PUC selects Maine power supplier

BANGOR – A Maryland company has been selected by the Maine Public Utilities Commission to be the supplier of standard offer electricity to more than 550,000 state households starting next March.

Constellation Power Source, a subsidiary of Constellation Power Group of Baltimore, was chosen after a competitive bid process before the commission less than two weeks ago.

On Sept. 19, the PUC released the new standard offer rates but would not disclose the name of the company or companies that won the contracts because the company needed to arrange a contract to buy the power on the wholesale market.

On Tuesday, the PUC said Constellation Power will sell standard offer electricity in the service territories of Central Maine Power Co., which has more than 450,000 customers, and Bangor Hydro-Electric Co., which has more than 100,000 customers.

Standard offer is a default rate paid by consumers who have not chosen another power supplier to sell them electricity. Since the state restructured its electricity markets a couple of years ago, Bangor Hydro-Electric Co. and Central Maine Power Co. no longer sell or generate electricity, just transmit it.

In Bangor Hydro’s service territory, standard offer rates will drop from the current 7.3 cents per kilowatt-hour to 5 cents per kilowatt-hour. The average consumer, who uses 500 kilowatt-hours, will save $11.50 each month.

The total bill – with 5 cents for electricity and 9.4 cents for the transmission of it – will be $72 each month for the average consumer.

In CMP’s service territory, standard offer rates will increase slightly to 4.95 cents from 4.1 cents. The average consumer will pay $4.25 more each month for electricity. The total bill – with 4.95 cents for electricity and 8 cents for transmission – will be $64.75 each month for the average consumer.

The rates are in effect for three years.

PUC spokesman Phil Lindley said in a competitive energy market, the likelihood of one company being selected to sell electricity in two service territories always is a possibility and shouldn’t be viewed as monopolistic.

“They are a competitive company,” Lindley said. “They submitted a competitive bid.”

“The process itself was surely rigorous and competitive,” said Tom Brooks, president of the Maryland company, on Tuesday. “I don’t find it surprising we were selected.”

Although Constellation Power will be selling standard offer power to most of the state’s consumers, the actual number of households is comparable or smaller than standard offer contracts secured in other, more populous states, Lindley said.

“It’s not that big of a contract, but still it’s a big contract,” he said.

The Maryland company will need to be licensed by the PUC as a competitive energy provider working within the state’s borders. Kathy Craig, vice president of electricity supplier, said the application for the license was submitted on Sept. 18 and should be approved within a couple weeks.

Constellation Power provides standard offer service in numerous territories throughout the country, including transmission areas in Texas, but its primary focus is New England, Brooks said. It provides the entire electricity load of Baltimore Gas and Electric.

Constellation Energy Group, the holding company that oversees CPS, is traded on the New York Stock Exchange [Symbol: CEG], and had combined revenues of $3.9 billion and assets of $12.4 billion in 2000. Its stock was at $25.18 on Tuesday, up 0.85 cents.