In a cold winter, Maine household budgets buckle under growing energy burden – Press Herald

The combined cost of household energy in Maine this winter – electricity, heating fuel and gasoline – is soaring to levels not seen since at least 2014.

This total energy burden will weigh heavily on Mainers in 2022, as they cope with bills that are starting to pile up after the coldest January since 2009.

A trio of rising prices is contributing to the distress:

• Average heating oil costs rose from $2.27 last January to $3.44 last month, a difference of $1.17 a gallon. That would require an additional $321 to fill a 275-gallon fuel tank. The last time heating oil hit $3.50 was in 2014, according to the Governor’s Energy Office. Although their use is decreasing, heating oil and kerosene still warm six out of 10 Maine homes.

• “Standard offer” electricity supply rates, which most Mainers pay, are up more than 80 percent from 2021, adding at least $30 a month to an average bill for most Maine homes. But the increase can be much more for people who use electricity for heating.

It’s a sudden reversal. Between 2011 and 2020, the standard rates established via a state-run bidding process fell by 15 percent, according to the Maine Public Utilities Commission.

• Statewide gasoline prices last February hovered around $2.46 a gallon, according to gas station locator service GasBuddy. Last week, the average per-gallon price hit $3.48 in Maine, adding $15 or so to a fill-up. That’s well shy of a record $4.15 in July 2008, but the Russia-Ukraine standoff and other factors are pushing up wholesale petroleum prices on global markets.

The coldest January in 13 years has made matters worse. On six days last month, the temperature in Portland fell to zero or below, according to the National Weather Service.

WINTER PRICE SHOCK

State officials and consumer advocates are scrambling for ways to ease the burden.

Two weeks ago, Gov. Janet Mills and Public Advocate William Harwood proposed a one-time, $90 credit on the electric bills in low-income households. That relief plan was approved last week at the PUC.

Officials are working to expand eligibility for programs that help low-income Mainers pay their power bills. Utilities and fuel dealers, meanwhile, are urging customers struggling with high costs to contact them right away, to explore payment options and potential aid programs.

But these well-intended measures are cold comfort to Ron Brann.

Brann was stunned when he saw his January electric bill: $437. His December bill had been $229.

Brann is a retired, disabled veteran living on a fixed income. He wondered, how could power costs for the vintage trailer home in Canton he shares with his fiancée and her young daughter double in a month?

“It’s Maine – you can expect this weather,” he said. “But you don’t need a light bill for $437. That’s ridiculous.”

Mainers with tight finances have always struggled with energy costs. But this winter’s energy burden is straining middle-income budgets, too.

People such as Pam Partridge are the new face of energy anxiety in Maine. A retired teacher, Partridge lives alone in a 50-year-old ranch-style home in North Anson.

Worried about rising electric rates, Partridge turned off her heat pump last month and decided to rely largely on the oil furnace. When it was brutally cold, such as one memorable 23-below morning, she constantly fed the wood-burning cookstove in her kitchen. Still, she received a $544 oil bill in late January for 155 gallons.

Partridge said she’s accustomed to having enough money to cover her expenses, but now she may have to dip into savings earmarked for retirement.

“I feel lucky,” she said. “I have options. But on those really cold days, I had all those things going at once. I don’t know if it saves money, but it keeps me warm.”

Juggling heat sources to take advantage of shifting prices is a familiar strategy for Mainers — sort of a Down East version of energy arbitrage. This winter, Patty Moody-D’Angelo and her husband decided to rely more on their heat pump and less on the oil boiler, pellet stove or propane-fired fireplace in their 22-year-old West Gardiner home.

They were shocked last month when they got a $600 electric bill, up from $265 last January.

“I’m pretty frustrated,” said Moody-D’Angelo, a retired state worker. “We spent money to make sure we were energy-efficient. We thought we were doing all the right things.”

And it’s not just electricity. Moody-D’Angelo’s husband sells cars in Topsham and commutes roughly 27 miles each way. Last year, he was spending roughly $70 a week for gasoline. Now it’s $110.

The couple recently had to make two trips to Massachusetts for a family funeral, driving their Volvo XC90 SUV to do errands.

“We spent $280 that week on gas,” she said. “It’s crazy.”

HIGH BILLS ALARM SENIORS

This winter’s energy burden is especially worrisome for older Mainers. Nearly 30 percent of seniors over 65 live chiefly on Social Security, which averages $1,100 a month, according to AARP Maine.

“We’re definitely hearing about it,” said Japhet Els, the group’s advocacy and outreach director.

AARP sends periodic questionnaires to members to help set priorities. Utility bills typically fall below affordable housing and prescription drugs, but now they top the list of concerns. Some people are sending photos of their electric bills, Els said.

The combination of overall price inflation that’s pushing up the cost of food and other consumer goods is starting to hit middle-income seniors, Els said. Power bills just amplify the pain.

“We can no longer talk about utility costs in a vacuum,” he said. “It just speaks to how inflation and a cold winter are impacting more people, even those who we assumed could handle a bump-up in costs.”

Some of these people, including Brann and Moody-D’Angelo, have reached out to Kiera Reardon. She’s the consumer adviser at the Maine Office of Public Advocate, which represents utility customers.

Reardon typically fields a dozen or so calls a week about utility rates and service. Now she’s getting 20 to 30 calls a day.

“Half are trying to understand what caused the change,” she said, “whether it’s the utility’s fault, how did the PUC let this happen. The other half are generally fearful. They’re scared and want to know what options they have, how they’re going to pay this large bill.”

Reardon tries to explain what’s behind high electric rates. She steers callers to resources based on their financial situation.

Some households may be able to temper their power supply bills by switching from the standard offer – the PUC-negotiated default rate – and shopping around for a competitive energy supplier. Today’s best rates can be a couple of cents lower per kilowatt-hour than the standard offer. The advocate’s office maintains a website to help people explore options. But a note of caution: Contract terms vary and rates change, so it’s important to read the fine print and pay attention over time.

ENERGY DEVOURS PAYCHECKS

The challenges that Maine’s most vulnerable residents face in paying for heat, electricity and transportation have been well documented in recent years. Energy burden and usage studies done for the public advocate office in 2018 and 2019 help illustrate why today’s high energy bills are causing so much hardship. For instance:

• Low-income Maine households spend roughly 19 percent of their income on energy, compared to 6 percent for other households.

• Seven in 10 Maine homes burn fuel oil or kerosene and nearly eight in 10 households eligible for heating assistance depend on  central boilers or furnaces.

• Heating with propane nearly doubled household energy spending compared with fuel oil, when hot water and cooking are included. In 2018, the average annual cost for propane was around $6,000. For fuel oil it was $3,000.

• Six in 10 low-income homes heat water with electricity. Nearly 70 percent cook on an electric stove.

• Regarding transportation, half of low-income households had one vehicle; one-quarter had two vehicles. Twenty percent of households reported driving 10,000 miles a year.

As expenses mount, policymakers are responding with short- and long-term relief plans, some aided by an infusion of federal funds.

Mills’ relief plan approved by the PUC will take $8 million from the federal Low-Income Home Energy Assistance Program to extend a $90 credit this spring to roughly 90,000 Mainers.

Money from the federal stimulus American Rescue Plan Act has helped bolster heating assistance this year, according to the Maine State Housing Authority, which administers the funds. The average per-household benefit in 2022 is $751, but is expected to climb to $824 based on energy price increases. The agency has issued more than $14.5 million so far to 19,353 households.

Prompted by AARP, officials and utilities are working to expand eligibility for another program that helps people pay their electric bills, the Low-Income Assistance Program. Roughly 90,000 customers who meet federal poverty guidelines qualify for the program, but only 16,000 households have enrolled.

Funding comes through a surcharge on electric bills and hasn’t increased since 2009. Helping all qualified customers would cost $44 million, which would raise the typical Maine residential electricity customer’s bill by $4 a month.

The proposal is being considered in a case at the PUC, which held a public hearing recently.

AT THE MERCY OF INDUSTRY

A proposal to convene a stakeholder group to study electricity affordability and have the PUC create a low-income utility relief program also is on the table. The idea attracted broad support at a public hearing this month in the Legislature, although the question of how to pay for additional relief measures promises to be a challenging one.

Ultimately, policymakers also may decide to take a fresh look at how the state’s standard offer supply bidding is structured.

Half of New England’s power is generated by natural gas, and high global market prices pushed up standard offer bids last fall. Harwood, Maine’s public advocate, called the jump “unacceptable” and said the bid process should be redesigned with an eye toward reducing volatility and ensuring more stable rates.

“We shouldn’t be at the mercy of the fossil fuel industry when gas prices go through the roof,” he said.

For people looking for answers now, a winter heating season guide assembled by the Governor’s Energy Office can help. The guide can be downloaded from the agency’s website. It covers topics ranging from where to find assistance programs to efficiency tips and how to get an emergency fuel delivery.

It’s best to avoid emergency fuel deliveries, however, because they can lead to inconvenience and added expenses. For customers not on automatic delivery, reach out early and let dealers know if a tank is running low, said Charlie Summers, president of the Maine Energy Marketers Association. Most established oil and propane dealers have been through rough times before.

“I encourage people to communicate,” he said. “They’ll work with their customers to assure that someone doesn’t go cold. Take a moment to check your tank and if it looks down, call your delivery people. They will work with you.”

Central Maine Power, which delivers electricity but doesn’t generate it, reached out in bills last month with a message about payment plans and other resources for customers struggling with the high charges.

Residents who toggle between multiple heat sources also may want to compare annual heating costs with an online heat-unit calculator offered by Efficiency Maine. It compares the relative cost of each option, when a heating unit’s efficiency and fuel prices are factored in.

The latest calculations show that a cordwood stove is the cheapest heat source, followed by a wood-pellet stove and a ductless heat pump. Next are boilers burning natural gas, then oil, then propane. Finally, electric baseboards. The difference is staggering – $1,169 for firewood compared to $5,282 for electric baseboards.

WHAT HAPPENS NEXT?

With March on the horizon, Mainers can at least hope the coldest days are behind them. Now it’s a matter of paying for the damage.

At Pam Partridge’s home, the cook stove may need less wood. But soon, February’s bills will be arriving.

“How am I going to budget this?” Partridge said. “I’m used to paying my bills as they occur. You wonder, ‘Am I going to have to change the way I live, the choices I make?’ ”

Moody-D’Angelo said her $600 electric bill is better than the $800 she figures it would cost to fill her oil tank for January, but the increase over last year is still baffling.

“When we got our January electric bill,” she recalled, “my husband said, ‘That’s going to be a hit this month. I hope this isn’t going to continue.’ It’s almost like sticker shock.”

Brann is angry and searching for answers. His first instinct was to blame CMP for his bill, reasoning it was payback for voters rejecting the New England Clean Energy Connect transmission line project. (CMP doesn’t set the standard offer price.) And he blames President Biden’s policies for high gasoline prices.

He plans to change electricity suppliers next month, with a slightly cheaper option he found through the Public Advocate’s office. But the extra $200 he needs to come up with for January’s electric bill, he had hoped to use that for other things in life.

“When I got hit with that light bill, it hurt,” Brann said. “When that money’s gone, we stay home. We can’t afford to go anywhere.”

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Original Source: https://www.pressherald.com/2022/02/20/in-a-cold-winter-maine-household-budgets-buckle-under-growing-energy-burden/