Central Main Power notified regulators Thursday that it would request higher distribution rates to cover a $570 million reliability improvement plan that could create up to 85 new jobs over three years, but the plan quickly met strong opposition from the governor and attorney general.
The average CMP customer will pay $5 per month in the first year of the plan, bringing the average bill for a home using 550 kWh of electricity to $131 per month. The rate will increase to $2.5o per month in each of the next two years of the plan, bringing the rate in the third year to $136 per month.
The CMP is asking the Maine Public Utilities Commission to approve its plan and allow the rate hike to take effect in the third quarter of 2023.
CMP CEO Joseph Borington said the facility hopes to improve its notoriety for reliability and add automation to its network to handle the growing demands on the network as more people rely on it to power electric vehicles, heat pumps and other devices.
“We are creating predictable rates over the next three years so that electricity distribution pricing, the part of the bill that is fully controlled by the CMP, is a more stable component of everyone’s energy portfolio,” Borrington said.
The idea provoked violent reactions from political figures. Governor Janet Mills said Mainers are already struggling with the rising costs of record inflation. It asked the CMP to refrain from asking for a price hike and threatened to call on its own energy office to step in to oppose it and the utilities commission to reject it.
“There is simply no way that increasing people’s electricity bills now can be considered fair and reasonable,” she said in a statement. “I will fight this.”
Former Governor Paul LePage, a Republican who is running against the Democratic governor in November, issued a statement calling the CMP proposal “frankly unacceptable” with Mainers “already struggling to pay their electricity bills” and criticizing Mills’ energy record.
Solicitor General William Harwood said his office will carefully examine the details of the CMP’s application to determine the key costs outside the line and make an alternative recommendation to the committee.
The CMP includes installing more robust poles four inches wider than existing poles and coated wire to withstand the most volatile and intense storms brought on by climate change. CMP plans to install thousands of smart switches, which can be controlled remotely to transfer power to customers affected by the blackout. It will also be more extensive in tree pruning, which is the main cause of tree cuts.
The proposed distribution rate hike comes after regulators approved sharp increases in effect in January for the standard supply rate, a default rate for those who don’t buy electricity from a third party, for both CMP and Versant Power.
This increase added about $30 per month gross to the average housing bill for both utility customers to bring the CMP bill up to $126 per month for 550 kWh of use and a Versant customer to $131 per month. These increases began on January 1 and will continue through the end of this year.
January interest rate increases prompted regulators in February to approve a one-time $90 electricity bill credit for 90,000 low-income customers of CMP and Versant to help offset higher rates. The rise came with a sharp rise in the price of natural gas that supplies New England’s power grid.
An electric bill has two components, electricity supply and connection. Electricity supply rate is determined by the competitive bidding process required by Maine law, not by electric companies. CMP and Versant have complete control over the delivery rate.
CMP has been criticized for poor performance and reliability since a windstorm in October 2017 knocked out power for some customers for up to a week and for errors at the time corresponding to the installation of a new billing system. The commission had fined CMP shareholders an estimated $10 million in reduced earnings, the highest penalty ever imposed by the commission, but it was lifted in February.
The company is still struggling to restore customer trust and improve its reputation, two factors that helped win last November’s referendum for those who oppose the billion-dollar hydropower corridor. Also following in their wake are national utility performance surveys, including a survey from J.D. Power that ranked CMP last for the fifth year in a row for residential customer satisfaction with electrical utilities.
Borington said the new plan, called Powering Maine, will help Maine meet its climate change goals and improve the electric grid. It will be rolled out regionally starting in southern Maine.
The added automation of CMP will allow the network to operate remotely and recover power more quickly for clients. The plan includes upgrades to help prevent flooding at the substations. The company will add details to the plan over the next two months and deposit them in the utility commission over the summer.
Borington said improvements to the electrical grid could help reduce annual energy costs over time. The plan will have regular reliability measures to determine the frequency and duration of outages.
“We plan to make significant upgrades to the automation of the distribution system that will allow us to reduce the number of customers affected by each outage, enable faster energy recovery and continue to replace legacy network components such as poles and wires,” Borington said.
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