Sen. Vitelli introduces bill to decrease volatility of utility rates

AUGUSTA — On Thursday, Sen. Vitelli introduced a bill to reduce the volatility and uncertainty of utility rates. LD 987, “An Act to Promote Electricity Price Stability for Standard-offer Service” was the subject of a public hearing before the Legislature’s Energy, Utilities and Technology Committee.

“We all remember that most recent hike in prices, which along with inflation, made Maine people worry about heating and electricity costs all winter long. Soon after the 131st Legislature began, the Legislature acted swiftly to pass an emergency winter heating and housing relief package to provide immediate, albeit short-term, relief,” said Sen. Vitelli. “This bill seeks a longer term solution that would reduce price volatility and provide some regulation to the market. For as long as we continue to depend on fossil fuels, we will need to help protect the Maine consumer from high swings in the costs of natural gas and heating oil. LD 987 can help us achieve that goal.”

LD 987 would authorize the Public Utilities Commission to designate one or more standard offer service providers to provide standard-offer service for a term of up to 10 years. This change lengthens the timelines for the standard offer contracts for the PUC, allowing the Commission to enter into longer term contracts, which will ultimately lead to less uncertainty and volatility in the standard offer rate and rates that consumers pay.

For two years in a row, standard offer prices increased – first by 80 percent on Jan. 1, 2022 and then by 40 percent on Jan. 1, 2023. The standard offer price is a significant portion of the total monthly electricity bill: For a typical customer using 550 kWh, their bill increased $31.98 a month, from $122.59 to $154.58. 

The Maine Public Advocate, William S. Harwood, who testified in favor of the bill, said that after the most recent rate hike, his office received 400 calls from consumers in February. That call volume is nearly four times the amount the office normally received in a month. 

The bill faces further action in committee.