Crews work to remove a large downed tree from power lines on Foreside Road in Falmouth on Dec. 18, 2023. Central Maine Power Co. is hiking rates in July to cover the $220 million it spent responding to storms over the last two years. Derek Davis/Staff Photographer

Central Maine Power Co. ratepayers can expect monthly bills go up by at least $10 in July after regulators approved a rate increase on Tuesday. 

The 2024-25 rate hike will cover a $220 million tab CMP racked up while restoring power and cleaning up after destructive storms in 2023 and the second half of 2022.

The decision by the Maine Public Utilities Commission came on the same day it approved a settlement between the state and CMP that modestly cuts the $117 million the utility is charging ratepayers to pay for storm recovery from the first half of 2022. The move was expected to shave pennies off the average customer’s monthly bill. 

As a part of that settlement, CMP agreed to more clearly demonstrate how it spends money on storm preparation and recovery and why ratepayers should be asked to foot the bill.

With climate change bringing more damaging and costly storms, the Public Utilities Commission said it will begin soliciting comments from the industry, consumers, environmentalists and others to look at ways to balance storm response with affordability, Chairman Philip Bartlett said.

The proceeding to be launched in the “near future” will consider whether grid hardening could reduce the frequency and duration of power outages and what steps the utilities can take to improve grid resiliency, Bartlett said.

Commissioner Patrick Scully said Maine is “obviously at a place” with more frequent and destructive storms. Rising costs to restore power “have become, frankly, enormous,” he said at a meeting of the PUC.

“This is really an appropriate time for us to take a very hard look at what we can do to strengthen the resilience of the system and also to find ways to restore service promptly at as reasonable a cost as we can,” Scully said.

Residential bills will rise by $10.29 a month, an 8% increase, for a customer using an average 550 kilowatt hours a month, a PUC spokeswoman said. Commissioners also reduced the standard offer price by 2 cents a kWh, or $1.10 a month, bringing the increase to $9.19 a month.

The PUC will rule this month on other electricity rates, such as those accounting for solar power subsidies, that will also take effect July 1.

Overall, residential costs for distribution, which cover the equipment required to move electricity to homes and businesses, will rise by 27% beginning July 1. Certain commercial and industrial customers will pay 26.9% more.

“It’s very challenging to announce publicly significant rate increases,” Scully said. “I can only say that with the hard work of our staff these underlying costs have been scrutinized very carefully and it’s unfortunate, but it’s necessary to make these adjustments.”

Regulators approved a separate agreement between CMP and the state Office the Public Advocate over storm recovery costs for part of 2022. CMP agreed to pare $850,000 from $117 million it was allowed by the PUC to collect from ratepayers. Public Advocate William Harwood accused the utility of overspending and failing to justify its spending. The agreement calls on CMP to improve record-keeping and make other administrative changes to justify its spending.

For the storms of 2023, CMP sought to recover costs from ratepayers of $161 million plus $17 million in borrowing costs for the required capital. The amount approved by the PUC also included $40 million for storm restoration in the second half of 2022 and $2.5 million in interest payments.

THREE TIER 3 STORMS

CMP said it faced costs of $120.4 million in three “Tier 3” storms, which are the costliest storms, at more than $15 million each. The utility paid about $1.6 million for such storms in the second half of 2022, the utility said. The utility also said it faced costs of $41.3 million for five Tier 2 storms that each cost between $3.5 million and $15 million.

Three particularly damaging storms battered Maine in 2023: A nor’easter in mid-March; an Atlantic storm that pounded a large part of New England and Maritime Canada in September, leaving one person in Maine dead; and a destructive wind and rainstorm Dec. 18 that killed four people and left 400,000 customers without power.

In the mid-March storm, CMP told regulators it spent $19.5 million, with most of it – $15.7 million – for work crews; $2.9 million for labor, benefits and overtime for CMP employees; and $641,310 for lodging, meals and miscellaneous expenses. The December storm cost $7.5 million, with about $5.3 million for contractors.

The higher rates are in contrast to approval by the PUC in November for lower 2024 standard offer rates, which are charged for the default supply for residential home and small-business customers who don’t contract for electricity with competitive energy providers. The lower prices reflect falling natural gas costs.

CMP said in its filing with regulators that the Industrial Energy Consumer Group, a business group, intervened and did not object to the 2023 rate case and that the Office of Public Advocate and Efficiency Maine, a quasi-state agency that promotes energy efficiency, signed the agreement, representing a “broad spectrum of interests.”

“Working together with all stakeholders in good faith is the only way to solve the significant challenges climate change has put in front of Maine families,” the utility said in a statement.