Electricity prices for most Mainers will increase by about $30 a month next year because of big increases in natural gas prices. Credit: Troy R. Bennett / BDN

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Electricity prices for most Maine residents will rise by about $30 a month under rate increases set this week by the Maine Public Utilities Commission. The rate increases come on top of rising prices for heating, gasoline, food, cars and many other consumer goods, many of which are also in short supply because of transportation and other supply chain problems.

After the PUC announced the big price increases for the upcoming year, state officials encouraged Maine residents to conserve electricity — through efficiency updates and weatherization, for example — and to reach out for assistance if they need help paying their energy bills.

While Mainers should do these things, and additional help is available this year thanks to federal pandemic financial relief, this is cold comfort to those who will still struggle to pay their bills.

Unfortunately, there are no quick, simple answers to rising energy prices. But, these big rate increases should spur conversations — and hopefully, action — to change the state’s energy mix. Reconsideration of how electricity prices are set should also be on the table.

Rising electricity costs, like higher heating oil and gasoline prices, are the result of supply and demand. Early in the pandemic last year, when governments around the world imposed restrictions to slow the spread of coronavirus, demand for fuels for transportation and manufacturing plummeted, as did prices. In April 2020, demand for oil was so low that petroleum futures were briefly traded at negative prices.

As pandemic-related restrictions have largely been lifted and economic activity recovers, demand for fuels, particularly natural gas, is high around the world. Globally, supply has not kept pace with this increased demand, so prices have increased, rapidly. Natural gas prices in New England have more than tripled since last September, according to data from ISO New England, which operates the region’s electrical grid.

Maine, and the rest of New England, are highly dependent on natural gas to generate electricity. So, when natural gas prices are high, they can drive up electricity rates, which is what happened this week when the PUC selected bids to supply electricity to most Maine customers for the upcoming year.

Residential customers who buy standard offer electricity from Versant, which serves most of Penobscot County as well as Hancock, Piscataquis and Washington counties, will see an 89 percent increase in their power supply rate, beginning in January.

Standard offer rates for customers of Central Maine Power, which services much of southern and midcoast Maine, will rise by 83 percent.

Commercial and industrial customers of both utilities will also see significant rate increases next year.

Nearly all residential utility customers pay the standard offer rate, which is set by the PUC when it selects bids to provide electricity for the upcoming year. Customers can choose to buy electricity from what are called competitive electricity providers, which may offer lower prices. The Maine Office of the Public Advocate has a list of these providers, and their current rates and contract terms, on its website.

An electricity bill includes two components, electricity supply and delivery. The electricity supply rate is set by the competitive bidding process required by Maine law.

Staggering bids — setting prices for only a portion of the needed electricity supply at one time, which the PUC did in the past — could help spread out price increases. But the bottom line is that higher input fuel prices translate into higher electricity prices.

Increasing supply from renewable sources is a big part of the solution. Rather than buying fossil fuels from other states and countries, Maine and New England should generate more electricity from wind, solar and hydroelectric facilities, which also pollute less than fossil fuel-burning generators. The amount of electricity produced by renewable sources is growing in New England, but too slowly to meet demand.

The New England Clean Energy Connect, the 150-mile transmission line across Maine that was rejected by voters earlier this month, pledges to bring 1,200 megawatts of hydropower from Quebec into the New England electric grid. The corridor, which is now the subject of competing  legal claims, wouldn’t have helped reduce electricity prices this winter, but projects like it will be necessary to meet both energy demand and climate change targets moving forward.

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The BDN Editorial Board

The Bangor Daily News editorial board members are Publisher Richard J. Warren, Editorial Page Editor Susan Young, Assistant Editorial Page Editor Matt Junker and BDN President Todd Benoit. Young has worked...