Maine
Report: 100,000 low-income Maine households struggle with rising electricity bills
About 100,000 Maine households are struggling to pay some of the most expensive electricity bills in the U.S., and costs are set to keep climbing in 2025, according to a state report released Monday.
The Electric Ratepayer Advisory Council urged state lawmakers to expand the Low-Income Assistance Program so greater benefits go to more low-wage households to “relieve the affordability gap facing them.”
The council, which evaluates the affordability of electricity in Maine and advises the state public advocate on how to promote savings, said in its annual report to the Legislature’s Energy, Utilities and Technology Committee that low-income ratepayers in Maine pay on average about 8% of their household income for electricity. As a percentage of income, Maine’s low-wage households pay three times more for electricity than the average, according to the report.
Public Advocate William Harwood said he hopes the Legislature and other policymakers will consider recommendations to bolster financial assistance programs “and seriously address the crushing burden today’s high electricity prices have on low-income consumers.”
“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,” he said.
Costs are expected to rise next year by 7% for customers of Central Maine Power Co. and 4.5% for Versant Power’s Bangor Hydro District customers, Harwood said. A higher transmission rate approved by the Federal Energy Regulatory Commission is the main driver of the higher costs. It fluctuates each year and is allocated among the six New England states, CMP spokesperson Jon Breed said.
The formula was favorable to Maine customers in 2024, resulting in a one-year $4 credit, which will expire next year, he said. The allocation for Maine increases in 2025 by about $4, resulting in an approximately $8 change for customers, he said.
The increase wipes out a slight decrease in the standard offer rate approved last month by the state Public Utilities Commission. The standard offer is the default supply price for nine of 10 residential and small-business customers who don’t contract for electricity with competitive energy providers. The second of a two-year increase approved by regulators in 2023 to finance improvements in CMP’s distribution system also takes effect next year.
CMP serves about 635,000 customers and Versant Power serves about 165,000 customers in Maine.
Transmission cost increases affecting Versant also take effect in January; the impact will be calculated in December, spokeswoman Judy Long said.
The Public Utilities Commission says eligibility for the Low-Income Assistance Program that helps qualified consumers pay for electricity costs is based on eligibility for low-income heating assistance and participation in state means-tested programs with a household income at or less than 150% of federal poverty guidelines.
For a single person, the federal poverty guideline in 2024 is $15,060 a year, and $31,200 for a family of four.
Electricity costs in Maine, and New England generally, are among the highest in the U.S., according to the U.S. Energy Information Administration. The average retail price of electricity in Maine was 20.84 cents a kilowatt-hour in 2023. The cost is due to several factors, including the volatile price of natural gas, which makes up most of the power used to generate electricity; limited access to natural gas pipelines compared with other regions, making it vulnerable to supply shortages when demand is high, such as in the winter months; and the transition to zero-carbon energy.
In contrast, electricity ratepayers in states such as Iowa, Kentucky and Louisiana pay less than 10 cents a kWh.
Higher electricity costs also are driven by competitive electricity providers, which are the retailers that sell to consumers who choose not to pay the standard offer rate set by the PUC, the report said. In 2023, more than three-fourths of residential customers of competitive electricity providers paid more than if they had purchased standard offer service, the report said. Low-income customers are disproportionately likely to respond to claims of energy savings in marketing by competitive electricity providers, it said.
From 2016 to 2023, the electricity providers charged Maine’s households $135 million more for electricity than what would have been billed by the standard offer, the report said.