Maine PUC approves stranded cost recovery for state’s utilities
The Maine Public Utilities Commission (PUC) approved the recovery of stranded costs for Maine’s two Investor-owned Electric Utilities — Central Maine Power Company (CMP) and Versant Power.
Stranded costs include the impacts of long-term contracts for renewable power as well as the net energy billing programs created by the state legislature to facilitate the transition to renewable power. These programs are mostly made up of residential and community solar projects with above-market costs. The new rates for these stranded cost cases will go into effect on July 1, 2023.
The average CMP residential customer will see a rate increase of about 5.8 percent, or $5.95 per month. The average customer in the Versant Bangor Hydro District will see an increase of about 9.3 percent, or $8.77 per month, while the average Versant Maine Public District customer will see an increase of about 6.5 percent, or $5.47 per month.
“As with the recent distribution rate increase, we understand that any increase is not ideal and comes at a time when people are already impacted by inflation,” Commission Chair Philip Bartlett II said. “These costs are the result of policies enacted to advance Maine’s transition to renewable energy and help achieve Maine’s climate goals. It’s important to note that while we are seeing an increase in the short term, reducing our dependence on fossil fuels and the associated greenhouse gas emissions through projects like community solar have significant benefits, helping to drive down costs over the long term and increasing resiliency in our distribution system.”
For some background, prior to electric restructuring in 2000, Maine’s electric utilities generated electricity and delivered it. Following electric restructuring, utilities were required by law to sell their generating assets. The cost of those assets is recovered by utilities through stranded costs, which are included as part of the total delivery costs on a customer’s monthly bill. As those obligations have been paid down, the related stranded costs have become negligible.
Stranded costs also include costs and benefits related to long-term contracts for electricity generation that have been acquired through state policy since restructuring.
