Versant Power said Monday that it has agreed to delay half of its next rate increase until January and is asking regulators to approve it.
The so-called stipulation, arrived at after four meetings in April and May, aims to mitigate the impact of Versant’s distribution rate request. It would put the distribution rate increase two steps — one in July and one in January 2024 — in an effort to mitigate the electricity sticker shock.
“The settlement provides a significant benefit to customers by deferring half of the increase until January,” Andrew Landry, Maine’s deputy public advocate, said.
January is when Landry said he is anticipating a meaningful decrease in standard offer supply rates as well as competitive supply rates due to the recent drop in worldwide natural gas prices. Standard offer rates are set by the commission using a competitive bidding process.
The settlement calls for an increase of about $15 million on July 1 and another $15 million increase on Jan. 1, 2024. That translates into a total overall bill increase of about 4 percent for each of the steps for Versant customers, or about $5 per month for the average residential customer using 500 kilowatt hours per month, with another $5 added for the second step.
Versant is asking that the commission approve the stipulation agreement. The distribution rate is one part of the electric bill that is regulated by the Maine Public Utilities Commission. Last September, it asked the commission to increase its distribution rate about $12 per hour for an average residential customer using 500 kilowatt hours per month.
The request comes at a time when electricity rates, fueled by high natural gas prices, already are straining Mainers’ wallets.
The majority of Versant Power customers who buy their home electricity through the state’s standard offer price already saw about a 40.7 percent increase in supply rates in January. CMP also hiked its supply rates in January by about 60 percent. Those rates are set by the commission after a competitive bidding process and don’t involve the utilities.
Landry said a major reason the rate hike request was agreed upon is its planned capital investments. They include replacing its metering system and deteriorating cables on islands off the coast of Maine. It also plans to build a new substation in Machias and improve reliability in the Orono area.
Versant submitted its request to raise the distribution rates after a stipulation agreement with the Office of the Public Advocate, AARP Maine, Efficiency Maine Trust, the Aroostook Energy Association and Walmart Inc.
CMP is scheduled to hold a settlement conference with the commission on Tuesday.
Correction: The story has been updated to clarify the month of the rate increase.