Maine Electricity Costs Projected to Rise amid Rate Increases

Residents of Maine are likely to face an increase in their electricity supply costs beginning in January 2026. An analysis by Competitive Energy Services, a consulting firm based in Portland, indicates that homes and small businesses that participate in the state-run standard offer program may see rates rise by approximately 15%. This translates to an estimated increase of around $8 per month for the average household.

This supply cost hike is separate from the ongoing request by Central Maine Power (CMP) to raise its distribution rates for infrastructure upgrades. CMP’s proposal is currently under review by the Maine Public Utilities Commission (PUC) and has sparked significant public opposition, with a record 617 public comments submitted by early October. Andrew Price, President and CEO of Competitive Energy Services, noted, “Affordability is becoming a big issue, a big political issue.” He expressed concern that the combined effect of the supply increase and CMP’s proposed distribution hikes would exacerbate public discontent.

Rising electricity rates are not unique to Maine. Nationwide, energy costs have surged by 13% since 2022, with further increases anticipated, as reported by the federal Energy Information Administration (EIA). In some areas, these rises are linked to the need for additional power plants to support growing energy demands from new data centers.

Factors Behind Maine’s Cost Increase

The anticipated spike in Maine’s electricity supply costs is primarily driven by increasing wholesale natural gas prices, rather than factors related to artificial intelligence or CMP’s case. Natural gas prices, which are expected to continue rising into 2026, are influenced by the United States’ position as the world’s largest gas exporter. Projections indicate that the volume of liquefied natural gas (LNG) exported from the U.S. will double by 2030.

The rising costs have significant implications for energy consumers in New England, where approximately half of the region’s electricity is generated from natural gas. This means that fluctuations in gas prices directly affect the marginal cost of electricity generation in the area. Philip Bartlett, chair of the PUC, stated, “It’s fair to say that electricity prices track natural gas prices.” He added that any increases in natural gas prices would likely be mirrored in electricity costs.

The PUC is set to review bids from electricity generators next month for the standard supply service in 2026. While the exact impact of these bids remains uncertain, market trends suggest that consumers should prepare for potential price increases.

Electricity Supply Trends in Maine

For over 25 years, Mainers have sourced their electricity from an unregulated market, leading to significant volatility in supply costs. These costs have fluctuated dramatically, ranging from approximately 6 cents to 16 cents per kilowatt-hour (kWh). After a brief drop during the pandemic in 2020, prices surged following Russia’s invasion of Ukraine, before stabilizing in the past two years. As of now, standard offer supply rates hover around 11 cents per kWh for CMP and Versant Power’s Bangor Hydro District.

Between 2014 and 2024, Maine experienced the third-fastest growth in total electric rates in the United States, primarily attributed to rising natural gas prices. The state’s capacity constraints in its gas pipeline system, particularly during cold winter months, often necessitate the use of more expensive LNG to meet demand.

The role of LNG in the energy market is significant, particularly as coal plants retire and natural gas becomes the primary fuel for electricity generation in the U.S., meeting 42% of the country’s energy needs. Notably, a rising share of American gas is being exported, primarily to Europe and Asia, further influencing domestic prices.

While some organizations, such as the American Petroleum Institute, argue that LNG exports do not significantly affect residential gas prices, the overall trend indicates that domestic prices are on the rise. Heather Sanborn, Maine’s public advocate for utility customers, expressed frustration over the rising costs, emphasizing that her office frequently hears from residents concerned about affordable power.

To address these issues, Sanborn advocates for exploring new methods for the PUC to procure standard offer contracts. A bill passed this year directs the PUC to consider soliciting bids more frequently and for varied durations in an attempt to mitigate rate volatility. Bartlett mentioned that while the PUC has conducted procurement studies with minor recommendations, significant changes that would drastically lower supply costs are unlikely.

Both Sanborn and Bartlett noted that expanding renewable energy capacity, such as solar and wind, could help alleviate some pressure on natural gas prices over time. Increasing the availability of renewable energy sources can reduce reliance on gas plants during peak demand periods, particularly on hot summer afternoons when air conditioning usage spikes.

As the situation unfolds, residents are urged to stay informed about potential changes to their electricity costs and to engage with utility regulators to express their concerns. The PUC’s report to the Legislature is expected in January, potentially providing more insight into the future of electricity pricing in Maine.

This article was originally published by The Maine Monitor, a nonprofit and nonpartisan news organization. To receive regular updates, sign up for a newsletter from The Monitor.