That money came to the state because electricity ratepayers have for years supported the cost of storing nuclear waste at the decommissioned Wiscasset nuclear power plant. The federal government is contractually obligated to remove the 550 metric tons of spent nuclear fuel there, but it has not.

The payments last year totaled $117.4 million to Maine Yankee’s owners, which includes CMP. Of the total payment, the PUC decided 45 percent would be used to reduce transmission and distribution rates.

Various consumer groups, and particularly solar energy advocates, became involved in the rate case early on, lobbying successfully to defeat a proposed “standby” charge for customers who generate their own power but retain a connection to CMP’s distribution system when their generation is insufficient.

Solar advocates lauded the elimination of that standby charge, opposed by a coalition including the Industrial Energy Consumers Group, which represents industrial power users including paper mills, and universities and colleges pursuing solar and other power generation projects.

The case also generated political controversy earlier this month between Gov. Paul LePage and PUC Commissioner David Littell.

In a July 10 letter, Gov. LePage questioned why Littell did not recuse himself from the proceeding for the same reason that he declared a conflict of interest in a case regarding a water rights contract between Fryeburg Water Co. and Nestle Waters.

Littell responded in a July 24 letter that he was “troubled by [the governor’s] request and this sequence of letters attempting to direct or influence whether a Commissioner at the Public Utilities Commission sits on a particular case.”

In approving the latest rate plan, regulators deferred some rate design questions, particularly a provision that would allow CMP to recover $55 million for improvements to its customer management and billing system.

Carroll said that system would be required for the utility to use dynamic pricing across its system, charging variable rates to customers for drawing power based on the demand across the system at that time.

That’s a method proposed to the PUC during the rate case by Portland-based GridSolar, which runs a pilot energy project in Boothbay that uses distributed generation of electricity on that peninsula to reduce the amount of power its residents need to transmit from farther away.

The details of that system — what it should do and how much it would cost — will now be determined in a separate proceeding before the PUC.

Darren is a Portland-based reporter for the Bangor Daily News writing about the Maine economy and business. He's interested in putting economic data in context and finding the stories behind the numbers.