Central Maine Power is trying to reach a compromise with the state over a proposed rate hike that would go into effect by September. Press Herald file photo
Central Maine Power Co. lawyers plan to meet Wednesday at the Public Utilities Commission to continue confidential talks aimed at finding a compromise over the company’s unpopular request for a series of rate hikes, according to a PUC schedule.
If a settlement is worked out, it could head off a pending high-stakes decision by the commission in July.
It’s not unusual for utilities to pursue a settlement outside of formal rate requests, particularly in costly, time-consuming cases such as this one, which began 11 months ago. CMP and the Maine Office of the Public Advocate have been quietly pursuing an agreement at the PUC since early March, when an attorney for CMP sent a letter to the agency to set up an initial conference. Wednesday will mark their third meeting.
Since the discussions aren’t made public, there will be little information released unless key parties in the case come to terms. Any deal outside the formal rate-setting process must be approved by the three PUC commissioners.
“We believe we’re making substantial progress towards a settlement,” Bill Harwood, Maine’s public advocate, said on Monday.
CMP has a powerful incentive to reach an outside deal, known as a stipulation.
The referendum campaign to take over the assets of CMP and Versant Power and form a public distribution utility called Pine Tree Power is heating up ahead of a vote in November. Moving past the rate case might spare CMP some negative publicity just as Mainers are weighing the merits of the takeover plan.
Asked what was driving CMP’s interest in settling the case, a spokesman noted the confidential nature of the talks.
“CMP is always open to discussions with intervening parties as a way to efficiently advance fair and equitable investment solutions that balance electric power system needs and customer rates,” Jon Breed said.
Takeover proponents, organized around the Our Power citizen group, have recently been wrangling in court over the wording of the ballot question that voters might see in November. Meanwhile, CMP’s domestic parent company, Avangrid, continues to fight the proposal, contributing more than $13 million to a political action committee called Maine Affordable Energy.
The issues around the public utility fight are due to be previewed Thursday starting at 1 p.m., when a legislative committee holds a public hearing on L.D. 1611, an act to create Pine Tree Power, a nonprofit costumer-owned utility. As part of the citizen initiative process, the Legislature must formally consider the bill and is expected to vote to put the question on the ballot.
COMPLEX RATE RISES
Electricity supply rates have soared over the past two years in Maine, largely because of spikes in prices for wholesale natural gas used to fuel many New England power plants. Those rates aren’t controlled by CMP or Versant, which distribute power but don’t generate it – a distinction sometimes lost on ratepayers. But regardless of the cause, consumers are likely to resent any further increase in electricity bills at a time when inflation continues to ripple through the economy.
Compounding the problem, electric rates also are set to rise in July as part of an annual adjustment of utility expenses. That increase, estimated at $9 per month by Harwood’s office, is largely to pay for long-term power purchase agreements approved by the PUC and the net energy billing costs associated with renewable energy contracts such as community solar farms. CMP is required by law to enter into those contracts.
Last May, CMP asked state regulators to approve a three-year spending plan the company said was focused on increasing reliability and upgrading the distribution system to withstand climate change. The plan would raise bills for a typical home customer by as much as $10 a month by 2026, beginning with a monthly hike of about $5 by September.
The request immediately drew opposition from Harwood, representatives of low-income and elderly groups, and the administration of Gov. Janet Mills.
Most recently, CMP’s rate request has been refined into three increases over three years, according to information released by the public advocate, starting with $44 million in the first year, then $28 million and $24 million. Harwood’s office has proposed a single, smaller hike of roughly $18 million. If that recommendation is accepted, it would add $1.80 a month to a typical residential bill.
A settlement would put an end to an exhaustive process that has been unspooling over the past 11 months in the formal rate case. A team of 17 agency staff has been gathering thousands of pages of evidence, testimony and documents from scores of intervenors. The agency’s three commissioners have hosted a trio of public hearings, where customers pleaded with the PUC to reject any rate increases.
Besides the Office of the Public Advocate and Governor’s Energy Office, other intervenors in the case include business interests such as the Industrial Energy Consumer Group, Competitive Energy Services and Walmart; clean energy advocates such as the Natural Resources Council of Maine and the Conservation Law Foundation; and workers and customers represented by the International Brotherhood of Electrical Workers and AARP Maine.
Separately, Versant Power is seeking a 31% increase in its distribution rates at the PUC, and says the hike is needed to improve service reliability.
It was unclear Monday what might happen after Wednesday’s meeting at the PUC. According to Harwood, a stipulation that’s endorsed by the utility, the public advocate and the PUC staff has a decent chance of winning approval from the PUC commissioners. But because this case has more than a dozen other intervenors, dissenting parties who weren’t part of the negotiations could seek to oppose the deal.
The uncertain nature of this process was highlighted in late January, when the PUC rejected a stipulation meant to blunt a substantial rate hike for customers of Summit Natural Gas. Even though Summit and the public advocate agreed on a smaller increase, the PUC ruled that the deal shifted too much of the cost of Summit’s investments in Maine gas service onto customers. That case is pending.
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