For a second year in a row, most customers of Central Maine Power will see their electricity supply rates rise in 2023, reflecting a trend driven largely by the high cost of natural gas that fuels many power plants in New England.

Beginning on Jan. 1, new “standard offer” supply rates for home and small business customers in CMP’s service area will rise from 11.8 cents per kilowatt hour to 17.6 cents, a 49% hike.

The PUC also selected bids for standard offer power supply in Versant Power’s Maine Public District, which is mostly in Aroostook County. The supply rate there for home and small business customers will change from 11.8 cents per kWh to 14.9 cents.

The rates were approved Wednesday by the Maine Public Utilities Commission, selected from an annual competitive bidding process that seeks the best deals from large power generators.

The state’s standard offer is the default supply for homes and small businesses that don’t sign contracts with a licensed competitive energy provider.

Wednesday’s outcome was not unexpected. A day earlier, the PUC approved standard offer bids for customers in eastern Maine served by Versant Power. For homes and small businesses, those rates will go up from 11.68 cents per kilowatt hour today to 16.44 cents in January, a 41% increase. That will add nearly $24 to a monthly bill, raising from $114.78 to $138.55 a month.

Roughly nine out of 10 home customers of both utilities are on the standard offer, PUC figures show. Larger customers are more likely to have contracts with competitive providers.

Neither Versant nor CMP generate and supply electricity; they only move it over transmission and distribution lines. CMP has roughly 636,000 customers and serves 80% of the state’s residential electric load, or amount of power on the grid. Versant has more than 159,000 customers and serves 13% of the residential load.

These standard offer rate increases are separate from the delivery rate hikes being sought by both Versant and CMP. Delivery prices make up the other half of a typical electric bill; CMP’s current delivery rate is 9.4 cents per kWh. Versant’s delivery rate is 11.6 cents in the Bangor Hydro District and 9.3 cents in the Maine Public District of northern Maine.

Taken together, these supply increases will hike a total CMP rate to 27 cents per kWh. Versant’s total rate will reach 28 cents per kWh in the Bangor area and nearly 26 cents in Aroostook County.

BIGGER BURDEN

Energy experts had been predicting for months that rates would rise to new record levels. It’s part of a trend that began last year with soaring wholesale prices for natural gas, made worse by  Russia’s invasion of Ukraine and New England’s unusual dependence on imported, liquefied natural gas to help fuel power plants in the winter.

These jumps aren’t isolated to Maine, a point stressed by the PUC. The agency noted that the average supply-only rate in New England this winter will be 17.4 cents per kWh, with rates in Massachusetts hitting a stunning 24.6 cents. New Hampshire and Vermont average roughly 18 cents, the PUC said.

These increases are so shocking for customers because only two years ago – after the pandemic had shrunk overall energy demand and fossil fuel prices plummeted – electricity supply rates were especially low. Then things changed dramatically.

In CMP’s service area, standard offer supply rates rose 83%, from 6.4 cents per kWh in 2021 to 11.8 cents in 2022. Combined with a 9.4 cent delivery rate, it brought the total rate to 21.2 cents per kWh, and a typical home bill from $96.50 to $126 a month in 2022.

Last autumn, Versant’s Bangor-area customers saw the standard offer rate jump by 88%, from 6.2 cents per kilowatt hour in 2021, to 11.6 cents in 2022. That added roughly $30 a month to the bill in a household using 550 kWh. When combined with a delivery rate of more than 11 cents per kWh, it brought the total rate to 23.3 cents per kWh, and raised a typical home bill from $101 to $131 a month.

Following Tuesday’s decision, Versant Power released a statement saying it wanted to help customers handle the increases.

“We’re launching an educational information campaign about benefits that may help with electricity cost via our social media channels and in a bill insert that will appear in January,” the company said.

The pending increases in electricity supply are an unwelcome addition to the overall increase in the cost of keeping buildings lit and warm, and getting around. Experts call it the household energy burden.

Heating oil prices have continued their steady rise in November, with the statewide average reaching $5.71 a gallon last week, according to the Maine Governor’s Energy Office survey. K-1 kerosene, which has been in short supply, was averaging $7.07 a gallon. Although at record levels, Maine’s average prices are the lowest in New England, the agency notes.

The energy office is promoting an online resource guide with tips and contacts to help Mainers get through an expensive winter. It can be downloaded from the agency’s web site.

Average gasoline prices were $3.95 a gallon earlier this week in Maine, according to GasBuddy, 52 cents higher than a year ago and on track to be the highest ever during the busy Thanksgiving holding travel weekend. Average diesel prices were at $5.34 a gallon, a key cost of trucking goods and a factor contributing to inflation.

This story will be updated.