An Act to Institute Performance Based Rates for Electric Utilities sails through Leg Council
AUGUSTA – The Legislative Council on Thursday voted unanimously to approve an after-deadline bill request from Speaker Sara Gideon, LR 2427, “An Act to Institute Performance Based Rates for Electric Utilities.” The bill would provide for a comprehensive review of the incentive structure for Maine’s investor-owned transmission and distribution utilities, including Central Maine Power and Emera Maine.
The legislation comes after numerous issues surrounding the State’s investor-owned electric utilities, including serious billing discrepancies, outages, and lagging storm recovery.
“The problems with Maine’s investor-owned electric utilities seem to become clearer and more concerning by the day,” said Speaker Gideon. “These companies should be laser-focused on things like reliability, affordability, sustainability and security. However, the current incentive structure seems to reward these companies for investments that may benefit shareholders more than ratepayers. It’s past time we had a serious conversation about ensuring our utilities are incentivized to serve their customers’ best interests.”
Performance based ratemaking (PBR) links utility revenues to the achievement of customer-focused performance metrics. These may include anything from standards of reliability or consumer rate volatility, to billing accuracy and the interconnection of renewable energy resources and energy storage solutions. Because it specifies certain benchmarks, rather than requiring certain prescriptive measures utilities must take, PBR encourages innovation in the delivery of electric power and can significantly lower costs and increase service quality.
The legislation, still in draft form, will be finalized in the coming weeks and referenced to a legislative committee for a public hearing. A public hearing will be announced at a later date.