ELLSWORTH — Electricity rates for customers in the Emera Maine Bangor Hydro District may rise again next year.
On Friday, Emera officials filed a request with the Maine Public Utilities Commission (PUC) to increase distribution rates by around 18 percent beginning in 2020.
If the increase is approved, the average residential bill for a consumer using 500 kilowatt hours per month would go up around $5.75, according to Emera.
The request comes on the heels of an announcement that Emera Inc. had reached a deal to sell its interest in Emera Maine to Canadian giant ENMAX Corp., meaning that the new rates will likely take effect under a new company. (There is no word yet on whether there will be a district name change).
If Emera’s rate request is approved, the overall increase in a consumer’s total monthly bill would be roughly 7 percent, because delivery costs are just one element of an electric bill.
Under Maine’s 19-year-old electricity restructuring law, companies such as Emera and Central Maine Power only deliver power. They don’t generate and sell it, meaning bills differentiate between the cost of delivery and supply.
The request comes on the heels of a separate increase approved by the commission in December of last year. That increase came not as a request from Emera but from the supply side.
Emera Maine was formed in 2010, after Bangor Hydro-Electric Co., which Emera Inc. bought in 2001, merged with Maine Public Service Co.
Although delivery rates in the Bangor Hydro district fell the year of the merger, regulators have approved delivery rate hikes for residential customers in six of the past nine years since then, according to an Ellsworth American analysis of PUC data.
Overall, residential delivery rates in the district have increased roughly 27 percent since 2008, while the cost of supplying electricity has come down 7 percent in the same timeframe.
Both sides — supply and delivery — are regulated by the state, although delivery companies (Emera and CMP) are more tightly regulated than supply companies, of which there are more than 200.
So why is it becoming more expensive to deliver electricity but less expensive to generate and supply it?
It’s “complicated,” said PUC spokesman Harry Lanphear in an email.
“Supply prices reflect conditions in the New England wholesale market,” Lanphear said.
“Wholesale electric energy prices relate very closely to natural gas prices, which have trended downward over the last several years,” he continued, “most notably as a result of the availability of shale gas from, for example, Marcellus.”
But, Lanphear noted, those prices have started to rise in recent years “because of constraints on pipeline capacity to get that gas to the region.”
Delivery costs in the area have gone up, Lanphear said, because of the cost of building new high-voltage transmission infrastructure, such as poles, wires and meters.
“The increases in transmission include Maine’s share of the regional high voltage transmission system, which has been on the rise in recent years due to the costs of new transmission infrastructure identified as needed to address reliability needs in the New England region,” Lanphear said.
Storm damage, inspection programs and new billing systems also have driven up the cost of delivering power, Lanphear said.
In the letter, Emera officials wrote that the estimated $16 million it expects to raise from this increase will go toward “investments in system reliability, customer service, and operations.”
Judy Long, spokeswoman for Emera, said that in Hancock County the money from the rate hike would go toward investments including upgrades to the Blue Hill substation and removing “danger trees” that could fall on lines and cause outages.
The company also is looking into ways to restore power more quickly during outages, Long said.