Electric utility companies’ profits are under close scrutiny from ratepayers, advocacy groups and regulators these days, including in Maine. But utilities are fighting to maintain their higher returns, citing a need to attract investment to maintain reliable infrastructure, especially as climate change puts pressure on the grid.
Because these companies have monopolies over their service areas and don’t face competition, the returns they can make on their investments are regulated. Deciding how much profit is enough, however, can take months or even years of debate and litigation.
Central Maine Power’s latest distribution rate proposal, which includes bumping up the company’s return on equity, has taken center stage this year. As state regulators very publicly review that request, other regulation affecting customers’ electric bills has been happening more quietly in the background.
State and federal agencies have taken steps to try and limit profits on the transmission side. Earlier this year, the Federal Energy Regulatory Commission ordered New England transmission utilities to refund more than $1.5 billion to customers after finding that the companies’ authorized returns were set too high. The utilities are pushing back, and litigation is ongoing. More recently, Maine officials asked the federal regulator to get rid of an incentive that also boosted potential returns for utilities — and are being sued by some of the companies in response.
High-voltage transmission lines carry electricity, often over long distances, from the power plants and solar and wind farms where it’s produced to local substations. From there, smaller distribution lines carry that power to homes, businesses and wherever else it’s used. The transmission system crosses state lines and is regulated by the Federal Energy Regulatory Commission, while the distribution system within Maine is regulated by the Maine Public Utilities Commission.
Transmission owners in Maine include Central Maine Power, Versant, and their joint venture, the Maine Electric Power Company. Central Maine Power covers the southern and central parts of the state, while Versant covers eastern and northern Maine. The Maine Electric Power Company connects Maine to New Brunswick, Canada.
Back in 2011, the Maine Office of the Public Advocate and other consumer advocates complained to the Federal Energy Regulatory Commission that New England transmission line owners’ authorized return on equity, 11.14%, was unreasonably high. Return on equity is essentially the profit that companies’ shareholders receive for their investments, which allow the utilities to build and maintain their infrastructure.
After years of back and forth, the Federal Energy Regulatory Commission issued its latest opinion this March, reaffirming an earlier decision to lower this allowed return on equity to 9.57%. It ordered the transmission line owners to retroactively refund customers for the difference by May 2027.
Of the $1.5 billion total, approximately $130 million in refunds are due to customers in Maine. The average residential customer might expect roughly $20 per month over 12 months as a result, according to Heather Sanborn, the current Maine public advocate. But she cautioned that more information is needed from the companies themselves for a more precise estimate.
Central Maine Power, Versant and other New England transmission owners appealed the Federal Energy Regulatory Commission’s decision in June.
But last month, Versant went ahead and proposed a plan for refunds.
“ISO New England is coordinating the refund process, and Versant has submitted a proposed refund plan to FERC that is awaiting approval. We will be able to confirm details once FERC issues its decision. This matter applies only to Versant’s Bangor Hydro District transmission customers and does not affect Maine Public District customers,” Versant spokesperson Marissa McKay wrote in an email.
She did not say how the company’s participation in the appeal would affect the plan for refunds.
“While we’re unable to comment on ongoing legal proceedings, our focus remains on advancing customer refunds, subject to FERC approval of our proposal,” she added.
Central Maine Power also declined to comment on the ongoing litigation.
Regional cooperation
A separate move by state officials to try and lower transmission rates is also pending.
In 2025, the Maine Legislature passed a law requiring utilities to participate in the regional transmission organization ISO New England. By doing so, the companies give up significant control over their transmission infrastructure, allowing ISO New England to plan and operate the regional grid.
The utilities previously participated in ISO New England voluntarily and received a financial incentive to do so, in the form of a 0.5% “adder” to their authorized return on equity.
Last month, the Office of the Public Advocate, the Maine Public Utilities Commission and the Maine Department of Energy Resources filed a complaint asking the Federal Energy Regulatory Commission to eliminate this adder, calling it “an outdated financial perk” now that the utilities are required to join ISO New England.
Consumer advocates estimate that Maine ratepayers would save more than $2 million annually.
Versant is not opposing Maine’s request to eliminate the adder. But last week Central Maine Power and the Maine Electric Power Company filed a lawsuit against Sanborn, Philip Bartlett and Celina Cunningham, the heads of the three state agencies that filed the complaint, seeking to have Maine’s new law declared unconstitutional and prohibit state officials from enforcing it.
The companies argue that Maine is interfering with federal oversight of interstate electric transmission, writing in their complaint that the law “was passed for one reason and one reason only”: to force a change to a rate that the Federal Energy Regulatory Commission has jurisdiction over.
“The economic impact of the regulation is severe, substantially impairing Plaintiffs’ ability to obtain the full return on equity to which it is entitled and upon which it relies for investment capital to maintain and improve transmission infrastructure and ensure system reliability and undermining the economic basis of its contractual relationship with ISO-NE,” they added.
Balancing affordability and reliability
Transmission costs are just one portion of Maine ratepayers’ overall electric bills, which have increased by 72% over the past six years, according to a recent analysis from the Office of the Public Advocate. The average Central Maine Power customer’s monthly bill rose from an average of $91 in October 2020 to $157 in October 2026.
“There’s no single cause,” said Sanborn. “There’s a whole set of reasons why electric rates are rising.”
Transmission rates, driven mostly by utilities replacing aging infrastructure, are actually the smallest of those reasons. Distribution rates, especially costs from storm damage, are a bigger factor. And the energy supply itself, in particular the price of natural gas, is the biggest driver raising electric rates.
As more people switch to electric technologies such as heat pumps and electric vehicles, demand for electricity is expected to rise. At the same time, more extreme weather caused by climate change is threatening the grid’s infrastructure.
Sanborn thinks the best way to balance affordability with having a reliable grid that meets demand is to be smart about when people are using power, so additional demand is distributed throughout the day and year, and not coming during peak hours.
“Both the distribution system, the transmission system and even the supply system have to be built to support those highest use hours,” she said.
As more renewable energy comes online, using more batteries to store that power for when it’s most needed can help, Sanborn added, and prevent the need to “build and build and build in order to keep up.”
She also supports the optional “time of use” rates that both Central Maine Power and Versant offer to help incentivize customers to time their power use for lower-demand hours.
“The goal really is to use more of the system we already have,” Sanborn said, “to use it more efficiently, and to use it over more kilowatt hours of the year so that we can drive down rates.”
This story was originally published by The Maine Monitor, a nonprofit and nonpartisan news organization. To get regular coverage from The Monitor, sign up for a free Monitor newsletter here.