Maine regulators approved a rate increase for Emera Maine Tuesday morning, but less than the utility originally requested.
The Maine Public Utilities Commission’s chairman and two commissioners said the distribution portion of a customer’s bill could be raised 5.34 percent, or a total of $4.48 million in revenue across all customers, as of July 1, 2018. Emera had originally asked for a 12 percent increase, or $10 million across all customers. The distribution part of the bill is the cost to get electricity to consumers.
“Most of the difference between the request and what was granted is because of the tax cut act,” said Judy Long, spokeswoman for Emera.
She was referring to the federal Tax Cuts and Jobs Act that took effect January and created a different interest rate for corporations. That change caused Emera’s service costs to decline. The tax act was passed after Emera’s initial rate filing in October 2017.
The 5.34 percent distribution rate hike translates into about $1.60 per month based on 500 kilowatt-hours of typical residential use, according to Emera. The initial 12 percent request would have more than doubled that amount to $3.60 per month.
The current rate hike was controversial, with AARP, among others, opposing what they said was the third rate increase request in five years.
“AARP Maine is extremely disappointed that the PUC chose to approve this latest rate increase, and is dismayed that the Commissioners increased the rate even more than the PUC staff recommended,” said Lori Parham, AARP Maine’s state director. “Many customers, particularly those who are older and on fixed incomes, will find any rate increase to be a cause of hardship. Emera Maine’s coverage areas include some of the state’s most rural and low-income communities.”
Parham was referring to the commission staff’s recommendation of a 5.28 percent increase. However, the commission increased that to 5.34 percent in its ruling Tuesday.
Emera filed the 12 percent rate hike request to support improvements in service and reliability.
“Remember that this is just the distribution component of a customer’s bill, so the impact to the overall bill will be less,” said Harry Lanphear, administrative director of the utilities commission. “The formal [rate] order will be issued fairly soon.”
Customer electric bills are made of five rates. Transmission and distribution rates are the cost to bring electricity from where it is produced to a home or business. The conservation rate supports Efficiency Maine programs. Stranded costs are left over from deregulation and represent the cost of state programs and long-term power purchase contracts. And the fifth rate is for electric supply. The default rate is the standard offer service but customers can choose their own electric supplier.
In separate rate processes, Emera also will update transmission, conservation and stranded cost rates on July 1.
The utility plans to release information within the next week detailing the complete impact for residential customers of all rate changes that take effect July 1.
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