Central Maine Power Co. on Wednesday agreed to stretch its next rate increase in multiple steps across the next three years and is asking regulators to approve it.
The agreement among CMP, the Office of the Public Advocate, AARP Maine and other parties aims to mitigate the impact of CMP’s distribution rate increase of $67 million with four equal rises of $16.75 million. They are set to happen on July 1, 2023, Jan. 1 and July 1 of 2024 and Jan. 1, 2025.
The first hike on July 1 will increase the overall bill by about $1.67 per month for an average residential customer using 550 kilowatt hours of electricity per month. The distribution rate is one part of the electric bill covering the delivery of electricity.
The payment scheme is similar to one agreed to by Versant last week that delayed half of its distribution rate increase until January 2024. That increase was approved by the Maine Public Utilities Commission on Wednesday. CMP’s agreement is pending approval by the PUC.
Andrew Landry, deputy public advocate, said the settlement is not perfect but is a significant decrease from the $98.8 million in four payment steps that CMP initially asked for. The agreement Wednesday also eliminated requests by CMP to defer the costs of certain investments until later, which would have resulted in larger rate increases over the next two years, he said.
A major reason behind the rate increase request is the significant capital investments CMP is planning to improve customer service. CMP has been harshly criticized by ratepayers since a major windstorm in October 2017 led to the worst outage event in Maine history and a botched cutover of a new billing system at the same time. Both CMP and Versant have ranked at the bottom of J.D. Power customer satisfaction surveys for the past several years.
“To help ensure that such benefits are actually realized, the settlement agreement includes a provision that could impose financial penalties on the company if certain service quality levels are not achieved,” Public Advocate William Harwood said.
