Versant Power truck. Credit: Nina Mahaleris / BDN

Versant Power wants to raise its electric distribution rates by more than 25 percent by the end of next year, which would increase bills by $8 a month for the average residential customer.

The utility that serves customers in Aroostook, Hancock, Penobscot, Piscataquis and Washington counties plans to file a request for the rate increase with state regulators on or after Jan. 18, Tim Pease, the company’s vice president of legal and regulatory affairs wrote in a letter to customers dated Tuesday.

The increase is “required to allow Versant Power to make necessary investments in system reliability, customer service, and operations,” Pease wrote, and would ultimately generate $21.6 million more annually for the utility.

Distribution rates are the section of electricity bills that account for the costs of transmitting electricity to homes and businesses. The company’s current distribution rates took effect in July 2018.

Versant plans to request that its rate increase take effect in two stages. A 12.7 percent increase would take effect on Oct. 1 of this year and another 12.7 percent increase would take effect Oct. 1, 2022.

Versant said the typical residential customer who uses 500 kilowatt hours of electricity per month would see a $4-per-month increase on Oct. 1, 2021 and another $4-per-month increase a year later. That extra $8 per month ultimately would add up to about $96 a year for Versant’s customers.

The company had chosen to increase the rates gradually due to the economic downturn caused by the COVID-19 pandemic, Pease said. It is asking the Maine Public Utilities Commission to apply all rate hikes equally to residential and business customers.

The rate hike request is the first since the Calgary, Alberta, utility ENMAX acquired Emera Maine last year in a $1.3 billion deal and changed the utility’s name to Versant Power.

The Public Utilities Commission approved the acquisition with a number of conditions, including one that prohibited Versant from raising rates until Oct. 1, 2021.

The commission would have to approve Versant’s rate increase request, or it could approve a modified version. Commission spokesperson Susan Faloon said that the three-member panel would not be able to comment.

“As with all rate cases, it will be carefully reviewed by staff before a decision is made,” Faloon said.