Maine pays 24% more for electricity compared to national average

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Electricity

LePage Administration looks to lower prices for Mainers 

The Maine Energy Office announced Friday that electricity rates in Maine as compared to the national average are much higher than other states. The data, provided by the U.S. Energy Information Administration, indicates that Maine rates are improving. However, Maine is still 24 percent above the US average at 11.94 cents/kWh (per kilowatt hour) as compared to the national average of 9.62 cents/kWh.

Maine has the 12th highest electricity prices in the United States. Maine’s 2010 average all-sector retail price was 31 percent above the national average decreasing to 26 percent above in 2011. The latest data shows that we are currently at 24 percent above the national average. “We are moving in the right direction, but we need to progress more quickly. Electricity rates are so high that they are killing job opportunities in the State of Maine,” said Governor Paul LePage.

The decline in rates can be attributed in part to the standard offer rate for Residential and Small Commercial customers that decreased in March. The decline was approximately one cent per kilowatt hour (kWh) – electricity usage in Maine is billed in terms of cents per kWh of electricity consumed – saving consumers approximately $50 million per year.

While it is encouraging that Maine’s electricity rates are decreasing, the reduced prices are primarily the result of the significant decreases in the price of natural gas, which sets the clearing price in the market. Natural gas is the primary fuel for about 50% of the capacity in Maine. However, Maine has one of the highest renewable standards in the nation, requiring 40% of total retail electricity sales to come from renewable resources by 2017.

The Governor has been and will continue to prioritize his work with natural gas companies, regulators, potential customers, communities, neighboring states and provinces and other stakeholders to expand natural gas infrastructure throughout the State.

Additionally, to ensure an affordable, adequate and reliable supply of electricity for Maine residents and to encourage the use of renewable, efficient and regional resources, the Governor will continue to open the market to all cost-effective generation sources, including large-scale hydro-power. The LePage Administration will again seek to remove the 100MW cap on hydro-power in an effort to lower energy prices for Mainers.

The Governor and the Governor’s Energy Office are developing a short- and long-term strategy to pursue energy security with clean, reliable, affordable, sustainable, regional resources and increased access to natural gas supplies where economically feasible. The Plan will also provide a clear, concise and comprehensive blueprint to address a potential or actual energy emergency caused by a supply disruption, a rapid and unsustainable increase in energy prices or other energy emergency situation.

Kenneth Fletcher, the Director of Governor LePage’s Energy Office, says, “This Administration is committed to lowering the energy costs for Mainers and the way we reduce costs is to advance an energy agenda next legislative session. The Energy Office is going to continue to work tirelessly to lower Maine’s energy costs to benefit all Mainers and make the state more business-friendly to enhance economic development and job growth.”

1 COMMENT

  1. I wish the Governor and his Energy Office all the best in lowering electrical costs. Electric rates are not going down though, in July they went up 19.6%, and are projected to continue to increase for the next 5 years.
    I believe the current increases are due to smart meter “deployment”. They never did a true cost/benefit analysis, PUC never told them to do it, the legislature never considered it an issue, and our Governor has been pre-occupied with budget matters.
    Somebody has to pay for them, and it certainly won’t be CMP’s management.

  2. The reduction in supply cost has been offset by the delivery cost from CMP. It is assumed that the increase in delivery cost is primarily driven by the Maine Power Reliability Program. This program makes it possible to deliver long term, uncompetitive, high priced and environmentally intrusive wind power to the grid.
    The Governor’s Energy plan and vision for both the short and long term are a vast improvement over the 40 years we have seen from our prior Democratic leadership who were intent on attacking centralized power and gave us Non-Utility Generators with long term contracts over the system avoidance cost. Paper mills soon found that making electricity, subsidized by Maine rate payers, was more profitable than paper.
    Removing the 100 MW cap on hydro-power is a modest, common sense and reasonable step in the right direction. A portion of the money saved could be directed to more research in Maine to advance wind, solar and other renewable source technology with the goal of deploying a renewable source that is cost competitive.

  3. I’m still paying the same for the supply as I did 20 years ago, it’s the delivery cost that is so high, more than my supply cost, even after paying for the installation to start with, thanks to de-regulation.

  4. Henry: Your Electric Rate is comprised of Supply and Delivery components. Only the Delivery Rate component went up 19.6% to pay for current transmission grid upgrades in all of the ISO-NE territory. Approximately 50% of the $192 million CMP Smart Meter program was funded with federal ARRA dollars. CMP, along with the concurrence of the Maine PUC in 2007, believes that the cost savings of using the wireless meters versus mechanical meters will offset its capital cost.
    The Smart Meter program was initiated by the US Congress with the passage of the Energy Independence and Security Act of 2007 which included other renewable mandates including biofuels in gasoline (ethanol), florescent light bulbs and greater minimum auto mileage. The Baldacci Administration jumped all over the renewable bandwagon and pushed through its green agenda including the Smart Meters. There is no evidence that the PUC Commissioners at the time ever considered that there was a safety issue. As they often did at that time with many issues, they did not conduct a thorough review and analysis (including costs) and just rammed through its approval based on assumptions.

  5. Wind power is expensive! If you doubt it take a look at Fox Islands Wind’s electrical rates on Vinalhaven and North Haven where rates have gone UP since the towers were installed.
    http://fiwn.wordpress.com/category/fox-island-electric-coop/

    Last month island rates finally went down because one of the turbines had a broken gearbox and was NOT working. Islanders SAVED on their electrical rates because the island could buy energy from the MAINLAND and take advantage of low natural gas prices. Hard working families on Vinalhaven are being asked to pay a premium for wind power because the financial deal FIW set up for tax incentives with Hildreth requires that the island electrical coop buy all its power from FIW, the wind energy developer, no matter what the price! If you want to see what will happen in this state if residents are forced to rely on intermittent, unreliable wind energy, you have to look no further than Vinalhaven.

  6. The Maine PUC has lost it’s focus on providing Maine customers the lowest cost electricity in favor of a political position. The Commission needs to stick with the facts that determine the costs associated with type of generation and remove itself from the political mumble-jumble.

  7. That’s where the true scam comes in. Reselling non-green energy under the guise of wind produced.
    9.25 cents per kilowatt hour. Tom signs an agreement stating to produce/sell an “X” amount of energy. If his turbines cannot produce (and they work at about 8% efficiency in Western Maine), they make up the difference by purchasing strips from ISO-NE at around 4.5 cents per KwH. That’s where the true scam comes in. Reselling non-green energy under the guise of wind produced.

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