Maine PUC solicits standard offer proposals

The Maine Public Utilities Commission has issued Requests for Proposals for retail electricity standard offer service.  At stake is the right to supply default electricity service to customers of Maine's two largest utilities -- as well as the price those customers will pay for power.

Maine restructured its electricity sector in the late 1990s.  Formerly, utilities owned both power plants and the wires and other infrastructure needed to supply consumers with electricity.  But as of March 1, 2000, investor-owned transmission and distribution utilities may own and operate wires, but generally cannot have a financial interest in or otherwise control generation or generation-related assets.  Power plants became "deregulated" from the perspective of state retail rate regulation, and were sold off by the utilities.  At the same time, Maine law created a new kind of entity called a "competitive electricity provider" to perform the role of supplying electricity as a commodity.

Customers can choose among supply offers from competitive electricity providers.  Suppliers can offer specific types of product (e.g. 100% renewable power, locally-sourced) or particular contract terms (e.g. pricing schedules, payment terms).  Most large industrial energy consumers choose competitive electricity supply under this option, as do many commercial accounts and some homes.

If a customer does not choose a competitive electricity provider, that customer is placed on "standard offer service" by default.  Maine law requires the Maine Public Utilities Commission to arrange for standard offer service though a competitive bid process, and to ensure that standard offer service is available to all customers in Maine.

The pending RFPs cover retail electricity standard offer service for calendar year 2016 for all customer classes in the territories of Central Maine Power (CMP) and Emera Maine-Bangor Hydro District.  Collectively, CMP and Emera Maine deliver approximately eleven million megawatt hours annually, of which about 45% currently comes from standard offer service.

The RFPs and related materials are available on the MPUC website.  Initial proposals are due on October 6, 2015. Following negotiation of non-price terms and a submission of final bid prices, the Commission is expected to select one or more proposals,  Service terms will begin on January 1, 2016.

Some Maine electricity prices fall

According to the Maine Public Utilities Commission, the price of electricity is falling for some customers. The Maine PUC recently set prices for standard offer electricity service for large commercial and industrial customers for next month. These prices - 3.2 cents/kWh for Central Maine Power customers and 3.1 cents/kWh for Bangor Hydro-Electric customers - are 10% lower than prices in March and 25% to 35% lower than prices one year ago.  Observers point to even lower wholesale power prices, driven largely by the availability of inexpensive natural gas.

In the late 1990s, Maine restructured its electricity market into two components: supply and delivery. Previously, Maine utilities operated both facilities for generating electricity (generation) and for delivering it to consumers (transmission and distribution). Today, thanks to the deregulation of generation and restructuring of the market, these functions are separate. In today's Maine marketplace, energy supply refers to buying the electricity itself from a competitive wholesale market, while delivery is the service provided by transmission and distribution utilities in delivering the energy to consumers.

Maine consumers are free to select a competitive electricity provider for their energy supply. As an alternative, customers can choose not to choose, instead automatically participating in a utility-wide pool of "default service" or "standard offer" electricity purchases. 

Maine recently revised the structure of standard offer service for large commercial and industrial customers.  Standard offer customers in these classes now pay a 2-part price for their energy supply: an energy charge indexed to wholesale power market prices, plus a capacity charge based on each customer’s peak usage.  On top of these standard offer charges, customers also pay their local utility to deliver the power.

Many larger consumers have found that they are able to procure electricity at a lower cost than the standard offer, either through a competitive supplier or by participating in the wholesale market directly. For others, the standard offer provides some certainty and medium-term price stability for energy purchases, although standard offer prices change monthly and can be more volatile than some competitive alternatives.

September 16, 2010 - electric vehicles; Sugarloaf's efficient snowmaking

Today, a look at several recent articles about electric vehicles.  First, an article by Tom Walsh entitled "Why electric cars aren’t right for Mainers — right now".  He cites the high price of electricity in Maine, which he attributes in part to deregulation and the ISO New England price-making methodology in which all resources are paid the clearing price of the last resource needed to cover load.

Second, a counterpoint by Milt Gross, who suggests that electricity is still much cheaper than gasoline in his experience, even when customers choose (as he did) to source their power from 100% renewable competitive electricity providers -- something empowered by deregulation.

Finally, a pair of letters to the editor about alternative energy: one supporting wind power as a constructive solution to energy and environmental problems, and another urging for the development of a hydrogen fuel market powered by renewable hydropower.

Maine ski area Sugarloaf is continuing to install high-efficiency snowmaking equipment, in addition to proposing a terrain expansion onto Burnt Mountain.