November 18, 2022 Op-ed former ME state Rep. Seth Berry Some politicians blame renewables. Others blame fossil fuels. Who’s right? What is the real reason for Maine’s increasingly disproportionate and regressive electricity rates — rates which, as they rise, threaten to slow heat pump and EV adoption, impeding our progress toward an electrified and decarbonized future? Both sides have a point, […]
November 18, 2022
Op-ed former ME state Rep. Seth Berry
Some politicians blame renewables. Others blame fossil fuels. Who’s right? What is the real reason for Maine’s increasingly disproportionate and regressive electricity rates — rates which, as they rise, threaten to slow heat pump and EV adoption, impeding our progress toward an electrified and decarbonized future?
Both sides have a point, but both are missing the real reason.
The bigger cost driver by far in our rising energy costs is corporate greed, and an energy system intentionally structured for maximum profit-taking.
It is true that we need more renewables — but they need to be low-cost renewables, delivered by a low-cost grid. After all, consider this: about 80% of the electricity generated in Maine is now renewable. We are already a leader in this respect. If “more renewables” is the answer, why are Maine’s rates now some of the highest in the nation?
For evidence that for-profit energy markets and for-profit utilities are the bigger problem, simply look at the electricity rates in the 56% of America served by consumer owned cooperatives. They are half as high.
Here are the rates, state by state, prior to this week’s announcement that in January, CMP and Versant total costs will be 40-50% higher, or nearly 30 cents per kWh. Below is a map of the US showing our many cooperatives, which you can cross check against the rate chart to see who is paying more and who is paying less. If you guessed that the rural, cooperative-loving heartland is enjoying lower prices than the for-profit-dominated northeast and California, you’re 100% correct!
And in Maine? Same story. Rates for Maine’s 97 towns served by consumer owned utilities are also half as high. And unlike CMP and Versant customers, most customer-owners of these COUs do not expect rate changes for several years. These Maine COUs are twice as cheap not because they’re smaller, but because they have a smarter business model. The cost of all capital investment that is passed on to ratepayers is half as much, there is no incentive for creative accounting to maximize profits because they are non-profits, and the cost of supply is mitigated due to greater local control over purchasing.
Below is the current chart from the Maine PUC of rates for all mainland utilities. (Offshore islands are extremely expensive to serve, since it is hard for them to connect to a larger utility). The mean residential rate for these utilities is 13.3 cents. Starting in January, CMP and Versant total costs (delivery + standard offer) will be close to 30 cents.
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