SOUTH PORTLAND — City officials are awaiting public feedback about a nascent proposal to create a municipal energy company that would lower electrical rates for residents and businesses. 

The proposal would establish a non-profit energy company that would purchase electricity at wholesale rates from the ISO-New England grid, rather than the standard retail rate.

The city estimates the plan could save residents and businesses as much as 15 percent in electrical costs annually. A family of two adults, using 7,110 kWh of electricity a year, could save up to $107 a year.

“We have talked with several potential power brokers and we are using what I would say is a conservative savings,” said Ann Archino Howe, the city’s environmental and sustainability coordinator.

Last week, the city sent out about 9,000 notices to property owners, Howe said, and is just starting to hear back.

“We’re getting a very healthy expression of interest at this point,” she said.

In addition to lower electrical rates, Howe said the plan could make the city more attractive to businesses, since utility costs are often a barrier.

Feedback from interested residents is paramount, Howe said, because unlike other states who have similar aggregate power suppliers, Maine does not allow municipalities to automatically include all the city’s power users in the new company.

Howe said that individual residents and business owners will have to sign up for the new program.

Municipal and school buildings alone use 8 million kWh a year, with much of that demand coming from the waste-water treatment plant, said Howe. The city’s electrical contract expires in 2011.

According to the proposal, the non-profit company, SPEnergy, would be managed by a contracted power broker,  overseen by a board of directors consisting of a resident, a business member, an industrial customer, the mayor, the city manager, the finance director and three at-large members elected by the public.

“As a 501(c) (3) non-profit, the corporation will be able to have an ‘arm’s length’ from the political nature of municipal government, but will remain responsible to the ratepayer, who are very often the taxpayer,” the proposal states.

Ratepayers would still receive one bill from Central Maine Power Co.

If all goes well, Howe said the customers who choose to participate in the program could begin seeing lower rates within a year.

“We’re at the very beginning of this and are doing our due diligence,” Howe said. “Something might come up that stops the whole project.”

Howe said she has been in contact with communities nationwide with similar programs. But she said South Portland’s proposal is unique in that only a portion of the savings would be returned to customers.

The rest is eyed for an enterprise account that could be used to fund other energy-related projects that could reduce energy usages in city and school buildings, she said.

The proposal, for which the $250,000 start-up costs would come from existing tax increment financing accounts, is one of two major energy initiatives being explored by the city.

Last year, councilors heard a proposal to create a 25-megawatt power plant, fueled by natural gas, on the campus of National Semiconductor.

The “Combined Heating and Cooling Power Plant” would supply electricity for Fairchild Semiconductor and thermal energy to National Semiconductor at a time when electricity prices are reducing the profit margins for both companies.

The proposal was pitched as a way to retain the nearly 2,000 jobs in the semi-conductor industry, but the council has not publicly received an update about the plan.

Assistant City Manager and Economic Development Director Erik Carson said officials are still interested in the municipal power plant, but declined to provide details about progress being made and when it would come before the council again.

Residents interested in learning more about SPEnergy, the wholesale electrical company, should return forms provided in the mailing as soon as possible. Residents may also call City Hall at 347-4139 or email SPEnergy@southportland.org with their name and phone number.

Respondents will only receive information about SPEnergy and will not be enrolled in the program.

Randy Billings can be reached at 781-3661 ext. 100 or rbillings@theforecaster.net

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