New Electricity Rates

Dear Neighbor,

I write to you today because you will likely notice an increase in your electricity bill at the end of this month. That is because as of March 1, a new standard offer rate of 7.6 cents per kilowatt-hour went into effect.  This is a 10.8 percent increase from last year's standard offer price.

This increase is a result of the lack of natural gas pipeline capacity coming into New England.  Natural gas is the dominant fuel source used to generate electricity in New England and becomes increasingly expensive as we simultaneously increase our use of natural gas for heating fuel.  It is important to understand that the cost of natural gas is still low as it comes out of Pennsylvania and New York.  Because of legislation that originated in the Maine Legislature's Energy Committee last year, the New England governors are now working together to solve this problem in the coming years.   

Given that, I wanted to share some information that will help you understand electricity service in Maine and the industry structure.  Hopefully, this will put you on the path to being more in control of your electricity costs.

  

You will notice that your electric service is made up of two parts: supply and delivery.

In 2000, Maine became a national leader in Electricity Restructuring.  Today, electric utility companies own and operate the distribution (wire) infrastructure bringing electricity to customers (DELIVERY).   

The electricity itself is supplied by something called the standard offer, or by other competitive electricity providers (CEP) that a customer may choose (SUPPLY).

In Maine, the Public Utilities Commission (PUC), regulates the utilities that provide electricity everywhere....street lights, ballparks, malls, homes, and offices. In our neck of the woods, that utility is Central Maine Power (CMP).  

Maine's residential customers' supply comes through something called the standard offer. The standard offer is the default option for consumers who don't choose a competitive electricity provider, and is created by taking a three-year average of the cost of electricity the Maine Public Utilities Commission sources through a competitive bid process among electricity suppliers. 

Today, residential and small commercial customers are seeing competitive retail supply offers from a variety of companies.  Here is some information to help you understand this market so you can decide if you would like to keep your standard offer or go with a CEP.  

Remember, customers who make no choice will continue to receive standard offer service. For those customers who choose to go with a competitive option, they need only make arrangements with their new supplier who will then work with the utility to make the switch, and the new service be put in place around the time of the utility's next monthly billing cycle.

Nine questions to ask when choosing a supplier

1. What will I pay per "kilowatt hour" (kWh) of electricity?

2. Are there any additional customer charges or other recurring fees?

3. Is this offer a fixed-rate offer? If not, how can it change, and how do I find out when, and by how much, the rate will change?

4. Is there a contract? If so, how long is it for?

5. Is a deposit required? If so, how much?

6. What are my payment options?

7. What happens when my contract period expires?

8. What if I miss a payment?

9. Is there a penalty if I break the contract?

This table lists CEP offerings as of March 1, 2014.

Prices can change without notice, so I strongly urge you to go to the website or call the CEPs to confirm before signing up.

Competitive Electricity Provider	Rate for CMP Customers (¢/kWh)	Rate for Bangor Hydro Customers (¢/kWh)	Term	Early Termination Fee	Telephone
Standard Offer(PUC)	7.56	7.58	Until 3/1/15	n/a	n/a
Dead River Company	7.55*	7.55*	Dec. 2014	$50	855-207-1600
Electricity Maine	7.59 8.97	7.59 8.97	6 Months Fixed 24 Months	$100 $100	866-573-2674 866-573-2674
FairPoint Energy	7.49	7.49	Fixed till 12/31/14	$50	866-842-1084
Gulf Electricity	7.9 8.1	7.9 8.1	One year	$75	855-485-3353
People's Power and Gas	8.499 7.99	8.499 7.99	6-12 Months	Variable	855-857-6937
C.N. Brown Electricity	8.8	8.8	12 Months	$100	800-296-2721
North American Power	6.69 8.64	6.69 8.64	6 months Fixed 12 months Fixed	Variable	888-313-9086
XOOM Energy	7.59 9.99	7.59 9.99	6 Months Fixed 12 or 24 Months Fixed	$60 + offset of unused portion of elec. to others	888-997-8979

*Dead River says that its rate will not be higher than the standard offer.

All of these entities have applied for and received a license from the PUC to sell electricity. This means, among other things, that they have demonstrated that they have the technical and financial ability to sell electricity. The PUC does monitor CEPs for adherence to license conditions and to other applicable state laws, but CEPs are not regulated the way CMP and Bangor Hyrdo Electric and other utilities are. We do not have access to the CEPs' business plan or profit numbers, for example. However, the price you get is shaped by competition so regulation is not necessary.

The above table contains a summary of terms. The offerings can change at any time; I strongly recommend that you check the current price and read all terms and conditions prior to signing up for any service. For example, some may require that you allow them to perform a credit check, or to report you to credit reporting agencies in the event that you fail to make payments. Keep in mind that the Terms and Conditions are sometimes not readily found on the website; sometimes you only see it as you get closer to actually signing up.

Take care of your blessings,

Craig