Central Maine Power met with immediate pushback on Thursday after the utility asked regulators to approve a 30 percent rate hike over three years.
CMP, the state’s largest utility, said the hike is necessary to improve reliability, reduce outages and equip the grid to handle growth in renewable energy and energy storage technology.
“We understand that energy prices across the board are challenging Mainers right now,” said Joseph Purington, president and CEO of CMP. “Our goal is to invest in the system to improve reliability for customers and minimize outage impacts when they occur. At the same time, we want to keep the CMP portion of our customers’ energy wallets, which does not include electricity supply costs, predictable over the next few years.”
The CMP plan includes installing more durable poles that are four inches wider than existing poles and coated wire to withstand the more volatile and intense storms created by climate change. CMP plans to install thousands of smart switches, which can be controlled remotely to switch power to customers affected by an outage. It also would be more comprehensive in trimming trees, which are the major cause of outages.
If approved, the average residential customer would see their monthly bill rise $5 the first year, $2.78 in the second year and $2.33 in the third year, according to CMP. It would be effective mid-2023.
The proposed distribution rate hike comes after the regulators approved sharp increases effective in January to the standard offer supply rate, a default rate for those who do not buy electricity from a third party, for both CMP and Versant Power.
That increase added about $30 per month total to the average residential bill for customers of both utilities to raise a CMP bill to $126 per month for 550 kilowatt hours of usage and a Versant customer to $131 per month. Those increases started on Jan. 1 and will run through the end of this year.
On Thursday, the Governor’s Energy Office requested intervenor status in the rate hike from the Maine Public Utilities Commission.
“While improving our electric system is critical to ensuring a strong grid, the timing of these costs must be balanced against the high costs — including already high energy prices — that are hurting Maine people and businesses right now. CMP pursuing this filing at this time is not in the best interests of Maine people, and we oppose it,” Democratic Gov. Janet Mills said.
Mills said the Governor’s Energy Office will oppose an expected request from Versant Power to raise its rate about $10.50 a month for the average residential customer starting next summer.
That rate hike was met with immediate political backlash when it was first suggested back in May, coming as it does at a time when Mainers are grappling with surging inflation. In May, Republican Paul LePage, who is seeking a third, nonconsecutive term as governor, called the proposal “frankly unacceptable.”
The public advocate’s office also said Thursday it will “actively oppose” the rate hike, saying CMP is looking to recover costs it expects to incur over the next three years rather than recovering already existing costs.
“The OPA is disturbed by the size of the increase and will do everything in its power to oppose it. At a time when Maine consumers are struggling with rising costs, a proposed CMP rate increase of 30% will add to their financial misery. OPA will be at the table every step of the way demanding that CMP justify this increase and if it cannot, OPA will insist that the increase be rejected by the PUC,” Public Advocate William Harwood said.
CMP has come under fire for poor performance and reliability since a wind storm in October 2017 that knocked out power for some customers for up to a week and for errors at that time that corresponded to the installation of a new billing system. The commission’s penalty for that cost CMP shareholders an estimated $10 million in reduced earnings, the highest penalty ever imposed by the commission, but it was lifted in February.
The company is still struggling to regain customer confidence and improve its reputation, two factors that helped lead to a referendum win last November for those opposed to its $1 billion hydropower corridor. Also nipping at its heels are national utility performance surveys, including one from J.D. Power that ranked CMP last for the fourth year in a row for residential customer satisfaction for electric utilities.
The new plan, called Powering Maine, will help Maine meet its climate change goals and improve the electric grid, according to CMP. It will be rolled out regionally starting in southern Maine.
“CMP must continue to balance the needs for predictable costs with the smart system updates that improve reliability now and that enable our company to successfully perform its role in helping Maine meet its climate change goals,” Purington said.
