Central Maine Power Co. will pay a $4 million penalty for service quality problems last year, the Maine Public Utilities Commission said today.

The penalty stems from a settlement agreement between CMP and the Office of the Public Advocate. It involves an elevated number of customer complaints last year, in excess of performance benchmarks set by the PUC under CMP’s alternative rate plan.

Most of the penalty will go to ratepayers, with a portion earmarked for low-income customers who were unable to pay bills in the economic downturn.

CMP has operated under an alternative rate plan since 1995. The plan provide incentives for efficiency savings; any savings above the predicted rate can be passed on to consumers and shareholders. 

CMP’s plan includes a service quality index that is intended to ensure that its service does not deteriorate under this rate plan. A penalty mechanism is triggered if CMP’s performance falls below established baselines for any of six separate service quality indicators. One of those indicators is the complaint ratio, which measures the number of customer complaints received by the PUC’s Consumer Assistance Division in a 12-month period.

The maximum penalty under CMP’s current plan in any year is $5 million.

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