Second Consecutive Week of Positive News Amidst Rising Inflation.
In a welcome relief for Central Maine Power (CMP) customers, the utility has announced a 4% reduction in the average residential electric bill for the upcoming year. This adjustment, primarily attributed to a decrease in the transmission rate for electricity delivery, comes as the second consecutive announcement of reduced rates in as many weeks, providing a respite for consumers grappling with the ongoing effects of inflation.
Starting January 1, 2024, CMP’s delivery price will drop to 11.7 cents per kilowatt-hour from the current 12.2 cents. The delivery rate is a crucial component of electric bills in Maine, covering the cost of local and regional transmission services. Jon Breed, spokesman for CMP, explained that this rate is determined by a complex formula developed by ISO-New England, the regional grid operator, and the Federal Energy Regulatory Commission (FERC). The FERC rate, common across New England utilities, is updated annually, and this year’s update has resulted in a reduction, Breed added.
Just two weeks ago, the Maine Public Utilities Commission approved a 2024 standard offer rate for the supply portion of electric bills, representing a 35% decrease from current rates. The standard offer rate applies to nine out of 10 residential and small-business customers who do not contract with competitive energy providers. The combined impact of the reduced supply and delivery rates is expected to save the average CMP standard offer customer approximately $35 per month.
In June, state utility regulators approved a separate rate increase for CMP, set to take effect in July. This increase, just over 1% or $1.67 for a typical home, includes provisions for upgrading the distribution grid to enhance reliability, mitigate storm damage associated with a changing climate, and support clean energy investments. Despite this increase being separate from supply and delivery costs, the recent reductions in transmission and distribution rates result in a “net negative” for customers heading into 2024, according to Breed.
Overall, these adjustments reflect a positive trend for CMP customers, offering financial relief and potentially offsetting the impact of previous rate increases. The reduction in electric bills aligns with ongoing efforts to balance the needs of consumers, utility infrastructure upgrades, and the transition towards cleaner energy sources.
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