June 13, 2023

Hallowell, Maine- The Maine Public Utilities Commission (Commission) approved recovery of stranded costs for Maine's two Investor-owned Electric Utilities today. In two separate cases, the Commission approved new Stranded Cost rates for Central Maine Power Company (CMP) and Versant Power. Stranded costs include the impacts of long-term contracts for renewable power as well as the net energy billing programs created by the Legislature to facilitate the transition to renewable power. These programs are primarily made up of residential and community solar projects with above-market costs that are a contributing factor to the rate increases below.

The new rates for these stranded cost cases will go into effect July 1, 2023, and will impact the total bill for an average residential customer as follows:

-CMP: An increase of about 5.8% or $5.95 per month -Versant Bangor Hydro District: An increase of about 9.3% or $8.77 per month -Versant Maine Public District: An increase of about 5.6% or $5.47 per month

"As with the recent distribution rate increase, we understand that any increase is not ideal and comes at a time when people are already impacted by inflation," said Commission Chair Philip L. Bartlett II. These costs are the result of policies enacted to advance Maines transition to renewable energy and help achieve Maines climate goals. Its important to note that while we are seeing an increase in the short term, reducing our dependence on fossil fuels and the associated greenhouse gas emissions through projects like community solar have significant benefits, helping to drive down costs over the long term and increasing resiliency in our distribution system.

All public documents in the cases are available on the Commissions Online Case Management System. Please reference:

-2023-00039 CMP Annual Stranded Cost Rate Case -2023-00076 Versant Power Annual Stranded Cost Rate Case

Background

Stranded Costs make up a portion of electric delivery rates and are the costs associated with generating electricity, which in most cases Maine utilities no longer are allowed by law to do. Prior to electric restructuring in 2000, Maines electric utilities generated electricity as well as delivered it. Following electric restructuring, utilities were required by law to sell their generating assets. The cost of those assets, otherwise known as pre-restructuring costs, is recovered by utilities through stranded costs, which are included as part of the total delivery costs on your monthly bill. As those obligations have been paid down, the related stranded costs have become negligible.

Stranded costs also include costs and benefits related to long-term contracts for electricity generation that have been acquired through state policy since restructuring (post-restructuring costs), for example, contracts for renewable energy, costs associated with community renewable energy contracts, Renewable Portfolio Standard (RPS) contracts, and NEB programs.

Net Energy Billing (NEB)

In 2019, the Commission implemented its Chapter 313 Rule on NEB to implement the State's policy to encourage electricity generation from renewable resources through the adoption of requirements and standards for NEB. The state policy, and therefore Commission rule, significantly expanded the States existing NEB program.

NEB programs allow customers to offset their electricity bills using the output from renewable generators. Maine offers two NEB programs. Through the kWh program, customers may own their own project or share in a project with other customers, otherwise known as community solar. Customers reduce their billed usage by their share of the kWhs generated by the project, resulting in lost revenue which must be recovered from other utility customers.

The Tariff Rate program is available to commercial and institutional customers and provides a financial credit on the bill of participating customers. When the value the utility receives from the sale of energy through this program is less than the financial credit it allocated to participating customers bills, the net cost must be recovered from ratepayers.

About the Commission

The Maine Public Utilities Commission regulates electric, telephone, water and gas utilities to ensure that Maine citizens have access to safe and reliable utility service at rates that are just and reasonable for all ratepayers, while also helping to achieve reductions in greenhouse gas emissions. Commission programs include Maine Enhanced 911 Service, gas safety and Dig Safe. Philip L. Bartlett, II serves as Chair, Patrick Scully and Carolyn Gilbert serve as Commissioners.

Learn more about the Commission at www.maine.gov/mpuc/

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CONTACT: Susan Faloon, Media Liaison CELL: 207-557-3704 EMAIL: susan.faloon@maine.gov