Maine governor scuttles public vote on consumer-owned electric utility

Maine Gov. Janet Mills vetoed a bill that would have held a public vote in the fall on a controversial plan to replace the state’s two investor-owned utilities (IOUs) with a single consumer-owned power company to provide electricity to most of the state.

Mills said she still had serious concerns with the so-called Pine Tree Power Company plan and that further study was needed to clear up questions, and that simply turning such a complex issue over to the voters to decide would be “shirking my mandate as governor.”

“It would be the easy thing to do,” Mills told a news conference Tuesday. “But the voters elected me to evaluate policy matters in a fair and balanced manner.”

Stephanie Clifford, campaign manager for Our Power, a citizens coalition backing the Pine Tree Power proposal, has said public opinion is on their side and they will get the question back on the ballot, probably next year, through a petition drive. “With three-quarters of Mainers supporting our proposal and volunteers contacting us daily, we are confident we can collect signatures and succeed at the ballot box,” she said in a written statement.

The veto did not come as a big surprise since Mills had previously expressed reservations about launching Pine Tree Power, a consumer-owned company that would buy out the current IOUs – Central Maine Power (CMP) and Versant Power – and would be run by an independent board. Proponents of Pine Tree Power contend a public electric company would be more responsive to ratepayers and less focused on higher rates and profits than an IOU responsible to Wall Street investors and executives based outside the state.

“Gov. Mills made the right decision, as now is not the time for Maine to make a multibillion-dollar gamble on the state’s energy future,” Tom Kuhn, president of the Edison Electric Institute (EEI), said. “Continuing to try to move forward with a government takeover of the state’s electric companies would cost billions, could take a decade or more to complete, and is not in the best interest of Mainers. CMP and Versant Power are essential to the economic strength of Maine, and they are making demonstrable progress toward meeting their clean energy goals,” added Kuhn of EEI, the association that represents all U.S. investor-owned electric companies.

In justifying her veto, Mills, a Democrat and former state attorney general, referred to the various devils in the details of the ambitious plan. She cited potential problems including protracted litigation over the divestiture of Versant and CMP, delays in implementing carbon-reduction measures, and an overall lack of experience in utility regulation and operations on the part of the proposed new board. “The stakes are too high,” she said. “Basic due diligence requires that we have that information.”

Mills also described the Pine Tree Power proposal as a “rosy solution” and cited H.L. Mencken’s classic quote, “For every complex problem, there’s a solution that is simple, neat, and wrong.”

Opponents of the proposal, including Versant and CMP, have countered that the plan would leave Maine on the hook for not only the direct cost of the buyout, but also saddled with ongoing costs, including capital improvements, storm recovery and property taxes paid to cities and towns.

“CMP appreciates that Gov. Mills gave serious consideration to the implications for the state and all of Maine’s people given the complexity and costs involved,” said CMP Interim President R. Scott Mahoney. “CMP remains committed to offering quality customer service, providing reliable power to our customers and working to bring new sources of renewable energy onto the grid.”

The International Brotherhood of Electrical Workers (IBEW) also cheered Mills for her veto because employees of the two IOUs would become state employees, likely placing their hard-earned retirement benefits at risk. “We know how carefully the governor read this bill and listened to both sides and, in the end, she made the right decision,” said Michael P. Monahan, International Vice President of the International Brotherhood of Electrical Workers (IBEW) Second District.

Mills said she believed that CMP and Versant did need to “change their culture and the way utilities do business in Maine,” but she preferred a slower approach that could possibly involve ratcheting-up oversight and enforcement by the Maine Public Utilities Commission (MPUC).

“I applaud Gov. Mills for showing the courage to veto this ill-conceived legislation which, if it became law, would set Maine’s work on climate change back, trigger many years of costly litigation, and almost certainly result in higher costs to Maine’s electricity customers,” said Thomas Welch, former chair of the MPUC.  “The governor’s veto will allow the PUC to do its job without the distractions, inevitable uncertainty, and risk to the investment needed to advance Maine’s energy goals.”

Meanwhile, the MPUC announced Tuesday it had received the results of an independent audit of CMP’s management structure and would be seeking public comment on the report.