Legislative Republicans issue statement regarding release of PUC’s Standard Offer rate for 2024

Reduction in electricity supply rates still leaves the Standard Offer 79% higher than December 2021, with more increases from net energy billing on the way

STATE HOUSE – The Maine Public Utilities Commission (PUC) announced Tuesday that the Standard Offer, the price most residential ratepayers pay for the supply of their electricity, will drop in January 2024 to 10.763 cents per kilowatt-hour (kWh) for Versant’s Bangor Hydro District (BHD). However, the drop comes amid the 7% average jump in residential rates seen in July as the state begins the recovery of hundreds of millions of dollars of solar subsidies.

New Standard Offer rates for Versant’s Maine Public District (MPD) and Central Maine Power (CMP) were announced on Wednesday. For Versant’s MPD, the residential Standard Offer rates will drop from 14.9 cents/kWh to 11.285 cent/kWh for 2024. CMP’s residential rate, which is currently the highest of the three, will go from 16.6 cents/kWh to 10.836 cents/kWh and drop below Versant’s MPD.

For Maine ratepayers, next year’s reduction largely puts rates back where they were in 2022. All told, the new residential Standard Offer for both companies as of January 2024 will still be nearly 79% higher than 2021’s average rate of 6.2 cents/kWh.

This doesn’t include another anticipated rate jump in July 2024 as the state continues more solar subsidy cost recovery – including the state’s net energy billing program. Those costs are expected to cost Maine ratepayers about $4 billion over the next 20 years, or about $220 million per year, according to Maine Public Advocate William Harwood.

According to the Maine PUC, the jump in the Standard Offer last year was the result of elevated prices in the natural gas and petroleum markets, both of which have been adversely affected by the Biden Administration’s ongoing war against fossil fuels. Unfortunately, the effects of those policies reached the household level of the economy and have affected the thing everyone needs most – power.

In October 2022, wholesale natural gas prices stood at $5.66 per million British Thermal Unit (BTU), according to the U.S. Energy Information Administration. Since then, prices have dropped by about 47% to $2.98/million BTU last month.

However, the wholesale cost savings wasn’t fully realized in the rates announced this week by Maine PUC Chair Philip Bartlett since the amount required to come from more expensive renewable sources, called the Renewable Resource Portfolio Requirement, increases from 11% in 2023 to 15% for 2024.

“We should have seen a steeper decline in rates, but the continued march toward more expensive renewable energy is costing Maine ratepayers far more than what we should be paying. These ‘Green New Deal’ policies and the choices we’ve made regarding solar subsidies continue to hurt Maine families,” said Senate Republican Leader Trey Stewart, R-Aroostook. “With heating oil still near $4 per gallon along with the looming increases we’ll soon be seeing from solar subsidies and net energy billing, our energy costs will only get worse and need to be addressed by the Legislature.”

Bartlett didn’t offer much during either meeting except that energy supply would be purchased for Versant’s BHD and CMP from three companies, one at 50% of the load while two others share the other half evenly. Although three bidders are statutorily preferred, he said Versant’s MPD will only have one supplier.

“High energy bills are the result of the government’s deliberate purchase of more expensive energy sources at the expense of lower cost alternatives,” said House Republican Leader Billy Bob Faulkingham, R-Winter Harbor. “Mainers continue to pay more of their hard-earned money for no measurable benefit. That is reflected in today’s announcement, where the temporary reduction should have been even larger. Republicans will continue to press for policies that lower energy costs and provide relief to Mainers struggling to live here.”

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