Central Maine Power Announces Annual Price Adjustments
For Immediate Release
Augusta, ME — July 1, 2019 — Central Maine Power Co. (CMP), a subsidiary of AVANGRID Inc. (NYSE: AGR) announced today the Maine Public Utilities Commission (MPUC) has directed an annual adjustment of overall electric delivery prices for all CMP customers in Maine effective July 1, 2019. When all components of the annual price adjustment are combined, the resulting change will add approximately $0.85 to the average residential customer’s monthly bill.
The adjusted rates comprise five components: distribution costs, stranded costs, Efficiency Maine Trust assessments, low income program assessments, and transmission costs, each of which are reviewed and adjusted through an annual compliance filing process.
A breakdown of the components is as follows:
|Type of Cost||Description||Increase/Decrease||Reason for Change|
|Distribution Costs||The annual rate adjustment addresses a limited set of distribution costs outside of the general rate case process. Generally, these are the costs associated with storm recovery and other adjustments.||Decrease||In its review of CMP’s annual compliance filing, the MPUC determined a decrease in distribution prices of approximately $23M. This is driven primarily by the completed recovery of costs from the October 2017 wind storm and the removal of roughly $19M of related costs currently in CMP distribution rates.|
|Stranded Costs||These are costs associated with long-term power contracts directed by the PUC and costs associated with CMP’s remaining interests in the decommissioned Yankee nuclear facilities.||Increase||This increase relates to the removal from rates of a large one-time credit associated with spent nuclear fuel litigation proceeds. The credit has now been fully refunded to customers.|
|Efficiency Maine Trust||This component of CMP’s rates funds energy efficiency initiatives provided by the Efficiency Maine Trust and the assessment level is established annually by the MPUC.||To be determined||The amount in rates effective July 2019 is $14.2 million, a decrease of $4.3 million from the $18.5 million amount in current rates. This 2019 decrease is due in part to the carryforward of unspent funds from 2018. Proceedings are ongoing at the MPUC to determine final funding amounts for 2019-2020, which are expected to increase.|
|Electricity Lifeline Program||These funds provide assistance to residential customers who qualify for the Home Energy Assistance Program.||No Change||CMP collects approximately $6.8 million in rates for this program.|
|Transmission Costs||These reflect an annual price adjustment for CMP’s transmission costs that are regulated by the Federal Energy Regulatory Commission (FERC) and established by a formula rate that is updated annually. Transmission cost collected in CMP bills cover the maintenance of the high voltage transmission grid in Maine and New England.||Increase||Increase of approximately 9% this year. This follows a price decrease of approximately 8.5% in 2018. The increase is set by the FERC based on CMP’s actual transmission costs and is automatically folded into CMP rates.|
Separate from this annual rate adjustment, CMP has revised its October 2018 rate case filing to seek an increase in electric distribution rates. It has been five years since the MPUC has reset these rates.
In its distribution rate filing, CMP proposes a revenue requirement increase of approximately $46.5 million. This would correspond to a 10.65% increase in CMP’s delivery rates for residential customers. For the average residential customer using 550 kWh per month, this would represent an increase in delivery rates of approximately $5.00 per month. CMP has proposed to minimize any distribution rate increases– distribution rates are a component of overall delivery rates – over 2018 distribution prices, to no more than the current projected 2019 rate of inflation of 2.21%. If CMP’s proposal is adopted, the impact of the requested increase on the monthly invoice for the average residential customer would be approximately $3.00.
The revised distribution revenue requirement accounts for additional staff in electric operations and customer service departments; investment in strengthening the grid – particularly in automation and circuit management; and improving tree care in rights of way to prevent outages. The current MPUC schedule for deciding CMP’s distribution rate filing calls for a Commission decision and resulting rate change in October.
As directed by the MPUC, and at the request of the Maine Public Advocate, CMP is mailing a letter to all customers advising them of the proposed rate request.
“CMP recognizes that these rate proposals come at a time when the company has come under scrutiny for the roll out of its SmartCare system in 2017 as well as questions about our handling of customer concerns at that same time,” said Doug Herling, president and CEO of CMP. “As outlined here, the rate changes reflect a host of factors, most of which are aimed at assuring reliable service, improved customer care, improved storm resiliency and better response time during storm outages. I ask our customers to continue to demand and expect quality response and service and hold us to the very highest standard. We are working to regain their trust.”
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About CMP: Central Maine Power Company (CMP), a subsidiary of AVANGRID, Inc., is Maine’s largest electricity transmission and distribution utility. Established in 1899, CMP serves approximately 624,000 customers across 346 communities in central and southern Maine. CMP operates approximately 23,500 miles of distribution lines and 2,900 miles of transmission lines; over the last decade the company has invested approximately $2.6 billion in Maine system infrastructure. In 2019, CMP was named Large Business of the Year by the Kennebec Valley United Way.
About AVANGRID: AVANGRID, Inc. (NYSE: AGR) is a leading, sustainable energy company with approximately $32 billion in assets and operations in 24 U.S. states. AVANGRID has two primary lines of business: Avangrid Networks and Avangrid Renewables. Avangrid Networks owns eight electric and natural gas utilities, serving 3.2 million customers in New York and New England. Avangrid Renewables owns and operates 7.1 gigawatts of electricity capacity, primarily through wind power, with a presence in 22 states across the United States. AVANGRID employs approximately 6,500 people. AVANGRID supports the U.N.’s Sustainable Development Goals, received a Climate Development Project climate score of “A-,” the top score received in the utilities sector, and has been recognized for two consecutive years by Ethical Boardroom as the North American utility with the “best corporate governance practices.” For more information, visit avangrid.com.