News

2/26/2010

New Standard Offer Contract

Eastern Maine Electric Cooperative has good economic news for its members in Eastern and Northern Maine.  The cost of electricity supply will drop on all electricity used starting April 1st, when a new Standard Offer supply contract will begin.  The first year of the new three-year contract, awarded to New Brunswick Power of Fredericton, New Brunswick, will lower the cost of electricity supply for Cooperative members from the existing rate of 9.15 cents per kiloWatt hour to 7.354 cents per kiloWatt-hour.  The decrease will bring a savings of 1.796 cents per kiloWatt-hour on electricity used beginning April 1, 2010.  

The new rate will result in a decrease of approximately 10% in the total residential electric bill and a 19% decrease in the standard offer supply portion of the bill.  For a family using an average of 600 kiloWatt-hours per month, the change will bring savings of $10.78 per month or $129.36 per year.  A business using an average 2000 kiloWatt-hours per month will save $35.92 per month or $431.04 per year.  Actual savings will vary depending upon the kiloWatt hours used.

There will be a slight change in the standard offer supply rate in years two and three.  In year two of the contract, the price per kiloWatt-hour for supply will be 7.637 cents, and in year three, the price will be 7.859 cents.

“We are very glad that our members will see a rate decrease,” said Co-op CEO Scott Hallowell.  “A reduction in costs to individuals and businesses should be helpful, particularly during the current economic times.”

One advantage of the three-year contract is that Co-op members will be better able to predict their electric costs for three years instead of just one.   “In these days of fluctuating oil and fuel prices, we’re striving to provide as much rate stability as possible,” Hallowell said.

The Standard Offer rate is selected through a competitive bid process.  Following the deregulation of Maine’s electric market, utilities like Eastern Maine Electric provide delivery service for the electricity sold to its customers by another company, known as the Standard Offer Provider. The delivery utilities are responsible for the power lines and perform the metering and billing functions for both delivery service and electricity supply.  The electricity supply billings, however, are forwarded to the Standard Offer Supplier.

As of April 1st, residential EMEC members will pay a total of 15.70 cents per kWh, which includes both delivery and supply.  For comparison, Bangor Hydro customers will pay a total of 17.15 cents/kWh, and Maine Public Service customers will pay 16.76 cents/kWh.  Central Maine Power customers will pay 14.83 cents, and Houlton Water Company customers will pay approximately eleven cents per kiloWatt-hour. The combination of a low supply rate, coupled with competitive delivery rates, puts EMEC members in a very good position, statewide. 

This is true even though EMEC has by far the most sparsely populated delivery territory in Maine.  Population density is a cost driver for utilities, since higher-density areas have more customers per mile of line to cover the cost of serving that line.

Back to News