Versant Power customers may see price increase next summer

Published: Aug. 4, 2022 at 4:26 PM EDT
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BANGOR, Maine (WABI) - Versant Power customers may see prices increase next summer by $10 a month or more.

Gov. Janet Mills is calling on them not to file the rate request.

Company officials just announced a few hours ago they are seeking a distribution rate change.

They say it’s to “continue maintaining and improving customers’ access to electricity in northern and eastern Maine.”

Average residential customers would see about a $10.50 increase per month.

Some things Versant wants to do are replace their metering system, deteriorating cables to island customers, and to build a new substation in Machias.

Mills says while the improvements are important, the timing comes at a time when rates are already high.

She says she will direct her Energy Office to intervene in opposition and call on the Maine Public Utilities Commission to reject the request.

The Maine Office of the Public Advocate also released a statement Thursday expressing doubt that a 9% rate increase is warranted.

They say the timing is unfortunate with Mainers already struggling to pay high energy costs and the increases in cost of living.

They will be looking for evidence this rate hike should not be passed on to ratepayers.

Statement from Versant Power:

After Versant Power’s careful evaluation of what we must do to continue maintaining and improving customers’ access to electricity in northern and eastern Maine, we are seeking a change in distribution rates beginning in the summer of 2023.

With plan to use these funds to:

  • Replace our metering system, which has reached the end of its useful life
  • Replace deteriorating cables that provide electricity to customers on islands off the coast of Maine
  • Build a new substation in Machias, improving reliability and replacing equipment near Bad Little Falls with a more environmentally friendly solution
  • Continue our work to improve reliability in the Old Town/Orono area
  • Install additional equipment in northern Maine to prevent tree-related outages and reduce the impact and duration of outages that do occur
  • Make continued improvements to our tree trimming program to reduce the number of power outages and harden the system against storms
  • Invest in our technology, keeping customer and other sensitive data secure
  • Retain quality employees in a competitive labor market

For the average residential customer using 500 kilowatt-hours per month, this change would mean an increase of about $10.50 per month. For a customer using 750 kwh, it would result in a $15 to $16 increase, and for 1,000 kwh, an increase of about $21.

If this rate change is approved, Versant Power will still offer distribution rates and total average residential bills that are lower than most comparable New England utilities.

Like all businesses, Versant Power has been affected by price increases and labor market pressures. However, we’ve continued to implement more sophisticated technology to inspect our equipment, ensuring we keep the costs of repairs, replacements and improvements as low as possible. Those technologies include drones as well as ultrasonic and acoustic assessments.

Versant Power is deliberately not seeking an opportunity to earn greater return on investments as part of this request.

All Versant Power customers will receive a letter that includes information about how they can stay informed and involved in the Maine Public Utilities Commission’s evaluation of our request. The process for a distribution rate change is subject to nearly a year of review and allows customers and stakeholders to weigh in on the potential change. Versant Power expects a rigorous review of our request.

This request involves a change to the distribution rate, one of five rates that make up customer bills. Versant Power seeks permission from the Maine Public Utilities Commission or the Federal Regulatory Commission for any change to transmission or distribution rates, which represent the cost to bring electricity from where it is made to your home or business.

Versant Power recognizes the importance of continued investment in the reliability and resiliency of the system as Maine moves toward greater electrification of its economy and integration of more renewable resources.

For more information about the request, visit the Distribution Rate Request page on our website or connect with us on Twitter, Instagram, or LinkedIn.

Mills’ office released this statement:

Governor Janet Mills today announced her opposition to Versant Power’s notice of intent to file for a rate increase. In its notice, the utility says it will seek a $10.50 monthly increase – or about $126 a year – from the average residential ratepayer in its service area of Maine starting in the summer of 2023. Versant’s filing comes at a time of record-high electricity rates, and follows a filing made earlier this year by Central Maine Power seeking a nine percent rate increase starting in 2023, which Governor Mills has also pledged to oppose.

“Improvements to our electric system are an important part of maintaining a strong grid, but the timing of such improvements – and the costs associated with them – must be weighed against the already high electricity prices that Maine people, like people across New England, are being asked to pay,” said Governor Janet Mills. “With high prices expected to continue into the coming year – which is almost entirely the result of New England’s dependence on expensive, imported natural gas – I do not believe now is the appropriate time for our utilities to seek further rate increases. I ask Versant to not to file this request, but, if they do, I will direct my Energy Office to intervene in opposition and call on the Maine Public Utilities Commission to reject the request.”

Transitioning Maine to renewable energy to reduce energy prices, along with helping Maine people and businesses with increased electricity and heating fuel prices, are priorities of the Mills Administration.

As a result of bipartisan legislation signed by Governor Mills in 2019, Maine has advanced competitive renewable energy procurements that have resulted in 24 renewable energy projects to deliver low-cost, home generated power to Maine ratepayers.

The low-cost renewable energy from three of these projects already in operation resulted in the Maine Public Utilities Commission in June approving electricity rate reductions of 5.5 percent for CMP customers and 4 percent for Versant Power customers.

If all 24 projects under this law were operational in 2022, the Governor’s Energy Office estimated that Maine ratepayers would have saved 22 percent on electricity compared to the current standard offer.

On energy costs, the Mills Administration has taken several significant actions this year, including:

  • Returning more than half of the state’s budget surplus to Maine people through $850 inflation relief checks;
  • Pressing for increased funding and expanded eligibility for Federal heating assistance programs to help Maine households with oil bills this winter;
  • Securing a one-time bill credit of $90 for tens of thousands of low-income customers of Central Maine Power and Versant;
  • Providing $800 in heating cost relief to nearly 13,000 low-income households to help pay for high energy costs;
  • Providing up to $1,400 in tax relief for eligible low- and middle-income Maine families and seniors;
  • Signing into law LD 2010, sponsored by Senate President Troy Jackson, that will make a tiered credit of up to $3,000 available to Maine small businesses to offset increases in the standard offer for electricity;
  • Through her Maine Jobs & Recovery Plan, Governor Mills has invested $50 million in Federal funds to expand energy efficiency programs for Maine homeowners and renters, hospitality businesses, and municipal and school buildings through Efficiency Maine.

The Governor and Legislature have also strengthened the accountability and oversight of Maine’s electric utilities. Governor Mills this year signed historic legislation to significantly reform the state’s approach to utility oversight. This legislation, LD 1959, sets minimum service standards for service, increases penalties for substandard service, and strengthens the accountability of utilities to protect Maine people.

The Maine Office of the Public Advocate release this statement:

The Maine Office of the Public Advocate (OPA) today expressed doubt that a 28% distribution rate increase for Versant Power is warranted. This translates to 9-10% of the total billed amount on a residential bill.

The company, which serves five Maine counties covered by the Bangor Hydro and Maine Public power districts, today filed notice with the Public Utilities Commission (PUC) that it intends to request a rate increase of nine percent. Versant now has 60 days to make its formal request to the PUC.

“The timing of Versant’s proposed increase is unfortunate,” says Maine’s Public Advocate William Harwood. “Mainers are already struggling to pay high energy costs, including the January 1st increase in standard offer prices of more than 80%. Now, Versant looks to increase the average residential bill by $10.50 per month.”

The OPA will be evaluating Versant’s justification for its $30 million requested rate increase. Harwood says his office will look carefully for any evidence of imprudently incurred costs which should not be passed on to ratepayers.

“The nearly 160,000 families served by Versant already are struggling under the burden of increases in the cost of living,” added Harwood. “The last thing they need is for their electric bills go up by nine or percent.”

Versant Power is owned by Enmax Corporation, a utility company based in Canada.

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