Customers of Versant Power will face sharply higher electricity supply rates in 2023 on top of big increases paid this year.
The Maine Public Utilities Commission on Tuesday approved a new “standard offer” supply rate for residential and small-business customers of 16.44 cents per kilowatt-hour, an increase of 41% over the current rate of 11.68 cents.
The new rate will increase the bill for a typical household using 500 kWh of electricity a month by nearly $24, from $114.78 to $138.55, the PUC said.
For Versant Power’s medium-sized business customers, the cost of electricity supply varies by month but next year will average 15.8 cents per kWh, an increase of about 43% above the current rate, the PUC said. Prices for large commercial customers are indexed to wholesale market prices each month.
Versant Power serves about 159,000 customers in northern and eastern Maine. The increase in the company’s standard offer follows a roughly 88% hike that kicked in at the beginning of this year. The new rates go into effect Jan. 1.
The PUC is meeting Wednesday to announce new standard-offer rates for Central Maine Power Co., which serves 636,000 customers in the southern and central parts of the state. Although the standard-offer rates for each company are the result of separate bidding processes, the direction and size of the new rate for Versant Power customers often portends a similar change for CMP customers.
The standard offer is the default price most customers pay for their electricity supply and is set through competitive bids that power-generating companies submit to the PUC. In Maine, customers can choose their electricity supplier, although most opt for the standard offer.
Versant Power, Central Maine Power and, in a few cases, small municipal utilities, transmit the electricity. These companies charge for their services, and customers receive a combined bill that reflects the cost of generating the electricity as well as its delivery. The price of the electricity supply makes up about 60% of the total.
REGIONAL TREND
Maine PUC Chairman Philip L. Bartlett II said the rate increase approved Tuesday largely reflects higher costs for natural gas in New England, which is driving up electric bills for customers across the region. Many power suppliers burn natural gas to generate electricity, although there are other sources such as coal, oil, solar power, hydropower and wind energy.
Bartlett said that even though the winning bids for the standard offer represent a sharp increase over last year’s price, commissioners had been bracing for an even larger hike.
“While we recognize that this is a significant increase that comes at a time when consumers are already faced with rising prices due to inflation, the natural gas markets have come down from a few months ago, resulting in a better outcome than we originally anticipated,” Bartlett said.
According to the PUC, electric rates in New England range from a low of 11.34 cents per kWh in Connecticut to a high of 24.65 cents per kWh in Massachusetts. Connecticut’s regulators will meet this week to set its 2023 rates, which also are likely to rise.
Both Versant Power and CMP also have filed for increases in their delivery rates to cover maintenance and upgrades to their systems. The PUC is expected to hold hearings on those proposed increases next year.
The delivery increases have been opposed by Gov. Janet Mills, who has told her energy office to intervene in the process to try to block the hikes.
Versant is seeking an increase that would raise a typical consumer’s monthly bill by about $10.50 a month. CMP’s rate increase would be phased in so that a typical monthly bill would increase over a three-year period by about $10.
This story has been updated with the phase-in of CMP’s proposed delivery rate increase.
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