Improving Electric Affordability Through Changes to Maine’s Standard Offer Service
A study by Synapse finds that a different approach to the Maine Public Utility Commission’s standard offer service approach could have offered electric bill savings of $743 million or 18 percent relative to what residential and small business customers paid from 2016 through 2025. It could have also lowered customer bill volatility.
In Maine and most other New England states, residential and small business customers can choose the entity that supplies their electricity. When customers do not choose an electricity supplier, they are enrolled in the default standard offer service (SOS). In Spring 2026, Synapse published an analysis, Overcharged in New England, describing the prices charged to residential SOS customers in restructured New England states from 2016 through 2025. We isolated the cost components of SOS and compared them to what SOS customers paid over this 10-year period. In Maine, we found that SOS customers combined paid an average of $7 million per month more for their electric supply than the cost to supply it based on the wholesale price of electricity. We found that this “premium” was surprisingly large in Maine and in the five other New England states we studied.
In Maine, as in most other states with competitive supply, SOS is procured through taking bids where the winning suppliers commit ahead of time to supplying the exact amount of electricity demanded at a set price for a future period of time, regardless of changes in usage by customers, or changes to the underlying costs of electricity. This is called full-requirements service and it is particularly prone to high premiums. Another option in use in other jurisdictions, the block-and-spot approach, is one in which suppliers commit ahead of time to providing energy in blocks of fixed amounts at a set price for a future period of time. Since the quantity of MWh is known in advance, the price is less risky to estimate. Spot market purchases and sales are then used to balance underages and overages between the blocks and the actual instantaneous load.
The Maine Office of the Public Advocate commissioned Synapse to evaluate whether a block-and-spot approach could have provided savings for SOS customers from 2016–2025 compared to the historical full-requirements SOS. We compared the historical costs of the Maine Public Utility Commission’s SOS for Central Maine Power (CMP), the estimated market costs of supply, and a set of counterfactual block-and-spot scenarios.
We found:
- A block-and-spot approach could have offered savings of $743 million or 18 percent relative to what residential and small business customers paid from 2016 through 2025.
- These savings translate to average savings of nearly $11 per customer per month or $136 per year.
- A block-and-spot approach could have lowered month-to-month volatility of the supply component of bills by 23 percent.