Maine’s Pine Tree Power campaign hits a snag

Published on June 22, 2021 by Hil Anderson


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The controversial plan to create a statewide municipal electric utility in Maine is expected to get back on track to a possible public vote as early as November despite a surprising vote in the state legislature last week.

The state Senate, on an 18-17 vote on Thursday night, failed to approve the final enactment of legislation, LD 1708, which had until then sailed through the state legislature. The bill authorizes a public vote on the proposal to replace the two investor-owned utilities (IOU) in the state with a nonprofit consumer-owned power provider to be called Pine Tree Power Company.

Two state senators switched their earlier “yea” votes due to 11th-hour questions over property taxes that the new company would pay to individual towns and cities. The vote came on the verge of the legislature’s scheduled adjournment until the end of June, but political observers in Maine expect the hiatus to merely give Pine Tree Power proponents the opportunity to tweak the overall plan so that it addresses the tax concerns and then get the bill on the docket for another vote.

Our Power, a coalition of business and environmental organizations backing the Pine Tree Power proposal, has taken the stance that Mainers would receive a better deal in terms of rates and service under a consumer-owned utility than they currently do under Central Maine Power (CMP) and Versant, the two primary electric companies that currently provide electricity to most of the state. Their basic argument is that the two IOUs are beholden to their shareholders and to foreign corporate ownership; Versant’s ownership is in Canada and CMP’s originates in Spain.

Opponents of the Pine Tree Power plan, however, have been adamant that Mainers should be careful what they wish for. “Seizing the state’s private utilities is a bad idea,” said Willy Ritch, executive director of Maine Affordable Energy. “It will lead to higher rates, put our progress on climate change on hold for a decade or more, and put ratepayers $13 billion in debt.”

The $13 billion would likely be the cost of buying out the two IOUs and would be on top of the operational and power-acquisition costs of maintaining service to consumers, who will be expecting to see their electric bills lowered and the level of service, particularly storm restorations, increase.

“The premise that CMP’s rates are high is false,” said CMP Corporate Communications Manager Catharine Hartnett. “CMP’s rates are among the lowest in the Northeast. In fact, our distribution rates are even lower than the largest consumer-owned utilities in Vermont and New Hampshire.”

Our Power has touted 2020 calculations by the Maine Public Utilities Commission showing that the nine small consumer-owned utilities serving 97 various towns, mostly along the coast of Maine, provided electricity at a rate 58 percent below the two larger IOUs based on a weighted average of the rate per-kilowatt hour. That figure translates to a potential annual savings for residential ratepayers of around $155 million.

Hartnett told Daily Energy Insider that Our Power’s numbers were not an “apples to apples” comparison due to the small size of the consumer-owned utilities in terms of customer base and service territory.  “We work very hard to keep our rates manageable and must balance with such things as storm response and system investment and maintenance,” Hartnett said.

Three former commissioners of the Maine Public Utilities Commission wrote an op-ed on June 14 in the Portland Press Herald that outlined their opposition to the bill. Tom Welch, Sharon Reishus and David Littell said they were concerned that the requirement to have Pine Tree Power run by elected offiicals would politicize the grid, noting further that elected politicians likely would not have the competence to run a state-wide utility.

Labor unions are also among the groups that have expressed opposition to a government takeover of Maine’s electric grid. They cite the uncertainty surrounding utility workers’ retirement benefits, and the concern that a government-controlled utility would likely underinvest in transmission and distribution systems in order to try to keep rates low, a dangerous and counterproductive prospect for utility sector workers.

“While any such takeover is negotiated and litigated for years and years, we believe there will be little incentive for companies to invest in Maine’s electricity grid, improve reliability, address climate change, and keep energy costs manageable,” said Michael Monahan, International Vice President of the International Brotherhood of Electrical Workers (IBEW) 2nd District, in a statement. “This will harm the outlook for Maine’s electricity customers and Gov. Mills’ carbon reduction plan for decades to come.”

The idea that Maine taxpayers will ultimately be on the hook for the cost of power acquisition by Pine Tree Power through ISO New England as well as capital costs for maintaining and expanding intrastate transmission will be a message pressed home by Versant, CMP and Maine Affordable Power during the two weeks the legislature is on recess as well as in the months to come.

Maine Gov. Janet Mills has said publicly that she is leery of the commitment that the Pine Tree Power idea would require and there is a definite chance she could veto the bill entirely, requiring proponents to start over and go the petition route to get the proposal on the ballot.

“The people of Maine want and deserve to take control of their energy future, and we will all have that chance in either 2021 or 2022,” said Stephanie Clifford, campaign manager for Our Power, after the Senate rejected the bill last week.

Regardless of what the legislature and the governor do in the coming weeks, CMP, along with Versant and Maine Affordable Energy, will have to convince the state’s voters that the current model is a good deal and that changing to Pine Tree Power would be more trouble than it is worth.