Bangor Hydro rates stay static – for now

AUGUSTA – The Maine Public Utilities Commission on Monday tabled its consideration of a projected $4.3 million loss by the end of February by Bangor Hydro-Electric Co.

The anticipated shortfall is created by the difference between what the utility is paying for power and the standard-offer rate at which it is forced to sell the electricity to customers in its distribution area. Standard-offer service is the rate charged to customers who don’t select a competitive electricity supplier.

Bangor Hydro currently purchases power on the wholesale electricity market and sells that power to its industrial, commercial and residential customers at rates set by the PUC.

The company predicts it will assume a shortfall of roughly $4.3 million through Feb. 28 as a result of the arrangement.

The commission considered raising on Feb. 1 the standard-offer rate charged to Bangor Hydro customers in order to help the company recoup the $4.3 million. But the panel opted to wait before taking such action, deciding instead to get a better sense of market conditions before moving forward.

Phillip Lindley, PUC spokesman, said Monday that because the current standard-offer contract expires Feb. 28 the commission might decide to apply any rate increase to the next standard-offer contract. That rate is set to begin March 1.

“There is no new rate going into effect on Feb. 1,” Lindley said, emphasizing that the commission left the current standard-offer rate in effect by tabling discussion of the matter. Residential customers currently pay 6.1 cents for their electricity supply and 9.4 cents for its transmission and distribution. The total power bill for an average resident using 500 kwh of electricity per month is $77.50.

Before deciding to take no action, the commissioners deliberated whether to apply any collection fees to the standard-offer rate or to the transmission and distribution costs.

Lindley said the commission has some concerns about applying a collection fee to the standard offer because the number of people selecting that service has the potential to vary from month to month. If some current Bangor Hydro customers decide to buy their power from a competitor, the remaining customers would be left to bear the $4.3 million burden.

With the fees applied to transmission costs, Lindley said, the cost would be spread out evenly for all Bangor Hydro customers – making it more affordable for consumers.

Lindley said the commission soon will issue a request for public comment concerning how and when to recover the $4.3 million. That request is likely to come this week. Any decision on the matter, Lindley said, is likely to come by the middle of February.