March 31st, 2023
 

By Mehr Sher

Electricity costs to increase more than expected due to community solar farms
Credit: Linda Coan O'Kresik / BDN

Mainers with lower incomes will bear the burden of electricity costs that are expected to increase in the coming years due to the state’s efforts to boost community solar development.

Mainers are already paying high costs for power, but now they can expect to pay even more once incentives for community solar programs get tacked onto their electricity bills starting July 1.
The costs being factored into electricity bills for purchasing power from community solar projects are projected to be even higher than what utility companies previously expected, based on estimates shared with the Bangor Daily News on Friday. Maine’s biggest utilities, Versant Power and Central Maine Power, said the anticipated cost increases are largely a result of generous incentives approved by the Maine Legislature to boost community solar development.Community solar, which is one of several forms of solar development in Maine, allows people who subscribe to a small-scale solar farm to reduce their electricity bill. But the cost savings granted to subscribers are paid for by all other utility customers who don’t participate.

Solar developers believe that there are long-term benefits of community solar programs: that they will diversify energy sources and therefore help lower costs, help the state transition toward clean energy and enable infrastructure upgrades to an aging grid.

But community solar developers are receiving higher-than-expected rates for their power because the Legislature tied the price of this power to fossil fuel-derived electricity rates. The cost to generate solar power is actually far lower than what developers are paid.

“These increases will affect everyone,” said Judy Long, the communications manager for Versant Power. “The increases are beyond our control and are based on the price of the power that we are paying versus what the cost of the power actually is.”

The cost increases will be factored into what are called stranded costs, or the costs to purchase power from developers.

Starting in July, Versant Power, which serves 164,000 customers in five counties in eastern and northern Maine, projects that an average customer who uses 500 kilowatts of power could pay an additional $15 a month in stranded costs. For the utility’s customers in the north, in Aroostook County and a small part of Penobscot County, the costs are expected to increase $11 a month, Long said.

The total increase for all its customers, based on the latest estimates, is $55.1 million. Versant Power attributes two-thirds of this increase to community solar programs, Long said.

Earlier this month, Versant Power had projected an increase of $12 a month for its customers in the north and $5 for all other customers.

Central Maine Power, which serves more than 653,000 customers in central and southern Maine, is projecting an increase of $9.02 per month for an average customer, based on the documents it filed Friday with the Maine Public Utilities Commission. The total increase for all its customers is approximately $166 million.

Two-thirds of the expected increase for CMP customers can be attributed to community solar farms, according to Central Maine Power.

CMP had previously expected adding approximately $4 to $5 in stranded costs to customers’ bills.

The rates for stranded costs have to be approved by the Maine Public Utilities Commission before July 1. They are anticipated to continue going up as more community solar farms start operating by 2024.

If all of the more than 750 community solar projects come online, they are estimated to cost ratepayers more than $270 million per year, according to the Maine Office of the Public Advocate, which represents consumers. That’s more than $330 per year, on average, for customers of Versant Power and Central Maine Power.

Power bills have already been increasing with the high costs of fossil fuels and the war in Ukraine, but the cost to offset community solar incentives is further driving up how much Mainers pay in power bills.

“This is really unfortunate to ratepayers who are struggling, and it will keep causing a lot of pain and hardship with ratepayers, especially those with lower income,” said Bill Harwood, the Maine public advocate, who represents consumers.