by AnnMarie Hilton, Maine Morning Star
With electricity rates in Maine twice the national average, a new study found that about 100,000 households in the state are struggling to pay their energy bills.
Those findings are from the annual report that the Maine Office of the Public Advocate submitted to the Maine Legislature’s Joint Standing Committee on Energy, Utilities and Technology. The citizen advisory council that commissioned the report also put forth recommendations for lawmakers to lessen the burden on low-income ratepayers.
The Electric Ratepayer Advisory Council, which was created by legislation in 2021, has 13 members representing customers, special interest groups and utilities across Maine, with five additional members representing state agencies. With its mandate to evaluate the affordability of electricity in Maine and advise on potential savings, the council commissioned two studies looking at costs for low-income households and competitive rates, both of which were summarized in its annual report.
Utility companies Central Maine Power and Versant Power are responsible for delivering and distributing electricity, linking consumers with the power suppliers. When it comes to how much that electricity costs, ratepayers default to the standard offer supply rate set by the Public Utilities Commission (PUC). But since 2000, consumers have had the choice to go with a Competitive Electricity Provider (CEP), such as Ambit Energy or Electricity Maine, and pay the price set by that company.
The advisory committee report argued that these alternative providers may be overcharging consumers and that low-income ratepayers are “more susceptible to exaggerated claims of energy savings” in CEP marketing, especially during times of high standard offer rates.
In 2023, more than three-quarters of residential customers using a competitive provider paid more for their electricity than if they purchased the standard offer service. The report also found that between 2016 and 2023, competitive providers charged households $135 million more than what would have been charged by the standard offer for electricity supply.
“Given the evidence that low-income households are especially vulnerable to overcharging for electricity by CEPs, it is clear that this is not a market that is benefitting Mainers,” said council member Shawn Lovely, who serves as plant manager at Pineland Farms Potato Company.
The annual report found that on average low-income ratepayers in Maine spend approximately 8% of their household income on electricity – double the 4% maximum recommended by consumer experts.
The report detailed how the PUC has stonewalled efforts from the public advocate to look at whether CEPs are overcharging ratepayers, including denying a request to access data and not taking action on a petition for the PUC to open its own investigation.
In its decision to deny the public advocate’s request to review the data, the PUC said that the public advocate does not have the authority to investigate CEP rates because it involved confidential information. Meanwhile, the case involving the PUC starting its own investigation is still ongoing.
Despite that, the report said that based on previous information, the advisory council suspects that higher costs from competitive providers is a key issue.
Late last month, the PUC announced it had set new standard offer supply rates for residential and business customers of Central Maine Power Company and Versant. According to the commission, the average CMP residential customer will see their monthly bill decrease very slightly while the average residential customer of Versant, using 500 kWh of electricity per month, will see a monthly increase of roughly $1.84.
Next steps
The advisory council laid out 20 recommendations for the Legislature that target the electricity supply market, assistance for low-income households and consumer education.
To further examine the electricity supply market, the council would like the public advocate to have access to data that would help determine how much low-income ratepayers are being overcharged by competitive electricity providers.
The council would also like to see an expansion of the Low-Income Assistance Program (known as LIAP) to provide more help to more low-income households. Specifically, the council recommends using the existing state sales tax on electricity to help fund LIAP.
The council also wants to see greater consumer education to help ratepayers be more efficient with their electricity usage to thereby reduce costs.
In a letter to the Legislature’s Energy, Utilities and Technology Committee, Public Advocate William Harwood said he hopes policymakers will “carefully consider these recommendations and seriously address the crushing burden today’s high electricity prices have on low-income consumers.”
“We should never put consumers in the untenable position of having to choose between paying their utility bills and providing needed food and medicine for their family,” Harwood said.
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