Why is an ARP needed?
The original Alternative Rate Plan (ARP) held changes in CMP prices below the rate of inflation from its launch on Jan. 1, 1995 through its expiration on Dec. 31, 1999. On March 1, 2000, CMP customers received a significant, one-time price cut funded by the State-mandated sale of CMP’s power plants. Also at that time, a new ARP was put in place to build on the success of the original plan. ARP 2008 continues this successful approach for another 5 years. ARP2008 calls for an initial distribution price decrease of $20 million on July 1, 2008, followed by implementation of a new five-year price-cap plan that begins January 1, 2009 and continues through December 31, 2013, with price changes occurring on July 1 in the years 2009 through 2013. The PUC adopted the original ARP to improve on traditional methods for setting prices. Other states have used indexed price-cap plans like the ARP to regulate telephone-utility prices. Maine was the first state to apply such a plan to electric utilitie
