Acadia Center Comments on Straw Proposal

Multiyear rate plans are a part of performance based ratemaking that sets rates for several years in a predefined way under the condition that the utility can’t come back to ask for new rates unless something very unusual happens (like COVID). This creates an incentive for the utility to manage its costs more effectively than under normal cost of service ratemaking. Acadia Center’s comments went through each element of the proposed framework, identifying recommendations for how it could be improved with affordability for Maine’s electric customers in mind.

Acadia Center also recommended three performance incentive metrics, measurable policy goals the state may want its utility to meet in order to improve the grid or its residents’ experience with the grid. The three proposed metrics are:

  1.  A system load factor metric, which would incentivize using the grid more efficiently
  2. A reliability metric index, which measures different ways the grid is (or is not) reliable and incentivizes improvements
  3. A disconnections reductions metric, which would incentivize disconnecting fewer customer

All three of these goals, if met, would improve Maine’s grid and Mainers’ experience with it.

Though this docket will provide guidance to the utilities rather than create a binding requirement, the guidance that will come out of it is a major opportunity to shift the path of future rate cases towards helping Maine meet its policy goals and away from focusing on utility profits.