Regulators on Tuesday approved Central Maine Power’s request for a rate hike.
That rate hike, part of a settlement reached with the Office of the Public Advocate, AARP Maine, the Efficiency Maine Trust and others, will be staggered over the next three years, the Maine Public Utilities Commission said.
CMP’s average residential customers will see about a 1 percent increase, or about $1.25, in the distribution portion of their monthly bill starting July 1, 2023. That will be followed by increases effective Jan. 1, 2024, July 1, 2024, and Jan. 1, 2025, for a total monthly increase of $5 over that two-year period, according to the commission.
The payment scheme is similar to one agreed to by Versant in mid-May that delayed half of its distribution rate increase until January 2024. That increase was approved by the utilities commission last week.
“This settlement is significantly lower than the initial $98 million that CMP requested and really balances the impact on CMP customers with the need to invest in the electric grid to meet reliability needs and Maine’s clean-energy goals,” Commission Chair Philip Bartlett said. “It also incorporates the strictest service quality standards we have ever seen in a rate case, with built-in penalties. Both the Commission and CMP customers have been demanding better reliability and we believe this is the best way to achieve that.”
CMP said the rate hike is necessary to cover investments meant to minimize outages during storms, clean vegetation from power lines and upgrade aging infrastructure, as well as meet its clean energy goals.
“We know Mainers are feeling the impact of high costs. This plan is designed to minimize the impact to our customers and create rate stability while allowing us to continue making critical reliability investments to our electric grid,” said Jon Breed, spokesperson for CMP.
That rate hike follows earlier increases to both the standard offer for electricity supply (26 percent), set by the utilities commission under a competitive bidding process, and for stranded costs (7 percent). The standard offer rate hike was effective Jan. 1 and through the end of the year, accounting for a $29 monthly increase for the average residential customer. The stranded costs rate hike accounted for a $9.02 increase for the average residential customer’s monthly bill.
Under the settlement approved Tuesday, CMP could be fined as much as $8.8 million annually if it fails to meet certain standards for the frequency and duration of outages, call answering metrics, billing accuracy and the effectiveness of a new automation program, according to the utilities commission.
CMP has been harshly criticized by ratepayers since a major windstorm in October 2017 led to the worst outage event in Maine history and a botched cutover of a new billing system at the same time. Both CMP and Versant have ranked at the bottom of J.D. Power customer satisfaction surveys for the past several years.
Lucy Hochschartner, a spokesperson for Pine Tree Power, a coalition pushing to replace CMP and Versant with a locally owned company, blasted the rate hike Tuesday, saying, “Mainers cannot afford any additional rate increases while supply costs continue to go through the roof.”