PUC Declines To Suspend Consideration Of Default Service Time Of Use Rates, Orders New Inquiry Into Utilities' Capabilities To Implement TOU Rates

The Maine PUC declined to adopt a stipulation among parties that would have shelved consideration of adopting time of use rates, including whether TOU rates should be adopted for default service, with the PUC instead directing that an inquiry be initiated into the ability of the utilities to implement TOU rates under their current billing and backoffice systems

As first reported by EnergyChoiceMatters.com, Maine's Office of the Public Advocate (OPA), Efficiency Maine Trust (EMT), Maine's Department of Energy Resources (DOER), and several consumer and energy efficiency representatives had proposed deferring TOU implementation in the near term, as Versant has indicated that Versant intends to replace or substantially upgrade its billing system in the 2030-32 timeframe, while Central Maine Power may also undertake a full system replacement

In light of potential utility billing system changes, stipulating parties are worried that any costs to implement TOU rates at this time via changes to legacy billing systems would result in "diminishing value" to customers, given the forthcoming new billing systems

However, the PUC said that the stipulation would essentially result in suspending consideration of TOU implementation until at least 2028.

"Such a delay would not be in the public interest. It is for this reason that the Commission cannot accept the partial stipulation," the PUC said

The PUC said that one issue raised during the instant TOU investigation has been how, and if, new rate designs may be implemented using the utilities’ existing metering, billing, customer care, and settlement systems, and how flexible rate designs may be integrated into future upgrades to these utility systems.

"The Commission agrees and believes that understanding system capabilities is integral to the implementation of flexible rate designs but finds that this would be better addressed through an informal investigation," the PUC said

The PUC thus directed that PUC Staff open a new inquiry pursuant to 35-A M.R.S. § 1303(1) to collect information such as, but not limited to:

1) what enhancements to, or replacements of, the utilities’ existing metering, billing, customer care, settlement, and any other relevant systems would be necessary to implement time varying rates for delivery and standard offer service;

2) the costs of such enhancements and replacements;

3) whether expected upgrades will accommodate time-varying rate designs for delivery and standard offer service; and

4) the cost differences for opt-in versus opt-out time-varying rates.

The PUC did close the current formal TOU investigation under Docket 2025-00176

The PUC said, "The Commission’s efforts to examine TOU and other flexible rate designs in this investigation and in the prior inquiry are based on a desire to provide customers with more control over their electricity costs during a time of rising costs. The majority of utility customers pay rates that do not vary over time or reflect any differences in the costs of supplying and delivering electricity at different times of the day or year. Yet actual costs incurred by the providers of delivery and supply vary over the time of day and time of year, largely driven by peak demands. In turn, these peak demands force utilities, generators and suppliers to build infrastructure sufficient to meet unconstrained peak demands. Because customers pay the same electricity rate during all hours of a day, customers have no price signal or incentive to avoid consumption during costly peak periods."

"TOU and other flexible rate designs may provide customers with more control over their electricity costs, thereby providing relief to individual customers in the short term, while lowering both supply and delivery costs in the long term for everyone. While TOU and other flexible rate designs should only be adopted if the savings to customers outweigh the costs, in order to make that determination the Commission cannot afford to delay its consideration of the costs and benefits of such rate designs," the PUC said

The PUC supports several aspects of the rejected partial stipulation, including EMT’s proposed expansion of its demand response initiative.

Docket 2025-00176