Electric lessons

Maine’s plan to restructure its electric utilities, scheduled to begin next year, differs from a year-old Massachusetts restructuring plan in several ways, but some of the experiences there ought to give warning to consumers here. First on the list are: Don’t expect significant savings immediately and, if you are an individual consumer, don’t expect them at all.

The Boston Globe last week looked back at a year of competition in the electric utility business and found everything but competition. That is, the generators who were supposed to show up and drive down the cost of power stayed home.

There were a couple of reasons for this. Massachusetts created uncertainty by holding a referendum on the issue in November, when voters supported the regulatory reform. And the state’s standard offer, which is the rate customers will pay if they do not pick their own generator, was set too low. Maine can avoid both the uncertainty and the pricing problem, but it may not be able to avoid leaving some customers with deals not much better than they are getting now — but with the headaches of the competitive market.

All Massachusetts customers got a state-mandated 10 percent discount off their bills when the restructuring began there, but the savings through the new market-driven system has yet to arrive — except for big consumers of power who are able to sign multiyear contracts. The few tenths of a penny per kilowatt hour of electricity that power providers make from these customers attracted interest because of the amount of power requested.

The lessons for Mainers in the Massachusetts experience are these, among others: The large customers who are currently able to strike deals with power generators should continue to get preferred prices for electricity. Individuals, with their dinky residential power demands, might not be of much interest to power competitors. Individuals who group themselves by profession or association to make their pooled demand less dinky and more attractive to bidders could do better. Individuals left out of these groupings might well be the people who are most in need of a break on their electric bills.

Eventually, the competitive market is supposed to take care of these problems — competition views the existence of high prices as an opportunity to gain customers by providing slightly lower prices. In theory, individual customers will benefit, just as long as they’re not in a hurry about it.