By Z. Perry
March 9, 2023

Many Maine business owners and other individuals saw their electricity bills skyrocket in early 2023. Several factors have contributed to these price hikes. Fortunately, you can still take steps to significantly reduce this expense.

Natural gas

Public Utilities Commission Chairman Phil Bartlett recently explained that higher natural gas costs had triggered increases in electric rates. Maine's power plants consume more gas than any other fuel, according to the Energy Information Administration. The war in Ukraine, trade sanctions and various supply limitations have contributed to the rising price of this commodity.

Severe weather

Increasingly strong storms also affect Maine's electricity rates. They damage utility equipment and necessitate costly repair work. As the Portland Press Herald points out, Central Maine Power often needs to pay contractors from Canada and other states to help restore power. Strong winds caused widespread outages multiple times during December and early 2023.

Although she notes that weather buoys in Penobscot Bay reported stronger winds in the years since 2013, the author of a 2021 PenBay Pilot article couldn't find conclusive data to prove that winds have consistently increased in Maine. Researchers have yet to thoroughly collect and analyze state wind data, so information on long-term trends isn't readily available.

Rising demand

Nationwide power consumption set new records in 2018 and 2021, according to Reuters. While some types of equipment became more efficient in recent years, population and economic growth resulted in greater usage of electricity. Like most commodities, electric power becomes more expensive as a result of increased demand.

State approval

The state government has approved rate hikes requested by utilities like CMP and Versant. Fewer regulations apply to competitive electricity providers (CEPs), so their price increases did not require approval. At the same time, the state has introduced electric bill credits to assist small businesses, charities and low-income residential customers.

Utility pricing

Although Maine's utilities clearly face higher expenses, this doesn't mean that pricing is entirely beyond their control. They determine how much of these costs to absorb and what portion to pass on to customers. The shareholders of their parent companies influence these decisions.

What You Can Do

Business owners can take action in several ways:

1. If you use a competitive electric provider rather than the Standard Offer, be sure to compare current rates and examine your latest bill. Some suppliers promote low introductory prices only to raise their rates to amounts much higher than the Standard Offer. However, be aware that your CEP may charge a termination fee if you sign a contract and stop using the service before the end of the contract period.

2. Before establishing a new business location, consider the local electric rates. Central Maine Power and Versant offer slightly different pricing, but neither option is consistently less expensive. Kennebunk, Madison and Houlton have publicly-owned utilities with substantially lower rates. The right location could yield significant savings for an energy-intensive business.

3. Take steps to conserve power. Every device adds to your electric bill, but you may achieve the greatest impact by focusing on pieces of equipment that draw the largest amounts of energy. Examples include water heaters, electric furnaces, space heaters, baseboard heating units, dryers, air conditioners, vehicles and certain tools. Try to use all of these machines less often and for shorter periods of time.

A microwave oven generally consumes less power than an electric stove. You could also consider using a slow cooker or toaster oven. Multiple parking lot lights and illuminated signs can add up to significant power consumption. Adequate lighting is important for safety and security, but it doesn't need to be excessively bright and should shut off as soon as there's sufficient natural light.

4. Think about upgrading to more efficient materials and equipment. If your business uses conventional electric heat, reduce your utility bill by installing a heat pump. Efficiency Maine offers commercial heat pump rebates. You may still need the existing heaters for especially cold weather. Consider replacing old windows and adding insulation to your attic if necessary. Traditional electric water heaters can benefit from timers and tank insulation.

Higher electricity rates represent a significant challenge for many Maine residents. The trends contributing to this change appear unlikely to reverse in the near future, so it's important to reduce energy consumption and take steps to improve efficiency.

© 2023. Details are subject to change.