Bangor Hydro-Electric Company Granted Right to Charge 44% Less for Electric Heat--Rates Dropped to 1971 Levels.

BANGOR, Maine--(BUSINESS WIRE)--Aug. 3, 1995--Bangor Hydro-Electric Company customers can qualify to pay 44 percent less for electric heat this winter, thanks to a recent ruling from the Maine Public Utilities Commission (MPUC).

"The Commission has granted our request to lower prices for electric heat customers," said Carroll Lee, Vice President-Operations. "These reduced prices will allow electric heating systems to remain competitive with the price of alternative heating systems. To provide further assurance to our customers, we have agreed to meet conditions imposed by the Commission intended to reduce the risk of price changes on customers," added Mr. Lee. "The most immediate beneficiaries of the lower prices will be existing customers who already use or have the capability of using electricity for heating. At this price, these customers can enjoy the environmental and safety benefits of electric heat at a cost comparable to alternative fuels."

"In the future, as potential customers become aware of the competitiveness of electric heating systems, we expect more and more customers will decide to install electric heat in order to take advantage of this new market price," said Mr. Lee. "Since a market-priced cost for electricity is a new concept, Bangor Hydro (together with the MPUC) has developed a program to protect new electric heating customers from rate increases beyond what is competitive with oil," Mr. Lee added. "In the unlikely event that electric heating costs increase beyond 40 percent of the equivalent price of oil during the first six years of the program, we will provide interest-free loans for customers to replace electric systems with an alternate fuel."

The rate is available for residential customers who can heat 50 percent of their dwelling electrically. The rate is based on a cost structure where the price of electricity decreases as consumption increases during the winter months.

The price for the first 600 KWH (the average amount of electricity used per household) will remain at the current standard residential rate of $.127 per KWH. For any additional KWHs, the price will drop to a competitive level. For the upcoming heating season of November through April, that will be $.05 per KWH. The savings for the average residential electric heating customer are anticipated to be approximately $150 over last year's costs. As with any competitive priced energy product, Bangor Hydro's new heat rate is subject to change. As oil prices change, the MPUC allows Bangor Hydro to alter its prices up or down twice a year after customer notification.

Bangor Hydro's new heat rate is designed to offer electric heat at prices equivalent to oil heat when the costs of installation and operation are included. In other words, over a 20-year period, the cost to own and operate either system is comparable.

"Following a temporary heat rate reduction previously granted, the Commission has again supported our efforts to reduce prices," Robert S. Briggs, Bangor Hydro's President and CEO stated. "The Commission's willingness to let Bangor Hydro assume the risk of lowering prices to allow our customers to more fully benefit from the value of electric is very encouraging. We are hopeful that lower prices will encourage more people to use electric heat. Increased sales will help insure lower prices in the future for all our customers by spreading the fixed costs over more sales. An added reason to support the increased use of electricity is the environmental benefit gained by reducing the use of fossil fuels."

Customers who previously signed up for Bangor Hydro's temporary electric heat rate will be automatically converted to the new rate. New customers interested in talking with an Energy Advisor about electric heating options, should call 1-800-499-6600.

Bangor Hydro-Electric Company is the second largest electric utility in Maine. It serves a population of about 195,000 in an area encompassing approximately 4,875 square miles in eastern and east coastal Maine. The Company is a member of the New England Power Pool and is interconnected with other New England utilities to the south and with the New Brunswick Power Corporation to the north.

CONTACT: Bangor Hydro-Electric

Bill Cohen, 207/990-6935