How would you like to own a business providing a vital service to over half a million customers with no competition and a guaranteed profit? Not a bad gig. That’s the privilege Central Maine Power enjoys. But it’s not supposed to be a free lunch: in exchange for holding this lucrative monopoly, the utility company agrees to provide reliable service, charge fair rates, and deal honestly with customers.
For over a century CMP honored its end of the bargain. But that changed when Spanish energy conglomerate Iberdrola bought CMP in 2008. Apparently intent on maximizing quarterly returns, Iberdrola reorganized its U.S. holdings under Avangrid and slashed expenses. Profits soared as net income ballooned from $58 million in 2007 to $130 million in 2018. Yet running things on the cheap came with a cost to Maine businesses and residents: service quality plummeted, even as rates rose. Last year, CMP ranked dead last in the U.S. for reliability and service.
The decline hit bottom when CMP rushed out a new billing system in 2017 without adequate testing. The ensuing fiasco plagued thousands of customers with wildly inflated bills. When confused ratepayers called customer service they were told it was because of ” cold weather” or “faulty appliances.”
Internal CMP communications show that corporate leadership knew better but deliberately chose to deny responsibility. Customers paid the fraudulent charges to avoid having their power shut off — some went bankrupt or moved elsewhere. It took over two years of public outrage, investigative reporting, a lawsuit and stiff fines to force CMP to fix the issues.
Although the $10 million penalty assessed by the Public Utilities Commission was welcome, the PUC routinely hesitates to exercise its full authority to protect Maine ratepayers.
There’s a solution that will save Mainers a tremendous amount of money, improve reliability and service, and bring other benefits. Maine can revoke the monopoly franchise it granted CMP because CMP is failing to uphold its end of the bargain. This franchise is not a permanent entitlement — it’s a privilege contingent upon providing quality service, respecting customers, and behaving in good faith. CMP falls well short in all three areas.
Maine should replace CMP, as well as Maine’s other investor-owned utility, the foreign-owned Versant (formerly Emera), with a consumer-owned utility while leaving Maine’s existing consumer-owned utilities intact. A bill under consideration in the Maine Legislature — LD 1646, An Act To Restore Local Ownership and Control of Maine’s Power Delivery Systems — would accomplish this.
CMP and Versant would be paid fair market value for the grid infrastructure they give up. The new consumer-owned utility would not be part of the government nor would it require any tax money — it would be a nonprofit entity owned by the ratepayers and initially financed with low-interest loans.
This change would provide huge benefits to Maine. Rates would immediately drop when compared to CMP and Versant rates, saving Mainers over $9 billion by 2053 (including balance sheet assets).
Studies show that consumer-owned utilities consistently satisfy customers better than investor-owned utilities by providing more reliable service with fewer outages.
Rates collected by a consumer-owned utility would circulate within Maine’s economy rather than get siphoned off by foreign corporations.
A consumer-owned utility would allow Mainers to move more quickly toward a zero-carbon economy by modernizing grid infrastructure.
There would be more transparency and public input in decision making as customers would have a significant voice in how the MPDA is run.
Current CMP/Versant employees would have their seniority and pensions honored while enjoying greater job security.
CMP has deep pockets and legions of lobbyists and lawyers working diligently to bury LD 1646. The only effective antidote to corporate influence in Augusta is the voices of ordinary Mainers like you and me. Contact your state legislators and the governor today and urge them to support LD 1646.
Ed Geis, a CMP customer since 1998, runs a web development business in Camden.