Typcal home customers of Central Maine Power Co. will see their overall bills go up just over $2 a month beginning Sept. 1, following approval Tuesday by the Maine Public Utilities Commission of a rate-case settlement.

The settlement, which was proposed by the utility and endorsed by key business and environmental parties, also “decouples” the revenue CMP earns from electricity sales. It adopts a formula that gives the utility an incentive to participate in the state’s energy-efficiency programs, rather than promote electric sales in an attempt to boost earnings.

It also throws out a controversial bid to get customers who generate some of their own power from solar and other renewable sources to pay higher monthly service charges.

The vote was 3-0.

An average CMP home customer pays $78 a month now for a total bill that includes energy and distribution charges, so $2.07 more a month represents less than a 3 percent increase. That figure is lower from the $3 a month that was initially projected, thanks to funds being returned to ratepayers from federal charges for nuclear waste storage.

The settlement agreement, called a stipulation, deals only with the costs of distributing electricity from the street to homes and businesses. It doesn’t include the costs of building large transmission lines or for energy supply.

CMP was seeking $41 million in new revenue, but the stipulation shaves that request to $24 million on a rate base of $782 million.

The proposal brings to a head a 14-month proceeding that included 1,400 requests for data and two public hearings. Roughly a dozen major parties and a handful of citizens formally intervened in the case. All the major parties, which included the Conservation Law Foundation, Natural Resources Council of Maine, GridSolar LLC, Industrial Energy Consumer Group and the Maine Independent Colleges Association, signed on to CMP’s proposal.

“It’s a small step in lining up the monthly customer charge with the cost of service,” said John Carroll, a CMP spokesman. “Our cost of service isn’t totally dependent on what most customers use, because there’s a fixed cost to providing the service and keeping it reliable.”

AARP Maine, the advocacy group representing Mainers 50 years and older, issued a mixed reaction to the decision.

“CMP’s original $41 million rate hike proposal was too much and the settlement agreement approved by the PUC lowered it to $24 million,” said Lori Parham, AARP Maine state director. “AARP believes that Mainers should only pay what is fair and reasonable for their utilities – not a dime more.” AARP Maine testified at both public hearings in April, in Hallowell and Portland. It submitted statements from over 390 customers who signed an online petition concerning CMP’s proposal.

“Many older residents, a third of whom rely solely on Social Security for their income, already have to make tough choices between heating their homes, putting food on the table, and purchasing needed medications,” Parham said.

Under the settlement, the fixed monthly charge, which is the amount billed prior to any usage, will increase from $5.71 to $10. That disproportionately hits customers who use the least electricity, often the elderly and those with lower incomes, AARP said.

The increase in the fixed monthly charge also was opposed by the Environment Northeast advocacy group. It took issue with a rate-design change that will increase charges for home customers who have below-average electric demand. The group said that sends the wrong signal about conservation and efficiency. It chose not to sign the stipulation.

CMP initiated the proceeding in May 2013, to increase its distribution rates and decouple revenue from power sales, among other things. It also had sought to renew its five-year “alternate rate plan,” the performance-based method by which the PUC has set rates since 1995.

But the parties couldn’t agree on the alternate plan’s merits, and the concept was withdrawn in favor of a conventional rate case. The new rate will remain in effect until CMP files another request.

A key element of the stipulation drops CMP’s request for so-called standby charges for renewable energy.

Those charges were aimed at homeowners and large institutions, including several of Maine’s private colleges that have installed solar-electric panels. When those customers are generating their own power, they’re not buying it from the grid. That hurts CMP revenues. CMP wanted to charge those customers a special rate to reflect the fact that even though they aren’t buying power all the time, they expect CMP to provide them with reliable distribution services.

Standby charges are an issue in some other states. And they struck a nerve with Maine’s renewable energy industry, which turned out with its supporters to protest at the public hearings.

Also dropped from the case was an attempt to recover $55 million for a new billing system in rates. That issue will become part of a future case. The system is expected to become operational in 2017.

Tux Turkel can be contacted at 791-6462 or

[email protected]

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