Maine bill that considers creating public power authority advances to full Legislature, despite risks
A bill that could lead to Maine replacing its investor-owned electric utilities with a public power authority was amended and passed out of committee last week, although such a move could potentially be costly for customers.
The state legislature’s Energy, Utility, and Technology Committee (EUT) voted 8-1 to send LD 1646 to the full Maine Legislature for a vote. The amended version of the bill would establish the Consumer Ownership Evaluation Task Force, which would evaluate and provide recommendations regarding the operation of a consumer-owned transmission and distribution utility to replace the investor-owned electric companies in the state, which include Central Maine Power (CMP) and Versant Power, formerly known as Emera Maine.
“Versant Power is proud of our strong team of 400 employees in northern and eastern Maine who are committed to ensuring safe, reliable service for our customers, as well as the investments we’re making in our local communities,” said Judy Long, Corporate & Media communications specialist with Versant Power. “A government power takeover would put Mainers on the hook for billions of dollars of additional borrowing and spending at a time when our state already faces enormous challenges due to the pandemic. This bill does not guarantee lower rates or better reliability for customers, and would distract our state from the important work we’re doing to meet renewable energy goals.”
The bill was introduced by Maine Rep. Seth Berry (D-Bowdoinham), who is also the House chair of the EUT. “Now more than ever, our economy demands that we do things with thrift, ingenuity and a fresh look at local solutions that can lift all boats,” said Berry.
According to the Maine Policy Task Force (MPTF), citing an Office of the Public Advocate report, seizing assets from the two utilities could cost taxpayers $5.7 billion.
“Ratepayers would be responsible for paying the bonds used to buy CMP and Emera Maine’s assets, as well as the interest that accrues. For reference, the state is projected to spend approximately $4.04 billion from the General Fund in Fiscal Year 2021 to operate state government for an entire year,” MPTF said. “In addition, ratepayers would assume all the operational and financial risk under a public utility, whereas ratepayers and investors currently share this risk with investor-owned utilities. Frankly, LD 1646 would be an expensive undertaking that may not benefit Mainers in the long haul.”
Maine already has a number of consumer-owned utilities, including Kennebunk Light and Power, Madison Electric Works, and Eastern Maine Electric Cooperative. The new utility, if approved, would be known as the Maine Power Delivery Authority.
“Consumer-owned utilities are proven, including here in Maine, and they will give us just what we need at this time: lower-cost capital and local control,” said Rep. Nicole Grohoski, cosponsor of the bill who also serves on EUT.
But the Maine Policy Task Force looked at the scaling of a public utility because the current public utilities work on a much smaller scale. The average public utility in the state provides power to 9,200 people, while the Maine Power Delivery Authority would be responsible for providing power to more than 800,000 people.
Although LD 1646 has been debated for more than a year, Berry introduced additional amendments this week, which also would allow for a direct election of board members of the proposed Maine Power Delivery Authority.
“The bill enables the newly created Task Force to be the sole authority with pre-ordained conclusions favoring the adoption of a government-run utility — which is why it contains no public funding mechanism,” Catharine Hartnett, a spokesperson for CMP, added. “It calls for a group of political appointees to prepare a business plan to take over and run a multibillion-dollar asset system that serves over one million Maine people in a few short months with no experts to support the work. The City of Boulder, Colorado, has been trying to develop a plan for a legal takeover of its system serving 100,000 people for ten years at a cost of $23 million — and it still isn’t done.”
She added that there is no consensus over what the acquisition price for utility assets will be, “leading Maine into a costly and expensive process and litigation that could take many years.”
There have been studies on both sides estimating the costs, but the numbers between the two groups have been far apart.
“No one has yet identified the true costs of a government takeover of private company assets, or the number of years of litigation and expense this would take,” said Central Maine Power’s Executive Chairman David Flanagan said in a July 22 statement. “The Legislature will have to weigh the promises by political advocates inexperienced in running an electric utility against the billions of dollars of investment in critical infrastructure they would put at risk. There are simply too many unknowns.”
Because of COVID-19, the Maine Legislature is currently adjourned with no set date on when lawmakers will reconvene.
