SWANS ISLAND — Electricity customers here and on Frenchboro would pay sharply lower rates but could face longer waits for power restoration when outages occur if the Swan’s Island Electric Cooperative (SIEC) merges with regional electricity giant Emera Maine.
The co-op’s board of trustees will ask SIEC members to vote on the merger question in a straw poll at their annual meeting July 23.
As Emera customers, commercial electricity users on the two islands would pay an estimated 33 percent less than they do now. Electricity costs would be 46 percent less for most residential customers on Swans Island and 48 percent less for those on Frenchboro. Large residential users on both islands would see a 41 percent reduction.
Currently, the co-op buys electricity from Emera at the standard price. But, there is an added cost of transmitting it to the islands from the co-op’s meter in Bernard on Mount Desert Island. Also increasing users’ costs is “line loss,” the amount of electricity that is lost in transmission.
“It bleeds away from our submarine cables or when tree limbs touch power lines or from an old and inefficient transformer,” according to information on the co-op’s website. “Typically, SIEC experiences 16 percent line loss.”
With Emera, island customers would not have to cover those additional costs because the Maine Public Utilities Commission (MPUC) requires utilities to charge all of their customers the same rates, regardless of where they are.
Jeffrey Ellison, the SIEC’s general manager, said another factor contributing to its higher user rates is simply the relatively high cost of operating a small electric co-op.
“We have about 500 customers, and Emera has something in excess of 150,000,” Ellison said. “But we still need a manager, a bookkeeper, a billing clerk and other staff, so our overhead isn’t spread out over very many customers.”
The SIEC has three full-time and six part-time employees.
It also has a $1.8 million debt, which Emera would assume if a merger goes through.
“To recover its costs incurred from absorbing the SIEC, Emera Maine would most likely request rate adjustments across its customer base from the MPUC,” SIEC board President Ed Schwabe said in a letter to co-op members this spring.
The co-op’s debt, along with rising costs, were the main reasons it raised electricity rates 14.5 percent last year, Ellison said.
“It was due to inflation, and we also did an $813,000 reconstruction of the grid out here. So, between the interest on that loan and inflation, it was time for an increase. We hadn’t had a rate increase for seven years.”
SIEC officials say one of the advantages of having electricity provided directly by Emera would be “net metering.”
“If someone puts in solar panels or a wind-powered generator, and they generate more power than they use, that power goes back into the grid, and they get credit for that,” Ellison said. “Large utilities are required to do that. As a small utility, we are not required to do that and really can’t afford to do that.”
Another benefit of being served by Emera likely would be a boost to the islands’ real estate market, Ellison said.
“It would be more attractive to people to buy a home out here if the rates weren’t so high.”
SIEC officials say the disadvantages of having Emera take over, in addition to the loss of jobs for island residents, would include delays in the resumption of service in the event of a power outage. Emera would not have any personnel or equipment based on either Swans Island or Frenchboro. And if a line goes down, Emera would shut off power to both islands.
Scheduling work by electrical contractors also could take more time if the power company they have to coordinate with isn’t local.
The straw poll to be held July 23 will help the SIEC’s nine-member board decide whether to move ahead “to formally hammer out an agreement with Emera and the MPUC,” Schwabe said in his letter to members.
“Any proposed agreement … will be subjected to a second membership vote later in the year before it would be deemed final and suitable for submission to the MPUC for approval.”
The SIEC has been providing electricity to island residents since 1949.