Kill the house lights

Politics and other mistakes
By AL DIAMON  |  December 19, 2007

As we celebrate the solstice on December 21 — the darkest day of the year, except for April 15 — take comfort in knowing that state officials are doing all they can to make it even darker. And, like Tax Day, more expensive.

OK, don’t take comfort. Be like that.

You can’t blame the high cost of electricity in Maine — we currently pay 59 percent more than the national average — on unrest in the Middle East. We’ve had unrest in the Middle East for longer than you’ve been alive, and we haven’t gotten fried every time the arrival of the Central Maine Power or Bangor Hydro Electric bill coincided with some international short circuit.

In 1975, for instance, OPEC got in a snit and jacked the price of crude by 10 percent. Our light bills, which were only 13 percent higher than the average in the rest of the country, barely budged.

In 1985, Israel was engaged in one of its periodic invasions of Lebanon, and Palestinian terrorists were killing tourists on a cruise ship in the Mediterranean. Meanwhile, Maine’s power costs were actually declining relative to the rest of the US, dropping to just 9 percent above average.

In 1995, the oil-producing parts of the Middle East were relatively stable. Our cost per kilowatt-hour was anything but, shooting up to 49 percent above what the average household was paying.

If, as expected, the cost of keeping the juice flowing jumps by more than $300 million a year in the near future, don’t blame George W. Bush just because he decided to invade Iran.

The cause of this sticker shock is closer to home.

As Carroll Lee, the former chief operating officer of Bangor Hydro, put it in a November speech to the Bangor Rotary Club, the problem is a “lack of reasoned and stable government policies.” By which he means state government. The feds, like the Saudis, have blundered around on the fringes of electrical production and distribution, but the major impacts on your light bill have been the result of decisions made in Augusta.

“With the increased government activism in the 1980s,” Lee said, according to a copy of his speech, “[Maine Public Utilities Commission] regulations mandated rate increases to encourage and pay for conservation and to purchase power from non-utility generators at extremely inflated rates, typically double prevailing prices. The required subsidies would ultimately cost customers hundreds of millions of dollars.”

In 1980, Maine utilities generated 20 percent of their power from hydro. Another 20 percent was imported from Canada. About 40 percent was produced at the Maine Yankee nuclear plant. Just 20 percent was imported fossil fuels. That mix could be shifted if one source of energy got too expensive, thereby providing price stability.

By 1990, CMP and Bangor Hydro were buying 40 percent of their power from non-utility generators (NUGs), mostly small operators who produced pricey power. But there was no shifting away from them, because state law required the two companies to purchase all the juice the NUGs could turn out.

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