Utility seeks rate increase Electricity distributor cites higher insurance

BANGOR – Maine Public Service is asking a state regulator for permission to raise its electricity distribution rates by 8.9 percent or an estimated $1.59 more a month for the typical household using 500 kilowatts.

The northern Maine utility notified the Public Utilities Commission that it would file a new rate plan next week, and negotiations of that plan would start in late March. If approved, the rates would take effect in the summer.

In its letter to the PUC, Maine Public Service officials cite rising health care costs and the impact the Sept. 11 terrorist attacks had on property and casualty insurance rates as the reasons for the proposed rate increase.

“As a result of the terrorist attack on the World Trade Center, property and casualty insurance for electric utilities have skyrocketed,” said Brent Boyles, vice president of marketing and customer service. “Our cost for property and casualty insurance has more than doubled since 1991. Since our last rate increase in 1998, the cost of medical insurance for our employees has almost doubled, increasing in total cost by approximately $1 million per year.”

The company also told the PUC that it has been affected financially by a significant increase in the number of customers who have filed for bankruptcy and by the continued loss of population in the region.

Under the proposed plan, Maine Public Service would outline rates for each of the next seven years while it adheres to specific service quality standards. If the standards aren’t met, the company could face fines from the PUC.

Only distribution rates would be increased under the plan, according to the company. Currently customers pay 7.36 cents per kilowatt-hour for distribution. The price does not include the price of electricity or stranded costs.

Most consumers in Maine Public Service’s territory pay a standard offer rate for electricity, which is the default rate that is charged when a customer hasn’t chosen another power supplier. The standard offer rate, which is set by the PUC, is 5.8 cents per kilowatt-hour starting Saturday, up from 5.68 cents.

“While we are making every effort to limit the required increase, it is essential that we maintain our ability to provide the continuing quality of service deserved and expected by our customers,” said J. Nick Bayne, president and chief executive officer, in a statement.

Maine Public Service, based in Presque Isle, is an investor-owned electric transmission and distribution company traded under the symbol MAP on the American Stock Exchange. It serves Aroostook County and a portion of Penobscot County.