Hydro wins rate hike

Customers of Bangor Hydro-Electric Co. will see their electric bills increase by about $5 a month starting in January.

On Tuesday, the Maine Public Utilities Commission approved a 7.3 percent increase in the utility’s base rate.

This increase amounts to $12.2 million a year. Bangor Hydro originally asked for a $19 million increase, but later lowered the request to $15.7 million.

The Bangor utility made the request in March, and the PUC spent nine months investigating the matter.

“This is the first base-rate increase of any substantial size that we have experienced since 1985,” said Robert S. Briggs, Bangor Hydro’s president. “To be sure, our total rates have risen over those years, but that has been due to increases in our fuel-cost adjustment rates.”

Bangor Hydro’s rates, like those of other electric utilities, are made up of a base-rate component and a fuel-cost adjustment. Base rates are changed, after investigation and hearings, only when necessary to reflect general changes in the cost of providing service, other than items included in the fuel-cost adjustment. The fuel-cost adjustment is revised every year. For Bangor Hydro, the fuel portion of the electric bill amounts to more than half of the company’s total annual revenue.

The $5 monthly increase in residential bills assumes usage of 500 kilowatt-hours of electricity, the average residential use.

Part of the $12.2 million increase had been in effect since September, when the PUC allowed the utility to charge for an “undisputed portion” of the increase. That portion amounted to about $2 million a year.