Dozens testifying on bill to create consumer-owned utility in Maine

Lawmakers heard hours of testimony Thursday on a controversial proposal to force a buy-out of Maine’s two major power companies and create a nonprofit, consumer-owned utility serving most of the state.

To supporters, the proposed Pine Tree Power Company is a way for residents to assert control over Maine’s energy future while lowering electricity prices and improving the reliability of the power grid. If approved by the Legislature, the bill would go to a statewide referendum later this year, allowing voters to decide whether to stick with Central Maine Power Co. and Versant Power or make the historic transition to a consumer-owned utility.

Bill sponsor Rep. Seth Berry, a Bowdoinham Democrat and vocal critic of CMP, said Maine stands at a “historic crossroads” as the state strives to expand clean energy and reduce greenhouse gas emissions, in part by converting to electric vehicles and home heat pumps. Berry talked repeatedly about Maine gaining “independence” from foreign, investor-owned utilities that he contends put a higher priority on profits than in investing in Maine’s power grid.

“Every month right now, the 800,000, captive combined customers of CMP and Versant pay monopoly rent for the use of a monopoly grid,” Berry told members of the Legislature’s Energy, Utilities and Technology Committee, which he co-chairs. “With Pine Tree Power, we will pay a lower monthly bill and, equally important, it will no longer be a rental payment but rather a mortgage payment. We will save money, invest in and improve the grid, and build our own equity.”

Bill opponents, meanwhile, repeatedly portrayed the proposal as a “government takeover” of Maine’s utility grid and accused proponents of painting a skewed picture of the benefits of a consumer-owned utility by cherry-picking data. Instead, they predicted the initiative would trigger a long court battle and saddle ratepayers with billions of dollars in debt with no guarantee of lower rates or improved service.

Representatives of both CMP and Versant  predicted those court battles will only delay work to achieve ambitious climate-related goals adopted by the administration of Gov. Janet Mills and the Legislature.

“The idea that the government may force the divestiture of Maines two privately owned transmission and distribution utilities is perhaps the single largest variable in terms of disruption to that process,” said John Flynn, president of Versant Power. “To achieve our climate and grid modernization efforts, we need everyone working together. We have neither the time nor the money to waste on polarizing fights.

Seeking to counter supporters portrayal of money-hungry international companies, CMP and Versant officials both said their parent companies invest significantly more in Maine’s grid than the amount of dividends sent back abroad.

“We have seen over $3 billion of investment in CMP’s system over the last 10 years . . . and the equity infusions that have come to finance (projects) are far in advance of any dividends that have been taken out of Maine and delivered to our parent company,” said Eric Stinneford, CMP’s vice president, controller and treasurer.

More than 90 people had signed up to testify on the bill, L.D. 1708.

Berry’s bill — which is the third version of a proposal he first introduced in 2019 — would direct the Maine Public Utilities Commission to find CMP and Versant “unfit to serve” because of low customer satisfaction, reliability issues and high rates when compared to similar companies nationwide.

That would kickstart a process to use revenue bonds — not taxpayer-financed general obligation bonds — to buy out CMP and Versant’s transmission and distribution networks based on fair market value. While Berry and supporters estimate that figure at roughly $5 billion, the utilities and their backers have estimated the price tag could be $13.5 billion.

The Pine Tree Power Company would be run by an elected board, but day-to-day operations of the consumer-owned utility would be managed by a private company hired for the task. While Berry’s bill said existing employees would be hired by the new operator, that is a point of dispute between the two sides. And the 2nd District of International Brotherhood of Electric Workers came out in opposition to the bill this week, largely based on concerns about impacts on the unionized utility workers.

The consumer-owned utility would still be regulated by the Maine PUC and would serve the vast majority of electric customers in Maine.

A frequent and vocal critic of CMP, Berry first introduced a version of the bill in 2019 after the botched rollout of a new billing system, lengthy power outages and other public relations problems seriously harmed CMP’s reputation. The bill failed to garner majority support on an earlier committee,  however, prompting Berry to make numerous changes, including the provision to require voter approval of a consumer-owned utility.

Frustration and distrust of Maine’s two privately owned electric utilities was on full display on Thursday as supporters urged lawmakers to give Maine ratepayers more control over the state’s “energy future.” Supporters said local control over the grid will be even more important as more Maine residents purchase electric vehicles — a priority of the state’s official climate goals — and switch to solar power or heat pumps.

“An electric utility that consistently ranks the lowest in reliability and satisfaction in the country cannot be trusted to support or uphold the means to these necessities,” said Emily Rochford, a Burnham resident speaking on behalf of the Maine Youth for Climate Justice Coalition. “Establishing a consumer-owned utility cannot worsen the reliability, service, or affordability of electricity as these values are clearly not being held by the current investor-owned utilities.”

Berry’s bill has garnered support from Democrats, Republicans and independents in the Legislature but has yet to gain an endorsement from a key player: Gov. Janet Mills, who has set ambitious goals for reducing emissions of climate-warming gases. Both the Governor’s Energy Office and the PUC testified neither for nor against the bill on Thursday.

Sen. Rick Bennett, R-Oxford, said the state is “driving toward a carbon-neutral future” yet he accused the international owners of CMP and Versant of ignoring that future.

“This ownership model has been a disaster, draining money from Maine while leaving us with the most outages, the longest outages, the worst customer service and among of the highest rates in the country,” Bennett said.

Supporters of the bill, led by the organization Our Power, have estimated that it would cost roughly $5 billion to purchase CMP and Versant’s infrastructure. A study commissioned by CMP pegs that figure at $13.5 billion, anticipating a long and costly legal fight that the company said could take a decade.

“It is a government takings,” said David Littell, a former commissioner at both the Maine Department of Environmental Protection and the Maine Public Utilities Commission. While Littell represents Versant Power as an attorney, he told lawmakers he was testifying on his own behalf Thursday based on his years of work on utility and climate-related issues.

“This is going to be an extensive legal fight in state and federal courts, in front of the PUC and in front of (Federal Energy Regulatory Commission) if this happens,” Littell said. “Someone can’t show up and tell you they are going pay half of the value of your house and have you say, ‘Yes, that sounds fine to me. I am going to take it.’”

This story will be updated.

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