AUGUSTA, Maine — Maine’s public advocate wants to scrap the competitive process for electricity vendors for residential consumers, saying the current competitive system has failed to produce lower rates.
Residential customers statewide would be better served if they all used the same “standard offer” rate produced by a competitive bid process, Public Advocate William Harwood said Wednesday.
As it stands, 90% of residential customers use the “standard offer” and many of the remaining 10% who opt to choose their own vendor usually end up paying more, Harwood said.
In many cases, low-income Mainers are being taken in by promises of lower rates but they often end up paying more. One vendor is currently charging more than double the current standard offer, he said.
“When you see a low-income Mainer paying more than the standard offer, that just breaks your heart,” he said.
In Maine, electric bills are divided into two parts. The transmission component is the part that’s billed for utility infrastructure for which consumers have no choice, while the electricity is a separate component in which companies can compete for business.
Mainers are already suffering from sticker shock after the standard offer rate grew from 6 cents to 18 cents per kilowatt hour on Jan. 1.
But many Mainers are paying even more than that, Harwood said. One vendor is charging a whopping 39 cents per kilowatt hour to thousands of electric customers in the state, he said.
“This is part of the problem in depending on a competitive market. When it doesn’t work, it’s a real frustration for everybody,” he said.
Harwood said it would be better for all residential customers to use the standard offer produced by a competitive bidding process overseen by regulators. And that process should be updated to reduce volatility, he said.
The report will be provided to the Maine Legislature's Energy, Utilities and Technology Committee in hopes that lawmakers will adopt some or all of the recommended changes, he said.