Maine's residential electricity consumers are likely in for a jolt, with supply prices coming close to doubling and adding hundreds of dollars to annual residential bills.
On Tuesday the Maine Public Utilities Commission opened bids for the default, standard offer electricity supply for customers served by Versant's utility lines. The lowest bid for supply to start flowing next year was 89% higher than this year.
"It's not a good news story, that's for sure," says Phil Bartlett, who chairs the commission.
Bartlett says that next year's rates are being driven by a national and even worldwide mismatch between energy supply and demand heading into winter, with prices for fossil fuels jumping up.
"What we've seen is wholesale markets in the region have been trending upward," he says. "That's largely driven by increases in the price of natural gas. We are still very dependent in our electricity production on natural gas, and so when there are big swings up or down in natural gas prices, we bear the brunt of that. The last two years we've had lower natural gas prices that have benefited consumers; this year we're going in the opposite direction."
Bartlett says typical Versant residential customers who take standard offer supply can expect bills to rise as much as $30 a month. That's on top of a $5.50 a month hike regulators recently approved on the distribution side to finance investments in Versant's poles and lines.
Yet as the state's acting public advocate, Andrew Landry, notes, consumers aren't necessarily stuck with the standard offer for the entire year. They can opt to buy from a competitive supplier as well, and while he says their prices have been going up for similar reasons, consumers should keep a sharp eye on their offers as winter passes.
"One thing that I would expect to happen is after we get through let's say January and even February the competitive suppliers who are now past that hump of expected high prices may start reducing prices to steal customers from the standard offer," Landry says.
The advocate's office presents information on what competitive suppliers are offering on its website. Landry says lawmakers may want to take a close look at adjustments in the way standard offer bids are structured, to allow for longer terms and hedging that could protect against short-term spikes.
The Public Utilities Commission, meanwhile, is set on Wednesday to open standard offer supply bids for people served by Central Maine Power's lines. Observers say that similar bill hikes can be expected.