VINALHAVEN electric rates double in two years with industrial wind turbines - Analysis

Below is the letter delivered to the Governor's office along with a copy of the chart showing the price of electricity on the island and elsewhere in Maine. To access the documents click on the links at the bottom of this page. For more information visit fiwn.wordpress.com.

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Mr. Kenneth Fletcher, Director
Governor’s Office of Energy Independence and Security 62 State House Station Augusta, Maine 04333-0062

Subject: Fox Islands Wind Electric Energy Rates Double in the Last Two Years

Mr. Fletcher,

The Fox Islands Wind turbines have been operating since November 2009, and after two years it is important to take stock of how this has affected electric rates on the island.

The attached chart and table show electric rates on Vinalhaven and North Haven over the 24 months since start-up. The graph shows the rates charged to Fox Islands Electric Co-op ratepayers as compared to CMP’s Historical Standard Offer prices1.

While there is much information supporting a correlation of dropping natural gas prices and falling electricity prices2, the trend is a concern in Maine for projects like Fox Islands Wind whose consumer rates tend to rise as a result.

Vinalhaven’s consumer energy rates have doubled from 6₵ to over 13₵/KWh, while many other wholesale market rates have gone down. As a direct comparison, CMP Standard Offer rates have remained consistently low at about 7½ ₵/KWh.

It should be noted that FIEC’s energy rates include a special 1₵/KWh surcharge, applied to all bills to recover $365k in legal and consulting costs spent by FIW in defense of their compliance exceedances with the DEP3. The surcharge generally represents less than 4% of a ratepayer’s overall bill, including the T&D which has remained roughly the same for several years at about 13₵/KWh. So at just 1₵/KWh, the legal costs are not a major contributor to the doubling of the energy rate.

This chart and data are for your edification and review. If you would like to further discuss any of this information or its sources, I can be reached at the address and phone number below, or by email.

Thank you,