Frigid cold snap last winter explains why Mainers electricity bills will be so high next year

A cold snap that froze much of North America in February is partly to blame for the surge in natural gas prices that are pushing up the cost of electricity for Mainers next year.

The Maine Public Utilities Commission announced this week that most residential customers of the state’s two main electric utilities will see the electricity supply portion of their bills increase by more than 80%.

Electricity bills are divided between the distribution part which goes to the public service and the supply part which goes to energy producers.

Residential Versant Power customers who purchase the standard offering will see the price of their power supply increase by 89%, from 6.2 cents per kilowatt hour to 11.68 cents. The new rate will take effect on January 1 and will remain in effect until 2022.

Residential and commercial customers of Central Maine Power Co. who purchase the standard offering will see their supply rates increase by 83% next year, with the price of electricity rising from 6.45 cents per kilowatt hour to 11.82 cents per kilowatt hour. .

Typical customers of both utilities using 550 kilowatt hours per month can expect their bills to increase by about $ 30 per month, or $ 360 for the year.

Rising natural gas prices are one of the main factors behind rising electricity costs, according to the Maine Public Utilities Commission. Natural gas prices in the spot market last month were 70% higher than in the first half of 2021, and Maine’s electricity supply, which is unregulated, is subject to market prices which can fluctuate .

In addition to the constant rise in natural gas prices, another factor contributing to the rise in energy costs is a cold snap last February that hit most of the country, when extreme weather conditions resulted in severe weather conditions. Natural gas production freezes and inventory disruptions that still reverberate, according to the US Energy Information Administration.

In response to the cold snap, some suppliers had to purchase natural gas at higher than expected spot market prices and then passed them on to customers through higher retail prices, the federal agency said in a report from March.

Domestic energy production has also declined in recent months, leading to a shortage of natural gas supply that has put pressure on the product and led to a corresponding rise in prices, said Charlie Summers, president of the Maine Energy Marketers Association. .

“When there is less natural gas, then it drives the cost of demand,” Summers said, driving demand for other sources like oil, “which powers everything from power plants to home heating systems. through gasoline “.

“It’s kind of a perfect storm in that regard,” he said.

Since taking office in January, President Joe Biden has canceled plans for a number of pipelines and temporarily blocked new permits to drill on public land, citing campaign pledges to shift states’ energy dependency. -United towards more climate-friendly options.

Maine has the lowest average electricity price of any New England state, but “the price increases are due to volatile global energy markets and will push too many Maine people to seek deeper into their pockets this winter to pay their bills, ”said Dan Burgess, director of the governor’s office of energy.

The utilities commission selected the bids for power supply to Versant and CMP customers through a competitive process, and the commission announced the results of those bids this week.

Although Versant does not generate or supply its own electricity, it bills on behalf of suppliers, so customers look to the company to understand how their bills are itemized and priced, spokeswoman Marissa Minor said.

Minor urged residents to contact Versant if they needed help paying their new electricity rates.

“We can explore payment plans as well as financial assistance opportunities through low income and debt relief programs,” she said.

The governor’s office also stressed the importance for Mainers to air-condition their homes before the cold months to save money on heating.

Governor Janet Mills authorized $ 25 million to help low-to-moderate-income residents cover the costs of insulating and weatherproofing their homes with US bailout funds. An additional $ 70 million is available through community action programs such as the Penquis and MaineHousing Home Energy Assistance Program to help Mainers pay their heating and electricity bills.

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