By Sen. Trey Stewart
AUGUSTA – Versant Power filed a request with the Maine Public Utilities Commission to increase their distribution and transmission rates beginning next summer. The rate case filed Monday seeks an increase of about 32 percent, which would affect ratepayers by about 10 percent since only half of your bill is attributable to delivery costs.
Hello, this is Senator Trey Stewart of Aroostook County. While it’s never a great thing to talk about increased costs, it is my pleasure to join you for this week’s Republican Radio Address.
Ratepayers across the state took it on the chin in January when rates for the supply side of your bill went up by an average of 80 percent. For many small businesses, those rates rose as high as 300 percent in January over the previous year; and much of that increase had to do with the Biden Administration’s energy policies and disdain for the energy sector.
And if Biden wasn’t bad enough, the liberal policies of Maine’s Governor and Democrats in Augusta have made matters worse, such as the requirement to buy more expensive energy – even if we don’t need it. This isn’t what ratepayers bargained for or deserve.
On the supply side, Maine has been affected much like of the country by the price of natural gas – a major fuel source for about 53 percent of New England’s power generation. Prices doubled in 2021 from what they were a year before and are even higher so far this year, according to the U.S. Energy Information Administration.
As the Maine PUC is in the process of sorting out bids for next year’s rates, our electric rates are already 57 percent higher than the U.S. average; and we saw what happened last week when the PUC approved Summit Natural Gas’ rate case that will double their customers’ gas supply costs this winter. So, no, there’s no good news on the supply side of things – it’s obvious where this is headed.
And while it may seem like a slap in the face to consumers, Versant cited rising costs of their own in the request to increase their distribution rates. Their request comes amid a similar rate case filed by Central Maine Power in August to increase their delivery rate as well.
According to Judy Long, Versant’s communications manager, the utility company is facing the same inflationary pressures that have affected everything from grocery costs to menu prices at your favorite restaurant. Versant has already absorbed higher fuel and equipment costs and a tight labor market in attracting highly skilled electrical workers. And much of the aging infrastructure that includes obsolete meters and substations built 60 to 70 years ago are now at the end of their useful life.
Long said Versant is also dealing with the dual threat of losing paying customers, which means those who remain have to shoulder more of the company’s fixed operating costs. The recent news that Pixelle Specialty Papers will close their mill in Jay is such an example.
For both CMP and Versant, the loss of high-load commercial or industrial customers like the Jay Mill or Verso’s shuttered mill in Bucksport means that cost sharing has naturally been shifting to residential consumers for years. And renewable energy participants in the State’s net-energy billing program represent yet another problem that is accelerating.
When the Democrat-led Legislature passed net-energy billing through LD 1711 in 2019, it was an attempt to jumpstart our path toward renewable energy. However, it’s now obvious that unintended consequences from those policies are growing and affecting our power companies and ratepayers.
As more residential customers install solar panels, that means the credits they earn on their bill wipes out the delivery cost they would have normally paid. Ultimately, that cost is also shifted to the remaining customers who must cover it.
And according to Versant, the problem is only going to get worse. The Legislature needs to fix that.
Let me be clear: Republicans aren’t against renewable energy sources like solar. We’re against overpaying for tiny amounts of solar when we could get much more at a competitive price for Maine’s people. This is both smart energy and climate policy and beneficial to ratepayers. There’s a smart way and a dumb way to do renewables in Maine—we should strive for the smarter solution.
While people have directed their anger toward our power companies for the supply rate increase we saw in January, it’s misplaced – that’s a Biden supply issue and a liberal policy issue. Instead, we should realize that companies like Versant and CMP are required by law to maintain a reliable power infrastructure at the lowest cost possible. The difference is they can’t raise their prices like other companies have without State approval.
Nobody likes higher prices – especially me; and my work in the Legislature on the Energy Committee has largely circulated around lowering costs. Maine people deserve to know the underlying drivers of these costs and the impact that bad policies can have. We need to get our energy house in order, develop a real long-term plan, encourage smart renewable sources and prioritize ratepayers. By doing so, we can protect both the climate and ratepayers’ budgets.
Again, this is Senator Trey Stewart of Aroostook County. Thank you for listening in and I do hope you have a great weekend.
Senator Trey Stewart is in his first term representing the Aroostook County and Penobscot County communities of District 2. He is the Senate Republican Lead for the Health Coverage, Insurance and Financial Services Committee, as well as the Energy, Utilities and Technology Committee.