Who says energy prices never go down?
The typical Central Maine Power residential customer will see their monthly bill decrease by $3.40 or 2.7 percent of the total bill, effective July 1, state regulators announced Tuesday.
The decrease is the result of an annual reconciliation of costs, power contracts and other financial considerations conducted by CMP and Versant Power, the state’s two largest electric utilities.
In approving the rate decreases for both utilities, the Maine Public Utilities Commission said the sale of energy from renewable energy projects, in particular, is driving generation costs down, resulting in lower customer bills.
Versant Power customers will see a slightly smaller rate decrease than CMP customers will get, the commission said, although it had yet to complete the exact calculations for Versant on Tuesday.
With consumer price inflation still out of control, PUC commissioners said they are interested in keeping Mainers’ electricity costs as low as possible this year.
“It’s not always easy to quantify the impact of the renewable energy procurements facilitated by the commission, as it can take some time to see the results,” PUC Chairman Philip Bartlett said. “This is an example of the payoff of those procurements, and we are pleased to be able to offer this positive news during a time when energy prices have been trending upward at an unprecedented rate.”
Maine law requires utilities to buy electricity generated by renewable energy suppliers at rates negotiated by the PUC. The utilities then generally sell that electricity on the open market. This year, the market was particularly favorable for those with a supply of electricity to sell.
The utilities were able to make millions of dollars off the sale of the electricity, which is then calculated in the year-end reconciliation of costs and revenue, resulting in a rate decrease for customers.
The PUC noted that the calculations are the result of “many moving parts,” but said the net impact is lower costs for customers of CMP, Versant Power-Bangor Hydro District residential customers and Versant Power-Maine Public District residential customers.
“This is welcome news for many Mainers as they face increasing costs across the board,” Joe Purington, president and chief executive of CMP, said in a statement.
State officials also applauded the rate cut, particularly since it was due at least in part to increased renewable energy generation in Maine.
“The PUC’s action shows the clear connection between renewable energy and lower electricity costs,” said Dan Burgess, director of the Governor’s Energy Office. “These savings from renewable energy couldn’t come at a better time for Maine people.”
The rate reduction also was lauded by the Acadia Center, which pushes for environmentally friendly energy policies.
“We’re tough on our utilities when their performance fails, but Maine homeowners will appreciate the small dip in their electricity delivery rates next month,” said Jeff Marks, the center’s Maine director.
Marks said new laws to ensure utility accountability and grid planning “will help ensure rate decreases are not an anomaly, especially as more solar and wind come online.”
Despite the short-term savings attributed in part to solar, Maine ratepayers are still expected to see significant future rate increases as more renewable energy projects come online.
State officials have estimated that power delivery rates – which only account for half the bill – could rise by at least 35 percent by 2025 if solar projects totaling 1,667 megawatts of capacity come online as planned.
Nailing down the precise impact on ratepayers isn’t easy because of the complicated formula that underpins Maine’s net energy billing incentive program for solar developers and uncertainty about the number of projects that ultimately will get built.
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