Maine households have unnecessarily spent about $50 million on electricity over the past four years, through a competitive retail electricity market that purported to offer savings, according to results of an investigation by the Bangor Daily News (BDN), published on November 16.
The study used federal data to compare default electric rates to prices in the competitive market.
In 2015 alone, the newspaper states, Maine customers of competitive electricity providers paid a premium of $32.4 million for their power, over and above a default price set by state regulators on behalf of consumers.
That’s in addition to a total $20 million such customers could have avoided from 2012 to 2014 if they had stuck with the default price, as reported in an earlier August investigation by the Bangor Daily News.
The updated analysis of federal electricity data provided by the local news outlet this week shows that the premium on power from “these electricity middlemen” – the largest is Electricity Maine –increased dramatically in 2015. As a group, they have charged their customers more than the default rate.
However – via telemarketing efforts, advertising campaigns, and relationships with other service companies – competitive electricity providers have still consistently maintained more than 100,000 customers in Maine since entering the residential market in a big way in 2012.
But that may be changing. Customers appear to be catching on to the higher prices charged by competitive retailers, with more and more returning to the default price. As of April, the Bangor Daily News found, 130,546 residential competitive retail customers remained in Maine – down from a peak of around 221,000 in mid-2013.
If you spread the $32.4 million premium that these customers paid in 2015 equally across all of those customers signed up in April, they paid an extra $248 each for the year, or $20.70 per month, the local news outlet said. For the average home, using 550 kilowatt-hours (kWh) per month, the difference amounted to $229 more per year.
Customers who lost money to competitive providers told the Bangor Daily News earlier this year that they weren’t even shopping for plans when they signed up. Electricity Maine, for example, began by offering savings over the standard offer, with big television and radio advertising campaigns.
Last year alone, Electricity Maine’s customers would have saved an estimated $25.8 million if they instead had taken the standard offer, the news outlet claims. After saving customers about $2.8 million in their first year and amassing hundreds of thousands of savings seekers, Electricity Maine has taken in an estimated $36.6 million premium on its sales since 2012.
Higher and lower prices
The company, based on its sheer success at accumulating customers, has also cost them the most. But it doesn’t have the highest prices. North American Power and Gas and FairPoint Energy both had average prices above Electricity Maine’s in 2015, as did Clearview Electric.
The study found that Ambit Energy was the sole retail provider with an average price that beat 2015’s average standard offer, which was about 7.3 cents for customers of the state’s major utilities.
Ambit’s average price was half a cent per kilowatt-hour cheaper, to be exact. While that may not sound like much, across about 3,600 customers, it amounted to savings of roughly $104,000.