Central Maine Power Co. notified regulators Thursday that it would ask to raise distribution rates to cover a $570 million reliability improvement plan that could create up to 85 new jobs over three years, but the plan quickly met with strong opposition from the governor and public advocate.
An average CMP customer would pay $5 per month more in the first year of the plan, bringing the average bill for a home using 550 kilowatt hours of electricity to $131 per month. The rate would go up $2.5o per month in each of the following two years of the plan, bringing the rate in the third year to $136 per month.
CMP is asking the Maine Public Utilities Commission to approve its plan and to allow the rate hike to go into effect in the third quarter of 2023.
The utility hopes to improve its poor reputation for reliability and add automation to its network to handle higher demands on the grid as more people draw on it to power electric vehicles, heat pumps and other devices, Joseph Purington, CMP’s CEO, said.
“We are creating predictable rates over the next three years so that the electricity distribution prices, the part of the bill over which CMP has complete control, is a more stable component of everybody’s energy wallet,” Purington said.
The idea sparked backlash from political figures. Gov. Janet Mills said Mainers are already struggling with sky high costs from record inflation. She asked CMP to refrain from asking for the rate hike and threatened to call on her energy office to intervene to oppose it and the utilities commission to reject it.
“There is simply no way that increasing folks’ electricity bills right now can be considered just and reasonable,” she said in a statement. “I will fight this.”
Former Gov. Paul LePage, the Republican running against the Democratic governor in November, issued a statement calling the CMP proposal “frankly unacceptable” with Mainers “already struggling to pay their electric bills” and criticized Mills’ energy record.
Public Advocate William Harwood said his office would carefully examine the details of CMP’s request to identify underlying costs that are out of line and offer an alternative recommendation to the commission.
The CMP plan includes installing more durable poles that are four inches wider than existing poles and coated wire to withstand the more volatile and intense storms created by climate change. CMP plans to install thousands of smart switches, which can be controlled remotely to switch power to customers affected by an outage. It also would be more comprehensive in trimming trees, which are the major cause of outages.
The proposed distribution rate hike comes after the regulators approved sharp increases effective in January to the standard offer supply rate, a default rate for those who do not buy electricity from a third party, for both CMP and Versant Power.
That increase added about $30 per month total to the average residential bill for customers of both utilities to raise a CMP bill to $126 per month for 550 kilowatt hours of usage and a Versant customer to $131 per month. Those increases started on Jan. 1 and will run through the end of this year.
The January rate hikes prompted regulators in February to approve a one-time, $90 electricity bill credit for about 90,000 low-income customers of CMP and Versant to help offset the higher rates. The spike came as prices for the natural gas that powers New England’s energy grid rose sharply.
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, not by the electric companies. CMP and Versant have full control over the delivery rate.
CMP has come under fire for poor performance and reliability since a wind storm in October 2017 that knocked out power for some customers for up to a week and for errors at that time that corresponded to the installation of a new billing system. The commission’s penalty for that cost CMP shareholders an estimated $10 million in reduced earnings, the highest penalty ever imposed by the commission, but it was lifted in February.
The company is still struggling to regain customer confidence and improve its reputation, two factors that helped lead to a referendum win last November for those opposed to its $1 billion hydropower corridor. Also nipping at its heels are national utility performance surveys, including one from J.D. Power that ranked CMP last for the f ourth year in a row for residential customer satisfaction for electric utilities.
The new plan, called Powering Maine, will help Maine meet its climate change goals and improve the electric grid, Purington said. It will be rolled out regionally starting in southern Maine.
The added automation will let CMP operate the grid remotely and restore power more quickly to customers. The plan includes upgrades to help prevent flooding at substations. The company will add details to the plan over the next two months and file them with the utility commission over the summer.
Purington said the improvements to the electric grid could help minimize annual energy costs over time. The plan will have regular reliability measures to determine the frequency and duration of outages.
“We plan to make important distribution system automation upgrades that allow us to minimize the number of customers impacted by each outage, enable faster power restoration and continue to replace aging grid components like poles and wires,” Purington said.