As competition increases in the residential electric supply industry in Maine, the Maine Public Utilities Commission (MPUC) wants to educate consumers about how competition works.
How did Maine come to have competition in electric supply?
The law that required the restructuring of the electric utility industry in Maine was passed in March 2000. This change provided Maine consumers with the ability to choose their electricity supplier – the company that supplies their electric energy. Until 2000, a single utility company, regulated by the Commission, supplied and delivered electricity. With electric restructuring, Maine began to develop a competitive market for electricity supply. This market developed quickly for larger commercial and industrial consumers, who have several choices for their electricity supplier. Many small consumers, like residential and small businesses, are also now able to choose their electricity supplier.
Customers without a choice, or those who do not wish to choose, are automatically provided with Standard Offer Service.
Delivery service is still provided by the local utility (now called a distribution company), such as Bangor Hydro Electric, Central Maine Power, Maine Public Service, or one of Maine’s consumer owned utilities.
What is a competitive electric provider (CEP)?
A CEP is a company that supplies electricity to Maine’s residences, businesses and other entities that use electricity. Each CEP is licensed by the MPUC and CEPs compete for business by offering lower prices, renewable energy options, or other incentives.
What are the benefits of competition in electricity supply?
Shifting to a CEP could lower a customer’s rate on the supply portion of their bill or could support other policies (such as developing renewable energy).
Why is this information important now?
CEPs have recently begun to actively market their service to small commercial and residential customers in Maine. This contact has been in the form of television, radio and newspaper ads, as well as marketing telephone calls.
How do customers choose an Electricity supplier?
All customers may choose their electricity supplier either by selecting a CEP or remaining on the Standard Offer default service. For a list of suppliers, go to the MPUC’s on-line supplier list at http://www.maine.gov/mpuc/. Customers can compare an offer from a CEP with the Standard Offer rate by reviewing their bills (if they are on the Standard Offer), or by visiting the MPUC’s website to see the current standard offer. Once a residential or small commercial customer has enrolled with a CEP, the CEP is required to provide a “Terms of Service” document to the customer within 30 days. This document is required to contain information relating to price, contract terms, resource mix, and emissions. CEPs are also required to provide customers with the right to rescind the contractual agreement within 5 days of the customer’s receipt of the terms of service document.
How can customers make sure they have the electric supplier they want?
Consumers should make sure only the provider they have chosen, or the standard offer provider appear on their bill.
Customers can take the following steps to avoid unauthorized changes, and, if your service is somehow switched without approval, to catch the problem quickly:
Read your bill. An important step to catch an unintended or unauthorized electric supplier change quickly is to read your bill thoroughly each month. If you see you are receiving services from a company you have not selected, call that company and tell them you dispute the change of your electric supply service to their company. You should then contact your electric utility or your CEP to ask to be switched back to them. Finally, you can call the MPUC to file a complaint against the CEP that enrolled you without your authorization.
Ask questions if you are contacted by a CEP or are considering changing to a CEP:
- What will I pay per “kilowatt hour” (kWh) of electricity?
- Are there any additional customer charges or other recurring fees?
- Is this offer a fixed rate offer? If not, how can it change, and how do I find out when, and by how much, the rate will change?
- Is there a contract? If so, how long is it for?
- Is a deposit required? If so, how much?
- What are my payment options?
- What happens when my contract period expires?
- What if I miss a payment?
- Is there a penalty if I break the contract?
If your company operates in more than one state, or electricity grid, you might also be operating in both regulated and deregulated energy markets. When you are making decisions about purchasing energy, it is important to know the difference between these markets and develop a plan that will make sure your company gets the right renewable energy solution.
Electricity markets are highly diverse.
In a regulated electricity market, vertically integrated monopoly utilities cover the entire value chain with oversight from a public regulator. The utility makes sure that power is generated, sent to the grid, and reaches customers. Customers in regulated markets cannot choose who generates their power and are bound to the utility in that area. Regulated markets dominate most of the Southeast, Northwest and much of the West (excluding California).
In a deregulated electricity market, market participants other than utility companies own power plants and transmission lines. In such instances, generators (companies that generate electricity) sell electricity into a wholesale market, and retail energy suppliers purchase this electricity to sell it to customers. Transmission companies or utilities own and operate the transmission grid. This market universe is managed by an independent system operator (ISO) or regional transmission organization RTO. Your utility company is still around – It makes sure the power is distributed and everything is working correctly to keep your lights on.
Deregulated markets have opened up generation for competition from independent power producers in 24 states, such as California, Texas and most states in the Northeast. 18 of these states and Washington D.C. have also introduced retail choice, which allows residential and/or industrial consumers to choose their own electricity provider. Customers benefit from more competitive rates and generation options, including renewable energy.
It is important to note that the market is not split clearly between regulated and deregulated states. Some states, like California, are partially regulated markets. This is due to the nature of the grid, historic reasons and the geographic boundaries of utility territories in neighboring states.
So, your company wants to get renewable energy. What does this mean?
As part of the Renewable Energy Buyers Alliance (REBA), World Resources Institute recently launched a Corporate Strategy Map to help corporations identify some renewable energy solutions (mainly retail choice options and utility green tariffs) in different states.
Still, if your company is located in a regulated state, developing a large-scale renewable project inside your state and claiming renewable energy use is challenging, and may not be possible at all. In regulated states, most renewable energy projects are utility-owned. Furthermore, few utilities offer green pricing programs that fully meet the Corporate Buyers Renewable Energy Principles of cost-effective and impact renewable power.
The good news is that even if you are located in a regulated state you can still engage in renewable energy, either on your own or aggregated with other organizations. Your company can use “indirect” physical or financial contract structures by entering into a Power Purchase Agreement (PPA) with an offsite project located outside your state. Your company can then claim the benefits of this renewable energy by retaining ownership of project-specific renewable energy certificates (RECs). Your existing grid power supply arrangement will stay in place, while your company is helping green the grid in the U.S. and receiving environmental and economic benefits from a renewable energy project.
If you are located in a deregulated state, there are more options, some of which include incorporating renewables directly into your retail supply contract. Your organization can also aggregate demand with others to create a larger impact project than you would have accomplished alone. Furthermore, in a deregulated state, there is increased flexibility around the structure of the contract, the location of the project, and the scale of selected renewable source.
Bottom line: The value proposition associated with large-scale renewable energy projects – lower costs, reduced future price risk, lower GHG and other strategic benefits – is available, no matter the regulatory regime for your organization’s U.S. footprint.
|California||Deregulated for some commercial & industrial consumers*|
|District of Columbia||Deregulated|
|Georgia||Deregulated for some commercial & industrial consumers*|
|Michigan||Deregulated for some commercial & industrial consumers*|
|Oregon||Deregulated for some commercial & industrial consumers*|
|Virginia||Deregulated for some commercial & industrial consumers*|
*States may be partially regulated/deregulated, regulated only in some utility markets, or deregulated for industrial consumers. Additional information available at the American Coalition of Competitive Energy Suppliers.Read More
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