Concerns Over Rate Increase - Part 3

Published: Jan. 26, 2022 at 8:07 PM EST
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In our continuing series on concerns over the recent rate increase for electricity, Brian Bouchard takes a look at the Standard Offer bidding process, and how exactly they determine the price.

“As far as I’m concerned, the Standard Offer is bogus. What makes them think that the best one for our neck of the woods is New Brunswick Power, well you can’t get them answers, the only way to get them answers would be to basically hire a lawyer for a Freedom of Access letter” - Judy Moreau – Portage Lake

“And I apologize, sometimes it’s hard to get to certain information, but it’s all there. All the contracts related to standard offer end up on our website and are available for people to look at. So that’s certainly public information, now I will say that our request for proposal process, bidders can request that information be kept confidential and we normally do do that” says Harry Lanphear – Administrative Director, MPUC

Looking over the Maine Public Utilities Commission website uncovers a hoard of information regarding the bidding process. Although it is not front and center on their website, the information is all publicly available.  WAGM did dig further and found another document called the Standard Offer Disclosure Label, which outlines exactly what method of electricity generation from New Brunswick Power flows to Northern Maine. There are two mixes shown, the supplier’s mix and the New England mix.

Susan Faloon – Media Liaison, MPUC

“The supplier’s mix applies to Versant’s Maine Public District, and that is coming from New Brunswick Energy Marketing. The New England mix is just a snapshot, if you will, of what the mix is in the region.”

Brian Bouchard - Reporting

Okay, so that leads to my follow up question of, if you look at the supplier’s mix, how does an increase in natural gas prices correlate to an increase in electricity rates for the Maine Public District.

Susan Faloon – Media Liaison, MPUC

“…Um, that’s a good question”

And that’s the question that is on the minds of many in Aroostook County. If the Standard Offer Disclosure Label is accurate, then the power that Aroostook County receives from New Brunswick Power is generated through hydro, wind and coal.

In other areas of the state, such as Versant’s Bangor Hydro District, or CMP’s district, Natural Gas makes up a significant portion of how their supplier generates electricity. So why are those on the Maine Public District grid, in Northern Maine, being charged for the costs of electricity suppliers in Southern and Central Maine?

“The price gets set based, if the standard offer is 12 cents in the Central Maine Power territory, or a weighted average of Versants Bangor District and Central Maine power’s is 12 cents, then the standard offer in the Maine Public District is 11 cents or something like that. It’s a formula like that. But the reason why they do it that way is that ultimately New Brunswick is interconnected with New England and the marginal prices for electricity to New Brunswick Power are no different than the marginal prices available to Southern New England” says Andrew Landry – Deputy Public Advocate, Maine Office of the Public Advocate

In summary, the power provided to Northern Maine by New Brunswick Power is made up of hydro, wind and coal. Yet the standard offer price for electricity was raised by a marginal 84% increase due to energy providers in Southern and Central Maine costs for Natural Gas. Despite the fact that the electricity received from New Brunswick Power in the County is not generated from Natural Gas. According to Andrew Landry of the Maine Office of the Public Advocate any change to how the state determines the standard offer would have to be developed through policy and legislation.

Brian Bouchard, NewsSource8

In the next part in our series on concerns over the rate increase, we will look at electricity relief and assistance programs.


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