Emera Maine customers in the Maine Public district will see a decrease in the delivery portion of their electric bill effective Jan. 1. Two rate proceedings resulted in positive news for local ratepayers and will lower delivery rates this winter:
• The stranded cost charge related to past energy resource obligations has been fulfilled. In addition, a settlement related to Maine Yankee will further decrease the stranded cost rate, causing the stranded cost to transition to a credit on the customer bill; and
• The seasonal variation in commercial and industrial distribution rates (in the past, it was higher in winter, lower in summer) will be eliminated, resulting in a flat rate year round.
The stranded cost rate credit will result in a decrease of about $6.35 per month for a typical residential customer bill in the Maine Public district. This is a 7.90 percent decrease in the total electricity bill. Most commercial and industrial customers will also benefit from this rate reduction.
The stranded cost rate is used to recover the costs of energy resource obligations entered into prior to electric industry restructuring. Also included are costs and benefits related to more recent long-term contracts that are required through state policy, such as contracts with renewable generators. The net costs associated with these obligations are recovered from utility ratepayers.
Stranded costs have decreased overall as past power purchase obligations have expired, although there are new costs associated with more recent public polices and contracts. In addition, damages awarded in litigation between the United States Department of Energy and Maine Yankee are being applied to the benefit of customers.
The seasonal distribution rate change affects commercial and applicable industrial customers only, resulting in an annual decrease for most customers. Decades ago seasonal rates were established to adjust seasonal differences in generation costs, but since Maine utilities no longer generate electricity and their costs are relatively fixed year round, seasonal distribution rates no longer make sense. Now is the optimal time to eliminate the seasonal rate component because those few customers who see a slight increase in distribution rates from this change will see that cost offset by a significant decrease in the stranded cost portion of their bill at the same time.
A small commercial customer who utilizes 1,500 kWh per month will see a total bill decrease of about $50.93 per month during the winter months and an increase of $4.92 during the summer months.
Emera Maine is an electricity delivery company that delivers electricity to homes and businesses while maintaining the transmission and distribution system — the poles, wires and other equipment that makes safe and reliable delivery of electricity possible. Distribution and stranded cost rates are regulated and approved by the Maine Public Utilities Commission.
The supply of electricity itself and those associated costs are affected by market conditions and are not within the scope of services that Emera Maine provides. Customers may choose who supplies the electricity that Emera Maine delivers to their home or business. Customers who do not choose a competitive electricity provider receive Standard Offer Service, a default service put out to bid by the MPUC As a convenience, Emera Maine provides billing services for the electricity supplier, and these supply payments are forwarded to the supplier.
The new rates will be posted at www.emeramaine.com effective Jan. 1, 2015.
Emera Maine is committed to delivering safe, reliable electric service. As the state’s second-largest electric utility, the company delivers electricity to 154,000 residential, commercial and industrial customers across 9,350 square miles in five counties in eastern and northern Maine. Bangor Hydro and Maine Public Service merged to become Emera Maine in 2014.
