December 16, 2017
Business Latest News | Poll Questions | Net Neutrality | Robert Burton | Opioid Epidemic

Electricity seller gives Maine government a deal while small customers pay above-market rates

By Darren Fishell, BDN Staff
Updated:
George Danby | BDN | BDN
George Danby | BDN | BDN
Companies promising electricity savings to Maine homeowners have instead cost them millions since ramping up operations in 2012, a Bangor Daily News investigation has found.

The electricity seller that’s charged Maine households at least $36 million above the standard rate is, at the same time, saving Maine government hundreds of thousands of dollars.

Electricity Maine since January has supplied a range of state government offices with power at 6.1 cents per kilowatt-hour, lower than the standard rates for customers of the state’s two major utilities.

State government awarded Electricity Maine the roughly $4.5 million contract earlier this year, through competitive bidding to supply 73.5 gigawatt-hours of power to hundreds of state buildings.

The deal is significant for Electricity Maine, valued at about 6.5 percent of its annual revenue from residential and small commercial customers last year, which fell about 20 percent from $85.8 million in 2015.

The company changed hands in 2016, through a purchase by the Houston-based Spark Energy, which owns competitive electric and gas companies around the country.

The price compares favorably with the nearly 11 cents per kilowatt-hour Electricity Maine offers to residential customers, but the state accounts aren’t directly comparable to the average household. The state contract doesn’t break out how much each of the 924 accounts will use during the year, but the average power consumed from them is far higher than the average residential customer.

It’s not clear how the price compares with other similarly sized business customers for Electricity Maine, as the company provides individualized quotes on electricity for all but its residential customers. Like other commodities, sellers can often provide lower unit prices for bulk purchases.

Representatives for Electricity Maine did not respond to requests for comment on the disparity in prices between the state contract and residential plans.

The typical residential customer doesn’t have the benefit of that type of purchasing, which has led to generally higher prices when Maine households enter their own contracts with an electricity seller rather than taking the standard rate negotiated by state regulators.

A Bangor Daily News investigation found residential customers have paid about $50 million more than they needed to by signing supply contracts with companies such as Electricity Maine.

[How electricity providers siphoned millions from Maine customers]

Those companies, called competitive electricity providers, came into being after Maine restructured its electricity markets in 2000, breaking up utility monopolies by separating companies that generate power from those that build and maintain the grid.

Central Maine Power Co. and Emera manage only the poles and wires that send power around the state, but they handle customer billing for their service and competitive suppliers.

Until 2011, those suppliers focused exclusively on larger commercial and industrial customers, who stand to save more by shaving even fractions of pennies off the unit price of their electricity.

The state’s power deal is higher than the state’s previous arrangement with TransCanada, but still stands to save government about $300,000 this year compared with the standard offer prices for both major utilities, Central Maine Power Co. and Emera Maine.

 


Have feedback? Want to know more? Send us ideas for follow-up stories.

You may also like