The Maine Public Utilities Commission has authorized Maine Public Service Co., a utility company serving Aroostook County, to increase its electric rates across the board by 3.9 percent.
The Presque Isle-based electric company had asked for a 7.6 percent rate increase late last year.
A portion of this requested increase — 2.75 percent — was pre-approved by the PUC in November 1995 as part of a four-year rate stabilization plan. The PUC originally approved the plan because it forces the company into a situation where it must become more efficient to retain profits, according to PUC spokesman Phil Lindley. It also creates rate stabilization, he said.
Much of the remaining 4.85 percent was to cover costs associated with lost power from the now-closed Maine Yankee nuclear facility, said Brent Boyles, manager of corporate planning at MPS.
Beginning Feb. 1, the utility will implement the rate increase, which will bump the average price per kilowatt-hour from 7.5 cents to 12 cents, said Boyles. A typical residential customer’s monthly electric bill for 500 kilowatt-hours will increase from $58.97 to $61.27, according to a company press release.
The new rate adjustment will not affect rates billed under the 7.5-cent electric space heating schedule, the company’s set winter month rate established for the estimated 1,300 residential customers who heat their homes with electricity, said Boyles. It will affect those same customers, though, in the area of general electricity consumption, for instance in running their refrigerators, ovens and lights.
The rate increase translates into an additional $1.9 million in annual revenues for MPS, according to Virginia Joles, communication director for MPS.
“The 3.9 percent increase is not much more than what was allowed under the rate stabilization plan,” said PUC spokesman Lindley.
The four-year rate stabilization plan first took effect in January 1996 with a 4.4 percent rate increase. That was followed in February 1997 with a 2.9 percent increase. The company was scheduled for a 2.75 percent increase in 1998 and 1999.
According to Lindley, the PUC approved the company’s rate increase with the stipulation that the 1999 scheduled rate increase of 2.75 percent would be lowered to 2 percent. The company also opted to write off $1.5 million of Maine Yankee refueling outage expenses and an additional $1.3 million that would have been granted to them under a profit-sharing provision written into the rate plan, Lindley noted.
A portion of MPS’ loss will be absorbed by a restructured contract with Wheelabrator-Sherman Energy Co., a wood-fired generator in Sherman Station, said Boyles of MPS.