PORTLAND, Maine — Electric bills will drop in southern Maine by more than 13 percent in March, driven largely by falling oil prices that have knocked down the price of electricity on the wholesale market.
About 443,000 residential customers of Central Maine Power Co. will pay 6.54 cents per kilowatt hour, compared with the current rate of 7.56 cents per kilowatt hour.
Tim Schneider, public advocate at the Maine Public Utilities Commission, said the surprising low bids for CMP’s standard offer rate came as “very welcome news” and an economic boost for most customers, many of whom also have seen falling heating oil prices.
The drop is a surprise after state officials raised concerns that Maine’s standard offer bids early this year would follow a trend set in Massachusetts and Connecticut, where residential customers in the last bids saw prices rise by double-digit percentages.
“If you had asked me a month and a half ago what we would be talking about today it would be very different,” Schneider said.
Medium-class users, including small businesses, also will see a decrease of about 17.3 percent for the 10-month period from March to December.
Standard offer rate bids for about 122,000 residential customers in Emera Maine’s Bangor Hydro Electric territory will be issued Wednesday.
In a release from the Maine Public Utilities Commission, Chairman Mark Vannoy said that recent trends in wholesale energy markets have driven down prices from the winter but it’s hard to tell whether those will continue. Those trends include falling oil prices.
But the lower price also reflects that this year’s bids will help the commission to shift to a new normal for Maine energy consumption, where the winter time rather than the summer represents the period of peak demand on the grid.
Vannoy said during deliberations Tuesday that the idea is to move the bids closer to the time of peak usage so bidders can make their most accurate bids for the period of the peak, minimizing the amount of “risk premium” that power generators incorporate into their bids.
“We will shift the bid window to the fall to be closer to the period of peak prices,” Vannoy said.
As a result, the commission will solicit new bids this fall that would cover the full calendar year of 2016 and reflect power prices for the peak winter season that otherwise would have been included in the latest bid.
With the latest bids, the PUC did not accept any bids for the residential time of use program, which charges lower amounts for power used at off-peak times of day, when demand is lowest.