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PUC Staff Issue Straw Proposals For Time Of Use Default Service
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Staff of the Maine PUC have issued three illustrative straw proposals for implementing time-of-use (TOU) Standard Offer default service electricity rates
Staff does not, at this time, take a position on any of the straw proposals, which also include TOU rates for distribution
"The primary goal at this stage of the process is to commence the iterative process of developing two or three proposals and a set of assumptions that would then be used to estimate costs, benefits, and implementation timelines in a future cost-benefit analysis," Staff said
"These straw proposals are presented purely for the purpose of initiating discussion and soliciting feedback from the parties," Staff said
All of the straw proposals provide that, concerning "Supply vs Distribution TOU", that such should be, "Aligned, no differentiation".
While this can mean that the TOU periods for both Supply and Distribution are to be identical, a consultant's report on which one of the straw proposals is based also uses the term alignment to mean that a customer's TOU status should be aligned for both Supply and Distribution; meaning, if the customer is on TOU default service, the customer should be on TOU distribution rates, and if the customer is on flat default service, the customer should be on flat distribution rates
The proposals do not address treatment of customers shopping for a competitive retail supplier, and whether a shopping customer, for example, may choose either flat or TOU distribution rates while on competitive retail supply
Straw Proposal #1
Straw Proposal #1 reflects a design recommended in a consultant's report previously provided to the PUC in April 2025
Straw Proposal #1 would implement TOU Standard Offer rates on an opt-out basis, with customers able to select a non-TOU default service rate
"Customers have a 12 month stay requirement after active choice," the straw proposal states. While not explicit, this would appear to be a minimum stay for the selected Standard Offer rate option (TOU vs. non-TOU), and not a minimum stay on default service or a shopping restriction
TOU Standard Offer rates would include all time-varying wholesale costs, including energy, capacity, and Regional Network Service (RNS), that are determined to vary by TOU
The TOU rates would have two time periods with a single peak, with the peak lasting between 3-6 hours, with the peak to be within the "hours ending 2:00 to 8:00 PM", with no seasonality, and with rates changing at least on an annual basis
The TOU price differential would be cost-based with an administrative adjustment if needed to ensure at least a 2:1 on-peak to off-peak ratio.
A TOU rate and non-TOU rate comparison would be provided on the customer's bill, in addition to online tools. Shadow billing would be provided on the customer's bill for 12 months
Low-income customers would receive bill protection, with a guarantee of no negative impact compared to the non-TOU default service rate, for 12 months
Wholesale SOS suppliers would be provided with a reconciliation such that SOS suppliers are held harmless for shifts in the on-peak / off-peak usage ratio, but not changes in magnitude of load or price.
Straw Proposal #2
Straw Proposal #2 would implement TOU Standard Offer rates on an opt-out basis, with customers able to select a non-TOU default service rate, except that TOU Standard Offer rates would be mandatory for net energy billing (net metering) customers (presumably "mandatory" only to the extent the customer does not choose a competitive retail supplier)
Straw Proposal #2 has an administratively set TOU price differential ratio with a "high" ratio to be grater than 3:1
The TOU rates would include all time-varying wholesale costs, including energy, capacity, RNS, as well as an estimate of hourly GHG marginal emissions intensity costs (e.g. using ISO-NE marginal source, emissions intensity, and Social Cost of Carbon)
The TOU rates would have two periods (peak, off-peak) with a "short" peak (e.g. 3 hours) to specifically incentivize peak shaving
TOU rates would vary seasonally (with two seasons, summer and winter)), including a schedule to reflect different peak periods in different seasons
The low-income customer protection and SOS supplier reconciliations would be the same as described above for Straw Proposal #1
Straw Proposal #3
Straw Proposal #3 would provide that customers must affirmatively choose between TOU and flat rates. The proposal says, "no default rate", but the proposal does not explain what would occur to the extent the customer makes no choice
Straw Proposal #3 proposes messaging to customers that would suggest that low-income and/or heat pump customers should choose flat rates, while EV customers should choose TOU
TOU Standard Offer rates would include all time-varying wholesale costs, including energy, capacity, and Regional Network Service (RNS), that are determined to vary by TOU [same as Straw Proposal #1]
The TOU price differentials would reflect an administratively-set "low" ratio, less than 3:1, to limit customer risk from usage patterns
Straw Proposal #3 suggests consideration of the use of shoulder peaks, in addition to on-peak and off-peak periods, to limit customer risk from usage patterns (or the use of a "super off peak" period)
Customer education would be the same as under Straw Proposal #1, though Straw Proposal #3 also suggests consideration of enhanced shadow billing, through potentially providing, at the time of affirmative customer choice between TOU and flat rates, an estimate of what the customer's past few months of bills would have been under each rate
Straw Proposal #3 would provide rate protection for all customers, with a guarantee of no negative impact compared to the standard flat rate, for 12 months
Straw Proposal #3 also suggests an automatic customer movement to flat rates if the customer would pay less under flat rates. It was not clear if this would be a one-time movement occurring a set time period after the initial choice, or if the comparison and movement would occur at any point (e.g. if a customer at any point pays, for 6 consecutive months, more under TOU than flat, the movement would occur)
"If customer pays more under TOU than flat rate after a certain period (e.g. 3-6 months), customer gets automatically moved to flat rate," the proposal states
Compared to Straw Proposal #1, customers would have a shorter minimum stay requirement (e.g. 6 months) after their active rate choice (again, it is not explicit that this minimum stay addresses changing between TOU and non-TOU default service, rather than competitive retail supply)
The SOS supplier reconciliations would be the same as described above for Straw Proposal #1
Separately, the PUC directed Central Maine Power to present testimony concerning the capabilities of its AMI system, including the proper recording of TOU usage when the meters lose connectivity
CMP has said in a prior PUC filing that, "Following a power outage, there is a potential lagtime between when power is restored and when a meter re-establishes network communications and resets its meter clock. The meter clock is necessary for the meter to distinguish between on peak and off-peak hours, and to record load profile data accordingly. A battery maintains the meter clock during an outage, eliminating the potential lag time. Without a battery, load profile data during this lag would not be recorded and therefore would not be billed. Accordingly, to expand TOU rate offerings, CMP would need to either install batteries on existing non-TOU AMI meters or procure additional TOU AMI meters to facilitate meter exchanges."
A CMP representative also previously said in appearing before the PUC that, "... because we rely on radio communications between the meters and our system that collects that data, when the system loses power, the clock gets re-set. There is a lag when the power is restored between the time that that meter reconnects to the system and gets its time resynchronized and also is instructed to start collecting load profile data. During that lag time, it is collecting data. It's basically recording usage. The problem we run into is we cannot bill for that usage because the data to break it up is not there. It requires that time sync and that load profile data in order to effectively bill for a TOU customer."
The PUC directed CMP to provide testimony exploring a potential administrative approach to the lack of batteries, and the appropriate rate for billing during periods in which there is no time component for the reasons discussed above
The PUC said, "For example, could customers whose meters experienced the post-outage lag be billed at an administratively specified rate until the meter regains contact and the clock is reset?"
CMP shall, "Identify and discuss any revenue, ratemaking, or technical issues raised by using an administratively set rate (e.g. the off-peak rate) for TOU billing of customer usage during the post-outage lag time," the PUC directed
The PUC also directed CMP in testimony to reconcile this inability to properly bill on TOU, due to the meter issues discussed above, with statements made by CMP in a prior federal DOE grant application related to AMI. The PUC noted that the PUC had relied on such statements in approving CMP's AMI plan.
The PUC said that, in the DOE application, CMP had said, "The MPUC will initiate a proceeding to consider and develop time-differentiated standard offer service and other dynamic pricing products to
maximize the utility of CMP’s AMI platform (See Attachment 2). Although the MPUC is responsible for the definition and acquisition of standard offer electricity supply with dynamic pricing, CMP will support the implementation through the AMI network by providing customer usage, rate information, customer service and billing services. Once implemented, dynamic pricing will be available to 100% of CMP’s customers. The plan is to have dynamic pricing available soon after deployment of the AMI Project."
The PUC noted, "There is no reference to the need for batteries to ensure that the meters record and deliver accurate interval readings."
The PUC said, "Given that the Commission’s approval of CMP’s AMI project was 'explicitly premised' on CMP’s statements concerning the system’s capabilities, and that one of those capabilities was dynamic pricing, the Commission has questions about the issue put forward by CMP in Docket No, 2024-00231, discussed [above], that the lack of batteries in the meters now means that customers’ hourly usage cannot always be registered, thereby compromising a TOU rate design."
Docket 2025-00176
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October 13, 2025
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Reporting by Paul Ring • ring@energychoicematters.com
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