Maine pulls out of electric rate talks

PORTLAND – Maine utility regulators said Tuesday they have withdrawn from settlement talks for a proposed electric rate plan for New England, saying they cannot accept increases that would give energy companies an unjustified windfall.

“With electricity supply prices at historic levels, Maine consumers cannot stand another federally imposed rate hike,” said Kurt Adams, chairman of the Maine Public Utilities Commission. “At some point you have to vote with your feet, and that’s what we did today.”

The Federal Energy Regulatory Commission has been holding talks for months in Boston and Washington to resolve differences over the plan proposed by ISO New England, the regional grid operator in Holyoke, Mass.

ISO has been pressing for a new “locational installed capacity” or LICAP charge to encourage generators to stay in business and to encourage construction of new generators, especially in parts of the region that are short on power.

Adams said the proposed settlement would add hundreds of millions of dollars a year to the profits that energy companies are pulling out of the region at a time of record high electricity rates. “There is no way Maine’s working families can afford this rate hike,” he said.

The biggest impact would be felt in Maine, he said, because the state’s electricity restructuring act directed utilities to sell off their generating assets.

“Because we do not have generation assets to ‘hedge’ the impact of the rate hike, Maine consumers take the hit worse than any other state in New England,” Adams said. Under the proposed settlement, consumers in Maine could see electricity rates rise between 5 percent and 10 percent over the next four years, he said.

“This state followed the federal government’s lead and totally deregulated our electricity markets. If FERC accepts this settlement and thereby punishes Maine for restructuring, it will be a clear message that they have abandoned the nation’s experiment with electric power sector deregulation,” Adams said.