A Wisconsin-based energy company has been awarded a three-year contract to supply standard offer electricity to residential customers of Maine Public Service Co. in northern Maine.

The supplier, WPS Energy Services Inc., is a subsidiary of WPS Resources Corp., an electricity and natural gas utility with offices in Wisconsin, Michigan, Illinois, Ohio and Maine.

The new rate, to take effect March 1, is set at 5.58 cents per kilowatt-hour during the first year of the contract. That rate increases to 5.69 cents per kilowatt-hour during the second year and 5.8 cents per kilowatt-hour in the final year of the agreement. MPS customers currently pay 4.29 cents per kilowatt-hour.

Delivery rates are expected to remain at 7.36 cents per kilowatt-hour.

Cost for a residential customer using 500 kwh per month will increase from $58.25 this year to $64.70 next year.

By comparison, Bangor Hydro-Electric customers currently pay 6.106 cents per kilowatt-hour for supply and 9.4 cents per kilowatt-hour for delivery. Central Maine Power customers pay 4.1 cents per kilowatt-hour for supply and 7.84 cents per kilowatt-hour for delivery.

WPS also won the bids to supply electricity to Eastern Maine Electric Co-operative Co. based in Calais, Houlton Water Co. and the Van Buren Light and Power District.

The bid also covered the standard offer rates for MPS’ commercial and industrial customers. Commercial customers paying 4.25 cents per kilowatt-hour today will pay 5.62 cents per kilowatt-hour beginning March 1. That number will increase to 5.73 cents per kilowatt-hour in 2002 and 5.85 cents per kilowatt-hour in 2003.

The rate for industrial users will increase from 4 cents per kilowatt-hour to 6.01 cents per kilowatt-hour on March 1. That rate will increase to 6.13 cents in 2002 and 6.253 cents in 2003.

Phillip Lindley, spokesman for the Maine Public Utilities Commission, said Tuesday that the 11 percent increase in electricity rates for residential users was to be expected due to generally higher energy costs in the current market.

“Certainly we were looking for the lowest price,” Lindley said. “But I think everybody was aware that rising fuel costs were going to have an impact on the standard offer rates.”

Lindley said the WPS bid was identified as the lowest cost on Dec. 19, but the company needed until Tuesday to lock in contracts with its suppliers before it could be identified. The delay, Lindley said, “allowed WPS to make firm its contracts for that [electricity] load.”

Thomas Welch, PUC chairman, said in a prepared statement that he is aware that slight increases in energy costs may be burdensome to consumers, and added that should energy costs drop MPS customers will have the option to shop for lower rates in the competitive electricity market. The PUC release also said that the new rate will bring price stability to MPS customers and prevent energy price increases over the next three years.

When the electric industry was restructured Maine’s major utility companies were forced to sell their energy production plants and only transmit and distribute electricity from other sources. Most Maine electricity consumers are paying the standard offer rates. According to state law, the PUC is required to solicit, review and accept bids from power companies wishing to sell electricity in the state.

WPS is no stranger to Maine, having previously contracted with Alternative Energy Inc., a biomass electric generation company with facilities in Ashland. Ed Howard, power marketing executive for the WPS Caribou office, said in a prepared statement that he credited contracts with local suppliers such as AEI for making WPS the low bidder for standard offer service.