From the Portland Press Herald
January 28, 2019
By Kevin Miller
The bill, which will be considered by the Legislature, would use low-interest revenue bonds to buy the transmission and distribution assets of Maine’s two largest for-profit utilities.
AUGUSTA — Critics of Maine’s two largest for-profit electricity suppliers unveiled a proposal Monday to create a “consumer-owned utility” that they say would be more beholden to ratepayers than shareholders.
The plan by Rep. Seth Berry, D-Bowdoinham, would require Central Maine Power and Emera Maine to sell all transmission and distribution assets to the proposed Maine Power Delivery Authority. Bill supporters said the authority would use low-interest revenue bonds to make the multibillion-dollar purchase, allowing the new consumer-owned utility to provide electricity to most Maine residents at lower rates than those charged by the two investor-owned utilities.
The proposal is, in part, a response to the controversies that have dogged CMP since an October 2017 windstorm left some customers without power for more than a week, as well as massive bill spikes reported by thousands of customers.
“Maine people want and deserve a utility that will keep the costs down and the lights on and put its Maine customers and workers first,” said Berry, the co-chairman of the Legislature’s Energy, Utilities and Technology Committee. “Our current utilities have failed us in every respect, with the clear exception of our own consumer-owned utilities.”
CMP spokeswoman Catherine Hartnett said few details of Berry’s bill – which is still in the legislative drafting office – have been released but the company has “strong concerns about the state seizing private property.” Hartnett questioned how the proposed authority would match the professional experience and on-the-ground knowledge of CMP workers.
“Every time it has come up before (in the Legislature), it has been rejected first of all because of the questionable benefits, but also because of the constitutional issues,” Hartnett said.
Emera spokeswoman Judy Long declined to respond to Berry’s specific proposal but said in a statement: “Emera Maine is proud of its strong team of employees in northern and eastern Maine who are working safely every day to deliver for our Maine customers. We are focused on maintaining and improving reliability and service.”
Berry said his bill would guarantee that current CMP and Emera workers can keep their jobs under the consumer-owned utility structure, although the bill language for accomplishing those protections was not available on Monday.
Dick Rogers, business manager of the IBEW 1837 union that represents 1,600 CMP and Emera workers, said he could not fully endorse the bill until his union members have had a chance to read it. But Rogers, who participated in Berry’s press conference, said what he’s seen so far “has benefits” and that IBEW 1837 “supports the consideration of any and all initiatives, including the Maine Power Delivery Authority, that would reposition Maine utilities.”
Berry’s bill likely faces a difficult path ahead in the Legislature because of the sweeping nature of the proposed changes as well as opposition from those uncomfortable with forcing a private company to sell its assets, even for “fair compensation.” Both CMP and Emera, which are owned by large foreign companies, will likely exert significant lobbying pressure on lawmakers.
Gov. Janet Mills, a Democrat who took office this month, has not taken a position on the measure yet.
“Governor Mills shares the goal of reducing electricity costs for Maine people and businesses,” Mills spokeswoman Lindsay Crete said in a statement. “She believes that Maine’s utility providers should be more consistent in their delivery of services and more transparent in their billing practices. Her administration will review this bill and monitor its progress through the Legislature.”
Residents of several Maine towns – including Kennebunk, Madison, Houlton and Calais – are already served by consumer-owned utilities. Nationwide, there are more than 900 nonprofit, consumer-owned utilities or electric cooperatives serving an estimated 19 million homeowners, businesses and other customers, according to the National Rural Electric Cooperatives Association.While the structure of consumer-owned utilities varies, Berry said the Maine Power Delivery Authority envisioned in his bill would be overseen by an independent, nine-person board of directors similar to the board that operates the Maine Turnpike Authority. Berry stressed that no taxpayer dollars would be spent on the power authority, which would have the ability to sell its own bonds – again, similar to the turnpike authority – in order to finance the purchase and any projects.
Berry acknowledged the price tag to buy out the transmission and distribution assets of the two utilities would be “significant,” but would not provide cost estimates in response to repeated questions from reporters. Annual reports filed with the Maine Public Utilities Commission pegged the value of CMP’s total assets at $4.5 billion at the end of 2017.
On several occasions, Berry compared the process to refinancing a home because consumer-owned utility ratepayers would pay roughly 3 percent on bonds rather than 10 to 12 percent now sent to investors by CMP and Emera.
“That’s money that would stay here, circulating in our economy,” Berry said.
Home customers of several of Maine’s consumer-owned utilities do pay less, according to rate comparisons posted by the Maine Office of the Public Advocate, which represents ratepayers in cases before the Public Utilities Commission.
CMP customers paid 15.83 cents per kilowatt-hour for combined transmission and distribution while Emera customers in the Bangor Hydro district paid 19.27 cents per kilowatt-hour. Ratepayers served by Kennebunk Power & Light, by comparison, paid 12.68 cents per kilowatt-hour while Houlton and Van Buren residents paid 9.53 cents and 8.96 cents per kilowatt-hour, respectively.
CMP has been in the news on a regular basis for well over a year.
The Maine PUC found that CMP as well as Emera responded “reasonably” to the October 2017 windstorm, which knocked out power to 467,000 CMP customers, but faulted the companies for not doing enough to keep customers updated on the outages. The massive outages also drew legislative scrutiny – with Berry often leading the charge – as did reports that nearly 100,000 CMP customers saw their electricity bills jump by 50 percent or more last year. The company is also involved in a controversial proposal to build a transmission line through western Maine to connect HydroQuebec to the New England power grid.
Kristy Pottle, a Belfast resident who co-founded the social media group CMP Ratepayers Unite after receiving a $600-plus electric bill in one month, cited the billing issues as a reason for creating a consumer-owned utility in Maine.
“It’s become very clear that CMP is not accountable to ratepayers, just to their own excessive profits,” Pottle said. “And it’s not just CMP. Other investor-owned utilities like Emera are accountable to their investors, not to the ratepayers.”
Correction: This story was updated at 11 a.m. Tuesday, Jan. 29, 2019, to correct the amount utility customers pay per kilowatt hour.
Posted under Fair Use Rules.
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