The average residential bill for customers of Central Maine Power will drop another 4% next year due to an adjustment to the transmission rate for the delivery of electricity, the utility said Wednesday.
CMP’s delivery price will drop Jan. 1 to 11.7 cents per kilowatt hour from 12.2 cents. It’s the second announcement of reduced rates in as many weeks and welcome news for many who are still feeling the effects of inflation.
Electric bills in Maine include two portions: supply and delivery. Supply costs go to the electricity generators; delivery costs go to local utilities.
CMP spokesman Jon Breed said the delivery rate is derived from a complicated formula drafted by ISO-New England, the region’s grid operator, and the Federal Energy Regulatory Commission. The rate is associated with the cost of local and regional transmission service, he said.
The FERC rate is updated annually and is common across New England utilities, Breed said.
“Fortunately for CMP customers, this year’s update produced a reduction,” he said.
Two weeks ago, the Maine Public Utilities Commission approved a 2024 standard offer rate for supply, which is the default for nine of 10 residential and small-business customers who don’t contract for electricity with competitive energy providers. The new rate represents a 35% decrease from current rates.
Combined, these decreases will save the average CMP standard offer customer about $35 a month, Breed said.
State utility regulators in June approved a rate increase for CMP that will increase a typical home’s total electric bill by just over 1%, or $1.67, starting in July and by roughly $5 a month by the middle of 2025. That increase, part of a compromise with Maine’s public advocate, included money to upgrade the distribution grid to boost reliability, resist storm damage linked to a changing climate and accommodate clean energy investments.
That portion is separate from supply and delivery costs, but with the lower transmission and distribution rates, it’s a “net negative” heading into 2024, Breed said.
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