Maine regulators examine charging electric customers less when demand is lowest

The Maine Public Utilities Commission is looking into setting electricity prices that encourage customers to use less power during busy times of the day.

Commissioners will examine adopting so-called time-of-use, or TOU, rates that would make it cheaper for households and small businesses to use electricity in the early morning, late evening or weekends, when demand for power is lowest.

For example, under a time- and demand-based rate, it could be cheaper to run a clothes dryer or dishwasher late at night, when fewer customers are using electricity.

Shifting even a little electricity use to those off peak periods could provide big savings in the long term, Commission Chair Phil Bartlett said.

“We need to explore the extent to which time-varying rates can help avoid expensive system upgrades and help individual customers reduce their monthly bills,” he said at a commission meeting this week.

Climate policies in New England states aim to significantly cut back burning fossil fuels by encouraging electric options for transportation, home heating and appliances. But that electrification push means demand on the grid is expected to rise, requiring major upgrades to transmission and distribution systems, the commission said in its notice of inquiry .

A report this year from regional grid operator ISO-New England suggested moving some power use to off-peak times could save $10 billion in regional improvements, according to the commission.

Reducing demand at peak hours through time-of-use, or TOU, rates could help lower the overall state’s standard offer price of electricity, it added.

“I believe that such an effort provides a real opportunity to reduce future electricity system investments and engage Maine citizens more directly in controlling their energy costs,” Commissioner Patrick Scully said during this week’s meeting.

The commission will kick off its inquiry in early October. Among its considerations are whether rates would be mandatory, the best peak and off-peak times and the impact of an expected increase in winter demand for power.

The inquiry comes out of a 2023 report commission report ordered by lawmakers. That study concluded a “carefully designed TOU supply and distribution rates are likely to shift load, reduce peaks, and thus meaningfully reduce overall costs for ratepayers.”

Maine’s electric companies offer residential customers the option for a time-of-use rates for the distribution portion of their electric bill. Bills are split roughly evenly between distribution charges and the actual cost of electricity.

Under Central Maine Power’s offer, it costs just 6 cents per kilowatt hour to deliver electricity between 8 p.m. and 7 a.m., compared with 13 cents per kilowatt hour at other times of the day.

But not many people have signed up for the deal — the company said that just 4,500 of its nearly 636,000 electricity customers have adopted time-of-use rates.

“CMP is excited for the opportunity to work collaboratively with commission staff and other stakeholders to assess how time-of-use rates can help achieve Maine’s climate change goals while also creating opportunities for our customers to save money,” spokesperson Jon Breed said in a statement.

This article appears through a media partnership with Maine Public .