Partial hike OK’d for CMP

AUGUSTA – It wasn’t exactly a lump of coal, but Central Maine Power Co. did not get its Christmas wish fulfilled by the Maine Public Utilities Commission on Friday either.

The PUC will allow CMP to raise rates for its commercial and industrial customers during the first two months of 2001 from an average of 5 cents per kilowatt-hour to 53/4 cents per kilowatt-hour. The power company also will have to tap into its assets to cover the money it had asked the PUC to pass on to ratepayers.

The rate increase does not apply to residential customers.

CMP sought the increase to cover the anticipated cost of a ruling by the Federal Energy Regulatory Commission. Issued earlier this month, that order set a very high penalty fee. That fee is charged to power suppliers when they do not meet a requirement to have in place all of the electricity they are obligated to send over the grid daily plus extra in case it is needed during peak demand periods.

Originally, CMP said it would need $11.6 million to cover the cost of the FERC ruling. In testimony before the PUC Friday morning, CMP officials revised that figure to $9.6 million, according to Phil Lindley, spokesman for the PUC.

The rate increase granted will cover $3.2 million of that $9.6 million, said Lindley. The rest CMP will have to take out of the profit it made from the sale of its generators to Florida Power and Light two years ago.

A new standard offer period will begin March 1 for CMP’s estimated 10,000 commercial and industrial customers. Residential rates are set through 2002.

Lindley said that the members of the PUC are working with the Maine congressional delegation to modify the FERC ruling. The state’s two U.S. senators and representatives issued a joint statement Wednesday after meeting with commissioners and said that the FERC ruling, which affects the entire country, was issued to solve a problem specific to the West Coast.

“We do not have, and do not expect to have the capacity problems that exist in California,” read the statement. “FERC is displaying a lack of sensitivity to regional differences and certainly to regional concerns.”

Lindley said that there might be good news on the horizon for everyone in Maine who uses electricity. He said that as of Dec. 1, 68 percent of the electricity bought by CMP’s industrial users was purchased competitively rather than through the standard offer. He added that commercial users bought 14 percent of their power competitively while residential users purchased only 1 percent of their power outside the standard offer.

CMP’s figures for August were 60 percent for industrial, 7 percent for commercial and less than 1 percent for residential customers. The statewide average for competitive power purchases as of Dec. 1 was 30 percent, he said.

“That shows that we are getting more competition in the state,” said Lindley. “Providers start at the top of the market first and work their way down. Increased competition should mean lower prices.”