Federal Energy Regulatory Commission rejects change to Aroostook County electric rates

    AUGUSTA, Maine – Governor John E. Baldacci learned June 5 that the Federal Energy Regulatory Commission has rejected a proposed rule change that would have increased utility rates in northern Maine.
Baldacci sent a letter to FERC in May asking that the proposed rule be rejected.
    “Aroostook County has already been hit with a 45 percent increase in electricity rates. If this change had been allowed to happen, the County would have been hit again,” Baldacci said. “I’m relieved that FERC has taken the appropriate action, and my administration will continue to fight any unreasonable rate increase.”
Baldacci was joined in protesting the rule by Kurt Adams, chairman of the Public Utilities Commission, state Sen. John Martin (D-Aroostook) and state Rep. Jeremy Fischer (D-Presque Isle). The four participated in a conference call on May 4 denouncing the proposed rule change, and the PUC filed a formal protest on the same day.
“If this idea had been allowed to go forward, Aroostook would have seen another rate increase of nearly 8 percent,” Fischer said. “That’s more than we can afford.”
On April 13, the Northern Maine Independent System Administrator (NMISA) filed a proposed rule change with FERC that would result in a 7.6 percent rate increase for electricity prices of Maine Public Service Co. customers. Over the 26-month term of the standard offer, the increase could exceed $3.5 million. In the rule change request, NMISA claims that the changes will not impact rates but offers no explanation to support this claim.
In November 2006, the PUC rejected all standard offer bids for northern Maine. Citing that only one retail bidder participated, the PUC found the bids inadequate and declared a market failure.
In December 2006, the PUC accepted a standard offer bid for Northern Maine. The rejection of the original standard offer bid forced the supplier to resubmit an offer at a lower price than had originally been submitted, yet a price still higher than the expired standard offer price. In fact, standard offer rates increased 45 percent effective Jan. 1, with a smaller rate increase effective July 1. The current standard offer rate for residential use is 7.89 cents/kWh and will increase to 8.25 cents/kWh in July.
     Senators applaud decision     
WASHINGTON, D.C. – U.S. Sens. Olympia J. Snowe and Susan Collins are applauding the Federal Energy Regulatory Commission’s ruling denying a requested rule change that would have raised electricity rates in northern Maine for the second time this year.
“We are pleased that the Commission listened to our concerns and ruled for Maine consumers,” Snowe and Collins said in a prepared statement. “We remain concerned about the underlying electricity issues plaguing ‘The County,’ but the Commission’s timely review of this situation prevented the citizens of Aroostook County from paying even higher prices for their electricity.”
The Northern Maine Independent Systems Administrator operates the power grid in northern Maine. The Administrator was seeking changes to a FERC requirement for electricity suppliers regarding extra capacity. The Commission denied the request last week.
Consumers serviced by Maine Public Service Co., the electricity provider in northern Maine, saw their rates increase by as much as 45 percent in January. Had FERC approved this latest rule change, electricity rates for those same consumers would have, in addition, increased by an estimated 7.6 percent.