Bangor Hydro-Electric, Maine Public Service May Merge Service Areas November 30, 2012 Email This Story Copyright 2010-12 Energy Choice Matters
Affiliates Bangor Hydro-Electric and Maine Public Service have petitioned for the Maine PUC for approval of an internal reorganization which would see the companies merge into a single entity (yet unnamed), and which may also result in, for rate purposes, a single service area with uniform, territory-wide rates.
An application filed with the PUC yesterday would not address the introduction of uniform system-wide rates at this time, but calls for a future petition addressing a potential introduction of, or partial movement towards, system-wide rates.
"The Utilities recognize that rate uniformity across MergerCo's single service territory is an important objective, and that rate stability is also important. Therefore, as part of the Proposed Transaction, the Utilities propose that within forty-five days of the filing of this Petition, they will submit a rate proposal (the 'Rate Proposal') under which, the consolidated utility initially will have two divisions, a Northern Division (former Maine Public customers) and a Southern Division (former Bangor Hydro customers)," the companies said.
"The Rate Proposal will address distribution rates in both divisions, and may include recommendations to immediately consolidate and apply uniform distribution rates for certain rate classes across both divisions where the existing rates and classes are closely aligned, but delay rate consolidation and uniform distribution rates for other rate classes," the companies said.
The utilities do not, themselves, propose any changes to the treatment of Standard Offer energy supply rates. However, the utilities noted that the Commission, "may want to consider whether it would like to request standard offer bids for energy supply to all of MergerCo's customers together, or request separate bids for the Northern Division and Southern Division customers."
Notably, BHE (ISO-NE) and MPS (NMISA) remain in separate grids, and instituting uniform generation rates would pose unique issues that do not arise when merging the costs of distribution assets across all customers in distinct service areas.
The utilities will not seek changes to the current stranded cost rates or transmission rates. Existing Maine Public stranded cost and transmission rates will continue to apply to the Northern Division of MergerCo, and existing Bangor Hydro stranded cost and transmission rates will continue to apply to the Southern Division of MergerCo.