There are approximately 100,000 Maine households struggling to pay Maine’s high energy prices
MEDIA CONTACT: William Harwood, 207-624-3687, William.Harwood@maine.gov
HALLOWELL, ME – The Maine Office of the Public Advocate (OPA) on behalf of the Electric Ratepayer Advisory Council (ERAC), today submitted its Annual Report to the Joint Standing Committee on Energy, Utilities and Technology.
The Council is charged with evaluating the affordability of electricity in Maine and advising the Public Advocate on potential savings measures. To that end, the Council commissioned two studies that examined the burden of Maine’s high energy costs on low-income families, and whether Competitive Electricity Providers (CEPs) offer actual competitive rates.
Overall, the Council urges the Legislature to:
- Give the OPA access to the data needed to complete the research of the CEP market to determine the extent to which low-income ratepayers are being overcharged by CEPs.
- Expand the Low-Income Assistance Program (LIAP) to provide larger benefits to more low-income households to relieve the affordability gap facing them.
- Increase consumer education and outreach to provide more help to low-income ratepayers to more efficiently use electricity and thereby reduce their costs.
The most important findings in the Report include:
- There are approximately 100,000 low-income Maine households struggling to pay Maine’s high energy prices.
- Electricity prices in Maine are twice the national average.
- On average low-income ratepayers in Maine pay approximately 8% of their household income just for electricity – double the 4% maximum recommended by consumer experts.
- As a percentage of household income, low-income households pay three times more than the average household for electricity.
- The “affordability gap” (the difference between what electricity costs and what low-income customers can afford) for electricity in Maine is estimated to be $85M/yr.
- High CEP prices contribute to making electricity unaffordable for many low-income households.
- In 2023, 77 percent of residential CEP customers paid more for their electricity supply than if they had purchased standard offer service, and low-income customers are disproportionately likely to respond to exaggerated claims of energy savings in CEP marketing.
- During the eight years (2016-2023), CEPs charged Maine’s households $135 million more for electricity supply than what would have been charged by the Standard Offer Provider.
In his letter to members of the Joint Standing Committee on Energy, Utilities and Technology, Public Advocate William Harwood explained, “ERAC relied on these new studies to generate multiple recommendations aimed at increasing funding for and improving the administration of the PUC’s Low-Income Assistance Program (LIAP), documenting CEP overcharging of low income ratepayers, increasing consumer education and outreach, reforming the retail electricity supply market, and supporting energy efficiency programs for lower income households.”
Shawn Lovely, Plant Manager at Pineland Farms Potato Co. reflected on the Council’s findings, saying, “Given the evidence that low-income households are especially vulnerable to overcharging for electricity by CEPs, it is clear that this is not a market that is benefitting Mainers.”
Harwood stated that he “hopes the Legislature and policy makers will carefully consider these recommendations and seriously address the crushing burden today’s high electricity prices have on low-income consumers. The situation will only get harder in 2025 when the cost of electricity for residential customers will increase by 7% for CMP customers and 4.5% for Versant BHD District customers. We should never put consumers in the untenable position of having to choose between paying their utility bills and providing needed food and medicine for their family.”
Jess Maurer, Executive Director of the Maine Council on Aging, stressed that, “The current LIAP funding is woefully short of the need. Finding new funding sources to bridge the affordability gap between what is budgeted and what is needed is critical.”
View a copy of the ERAC Annual Report at: https://www.maine.gov/meopa/about/reports-and-testimony/council
The two embedded consultants’ reports are:
“Quantifying Maine’s Household Energy Burden and Affordability Gap” and
“Is Maine’s CEP-Served Residential Retail Electric Supply Market Affordable?”
ERAC is a result of legislation passed in 2021, An Act to Create the Electric Ratepayer Advisory Council. The Council consists of 13 voting members representing customers, special interest groups, and utilities across Maine. A full list of the ERAC members can be found in the annual report.