Versant Power filed a request with the Maine Public Utilities Commission to increase their distribution and transmission rates beginning next summer. The rate case filed on Oct. 3 seeks an increase of about 32 percent, which would affect ratepayers by about 10 percent since only half of your bill is attributable to delivery costs.
Ratepayers across the state have been besieged since January when rates for the supply side of their bills went up by an average of 80 percent. For many small businesses, those rates were 300 percent higher than January 2021.
Much of that increase has to do with the Biden Administration’s energy policies and disdain for the energy sector. What’s worse are the liberal policies of Maine’s governor and Democrats in Augusta, such as the requirement to buy more expensive energy – even if we don’t need it. This isn’t what ratepayers bargained for or deserve.
Maine has been affected much like of the country by the price of natural gas – a major fuel source for about 53 percent of New England’s power generation on average. Prices doubled in 2021 from what they were a year prior and are even higher so far this year, according to the U.S. Energy Information Administration.
Still, long-term contracts have helped stave off supply increases for some of our smaller utilities. Ratepayers who have service through Van Buren Light and Power, Houlton Water Company and Eastern Maine Electric are safe for now, but those contracts will expire in the next few years and their customers will be facing the same headwinds.
Our electric rates in Maine are already 57 percent higher than the U.S. average. And while Maine PUC is currently reviewing bids for next year’s Standard Offer supply rates, we already saw what happened Sept. 28 when the PUC approved Summit Natural Gas’ rate case — it will double their customers’ gas supply costs this winter. And if the rate increases happening in New Hampshire are a harbinger, it’s obvious where this is headed.
So while it may seem like Versant’s timing is horrible, they cited rising costs of their own in the request to increase their distribution rates. Their request comes amid a similar rate case filed by Central Maine Power in August to increase their delivery rate as well.
According to Judy Long, Versant’s communications manager in Bangor, the utility company is facing the same inflationary pressures that have affected every other company, including higher fuel and equipment costs and a tight labor market. And much of the aging infrastructure built 60 to 70 years ago is nearing the end of its useful life.
Versant is also facing the dual threat of losing paying customers to spread those costs around, meaning those who remain are increasingly burdened with the company’s fixed operating budget. Verso’s shuttered mill in Bucksport and the recent news that Pixelle Specialty Papers will close their mill in Jay are such examples of how cost sharing has naturally been shifting from commercial or industrial ratepayers to residential consumers for years.
Additionally, renewable energy participants in the State’s net-energy billing program represent yet another problem that is accelerating, according to Long. And it may only be the tip of the iceberg.
When the Democrat-led Legislature enacted net-energy billing in 2019, it was an attempt to jumpstart our path toward renewable energy. And as more residential customers install solar panels under the program, the credits they earn on their bill offsets the delivery cost they would have normally paid.
Ultimately, that pro-rata cost shifts to those without solar. The fairness of this kind of “net metering” system has been plaguing California for years. Versant said it will only get worse here.
Let me be clear: Republicans aren’t against renewable energy sources like solar. We’re against overpaying for tiny amounts of it when we could source much more at a competitive price. This is smart energy and climate policy, and it’s beneficial to Maine’s ratepayers.
While the Legislature obviously needs to fix the net-energy billing issue, we should realize that companies like Versant, CMP and Houlton Water Company are required by law to maintain a reliable power infrastructure at the lowest cost possible. The difference is they can’t raise their prices like other companies. More importantly, it’s now obvious that some of our policies are hurting both them and ratepayers.
My work in the Legislature on the Energy Committee has largely centered on lowering costs. Maine people deserve to know the underlying drivers of these costs and the impact that bad policies can have. We need to develop a real long-term plan, encourage smart renewable sources and prioritize ratepayers.
By doing so, we can protect the climate, our utility companies and ratepayers’ budgets.
Sen. Trey Stewart, R-Presque Isle, represents Maine Senate District 2, which consists of central and southern Aroostook County and part of Penobscot County. He is the Senate Republican lead for the Health Coverage, Insurance and Financial Services Committee, as well as the Energy, Utilities and Technology Committee.
