Standard offer rate for electricity to increase for businesses

AUGUSTA – Electric rates are going up for medium- to large-sized businesses in the Central Maine Power and Bangor Hydro-Electric Co. service territories, officials said Thursday.

Monthly electric bills will grow 10 percent to 20 percent for those customers who choose the standard offer when the new rates go into effect on March 1, according to the Maine Public Utilities Commission.

The standard offer bids, which were accepted by the commission Wednesday, will remain in effect through Aug. 31.

“These new prices will, unfortunately, create a burden for customers who have been unwilling or are unable to find suppliers in the competitive market,” said Tom Welch, the PUC chairman.

Under electric restructuring, standard offer service is the default supply for customers who have not purchased electricity from a competitive provider on their own or through an aggregator.

The new standard offer energy price will be 5.9 cents per kilowatt-hour for medium-sized businesses and 6.1 cents per kilowatt-hour for the large class in the CMP territory. In the Bangor Hydro territory, the rate will be 5.9 cents in the medium class and 5.8 cents for the large class.

That represents an increase of 25 percent to 35 percent for the energy component of the monthly bill; the overall rate increase when the delivery cost is taken into account is 10 percent to 20 percent, officials said.

Welch encouraged business customers to investigate whether they can obtain lower electricity rates on the open market.

The standard offer rate “is intended as a backstop. It is not intended to guarantee the best deal for customers at all times,” he said.

Residential and small business customers are not affected; the current rates of 5 cents per kilowatt-hour for those customers in both service territories runs through February 2005.