Maine policymakers convened this month to address an electricity affordability crisis triggered by a record winter cold snap and historic natural gas prices. On Jan. 27, natural gas prices on the New England grid hit their highest level since tracking began in 2003, driving wholesale electricity prices to $441.8 per megawatt-hour—more than three times the January 2025 average of $135.08 per megawatt-hour.
The surge prompted urgent discussions among state leaders about how to modernize Maine’s aging electrical grid and reduce reliance on natural gas for peak demand. Philip Bartlett II, chairman of the Maine Public Utilities Commission, described the situation as a crisis of affordability. “The biggest challenge we’re facing right now is affordability,” Bartlett said at a Feb. 5 legislative forum hosted by the nonprofit E2Tech in Augusta.
Why Natural Gas Prices Spiked
The region’s dependence on natural gas underlies the price volatility. Natural gas accounts for 55 percent of total electricity generation on the New England grid. During extreme cold, electricity demand soars and grid operators turn to natural gas to meet it—the cheaper resources like wind, solar, and nuclear run at full capacity first, but cannot keep up during peak demand periods.
The problem is that the region has limited pipeline capacity to deliver natural gas. When demand exceeds available capacity, prices spike. Dean Murphy, an economist with the Brattle Group consulting firm, explained the mechanism at a Feb. 11 presentation of a report commissioned by the Maine Department of Energy Resources. “When those pipelines get full, and there’s a limited amount of capacity, prices tend to spike,” Murphy said. “We’ve seen that very dramatically in the last couple of weeks, when natural gas prices in New England got to, I believe, the highest level ever.”
Maine’s Long-Term Vulnerability
Maine’s electricity costs are rising faster than most U.S. states. Between 2014 and 2024, Maine experienced the third-highest increase in average retail electricity prices among U.S. states, with rates climbing 55 percent over the decade.
Part of the problem is infrastructure age. Some components of Maine’s transmission system are 50 to 70 years old, according to Bartlett. Repairs and replacements are expensive—costs that accumulate in utility bills. Ratepayers are currently paying approximately $20 per month on average to repair electric infrastructure damaged by winter storms in 2024, a burden that could continue for some time.
“There’s a lot we need to do both in terms of replacing outdated assets but also modernizing the grid so that it can accommodate electric vehicles and other power sources that we want to put on the grid, and make it much more flexible,” Bartlett said.
The Solutions on the Table
Policymakers are exploring multiple approaches to lower electricity costs and improve grid reliability.
Bartlett emphasized the need to enhance the grid’s load flexibility—its ability to efficiently dispatch and conserve electricity during periods of high demand. Grid modernization, he said, would help the state accommodate new renewable energy and manage demand more effectively.
Jeremy Payne, a consultant who previously directed the Maine Renewable Energy Association, pointed to a different bottleneck: environmental permitting. Renewable energy projects such as wind or solar farms are taking too long to move through state environmental review, Payne said, delaying their connection to the New England grid.
“There are 49 other states competing for this investment capital, and, if we make it too hard, they’re just not going to look here anymore,” Payne said at the Augusta forum. “Ultimately, applicants need to be able to get ideally a yes. … But they’ll even take a no; they just want to get to an answer.”
Payne proposed that Maine bring in a third-party reviewer to supplement the state’s environmental permitting work and accelerate projects. He also called for incentive structures to encourage developers to build energy projects where they are most needed for grid resilience.
The Public Utilities Commission is already pursuing renewable energy development. The commission has a proposal request out for renewable energy projects in northern Maine and an accompanying transmission line to connect them to the grid.
The Affordability Trade-off
Modernizing Maine’s grid will cost ratepayers more in the short term. Bartlett acknowledged the tension between the need to invest in grid improvements and the immediate affordability crisis. “Being overly reliant on natural gas when we have a pipeline constraint system is just not workable,” he said. But “the path to getting there becomes so much more complicated when people are really struggling to pay the bill.”
The state’s energy leaders are trying to find a balance between price stability and affordability—a challenge that will likely occupy Maine policymakers for years to come.