Hearing on Bangor Hydro rate request set for Thursday

Electricity meters outside an apartment building in Bangor.
Gabor Degre | BDN
Electricity meters outside an apartment building in Bangor.
By Matt Wickenheiser, BDN Staff
Posted March 15, 2011, at 8:13 p.m.

BANGOR, Maine — The public will have a chance Thursday night to talk to state officials considering Bangor Hydro Electric Co.’s request to increase a portion of the monthly electric bill.

The company is required to get approval from the Maine Public Utilities Commission for its so-called “stranded costs” every three years, according to Karen Redford, vice president of corporate and legal affairs. The public hearing is part of that approval process. It’s set for 6 p.m. Thursday, March 17, at at the Richard E. Dyke Center for Family Business at Husson University.

Bangor Hydro is seeking a 26.6 percent increase in the stranded cost. The stranded cost portion of a consumer’s monthly electric bill is between 10 and 15 percent, according to Gradon Haehnel, manager of rates at the company.

That requested change would translate to an increase in $1.38 a month for average residential customers in stranded costs.

But the supply portion of the bill, which makes up about 50 percent of the charges, is decreasing. That translates into a $2.65 a month decrease in supply costs for average residential customers.

The net result for residential customers will be a monthly decrease in the overall bill of $1.27, Haehnel said. That’s an average 1.4 percent drop, he said.

Medium and large commercial customers will see an average 0.8 percent increase in the overall bill, he said.

The stranded rates portion of the bill is the result of the deregulation of the electric industry in Maine. Under the laws that prompted the deregulation, companies weren’t allowed to own both power generation and transmission systems in Maine.

Bangor Hydro has several long-term contracts in place for power generated by third parties in Maine. But under deregulation, using that power would be regarded as owning generating capability, so is illegal. Under state law, Bangor Hydro has to sell access to those contractors through a bidding process.

Because supply costs have come down, Bangor Hydro can’t sell access to those contracts for as much as it had in the past. So its “stranded costs” increase.

According to Haehnel, about 75 percent of Bangor Hydro’s stranded costs are related to a 1984 contract with Penobscot Energy Recovery Co. in Orrington. The contract is due to expire in 2018, he said. Other contracts that make up the stranded cost also will eventually expire.

http://bangordailynews.com/2011/03/15/business/hearing-on-bangor-hydro-rate-request-set-for-thursday/ printed on October 1, 2014