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Joseph W. McDonnell is a professor of public policy and management at the Edmund S. Muskie School of Public Service at the University of Southern Maine. He previously served as a senior vice president of the Long Island Lighting Company.
The Texas electric system failed to deliver power to thousands of customers during a polar vortex, leaving residents in a life-threatening condition without heat or water. The system failure served notice to the nation of the need for utility regulation to assure electric reliability — a lesson that should not be lost on Maine.
Texans were seduced by the pitch that unfettered competition would provide cheap power, but the price of that electricity came at the expense of weatherizing power sources, backing-up energy supplies, and connecting their electric system across state lines. These failures shared a common denominator: a weakened regulatory structure and blind faith in market forces to keep the electricity flowing.
The lucky Texans who did not lose power are now the unlucky recipients of eye-popping electric bills — the consequence of a rate structure based solely on supply and demand that allowed power costs to spike 10,000 percent during the outage. To make matters worse, a Wall Street Journal analysis revealed that Texans never did get lower bills from their deregulated system, but actually paid $28 billion more over the last two decades than under a regulated system.
Climate change is not only producing novel weather patterns — colder winter blasts and hotter summer spells — that place a greater burden on the electric system, but the response to climate change will also add more stress on the electric grid. Large nuclear and fossil-fuel baseload power plants are being replaced by many smaller environmentally-friendly wind and solar sources that lack the reliability of the traditional baseload generation and present technical difficulties as they are integrated into the established electric system.
To address climate change, many states including Maine have proposed aggressive renewable energy plans to reduce emissions by 80 percent over the next 30 years. But to achieve that ambitious goal, the energy source for transportation and home heating will have to shift to electricity, putting an unprecedented burden on the electric grid.
Utility regulators have the unenviable task of assuring the public of electric reliability as these new energy sources and the additional load are added to an old and fragile electric grid. Public utility commissions must at the same time maintain grid reliability, keep rate increases under control and achieve aggressive emission reductions. The balancing act is particularly challenging because reliability, cost control and pollution reductions compete directly with each other. The more you have of one, the less you may have of the others.
Texas teaches us of the danger of weakening the regulatory agencies as they try to balance these competing interests. Maine threatens to do precisely that today as various interests seek to scuttle the transmission power line the Maine Public Utilities Commission (PUC) approved to bring Canadian hydropower into Maine and New England.
After an exhaustive 20 month process of study and hearings with expert testimony from multiple interested parties and careful consideration of the economics, reliability, public health, safety, scenic, historic and recreational values as well as state renewable energy goals, the Maine PUC determined that the Clean Energy Connect transmission line would bring significant benefits to Maine’s electricity consumers and serve the public interest.
The commission took into account that the line would be constructed largely along an existing transmission corridor with only about one-third of the construction requiring a new corridor. It concluded that the benefits of the project significantly outweigh the disadvantages because the line will lower wholesale electric costs, improve reliability of the Maine transmission system, and diversify the state’s energy sources by bringing renewable baseload energy to the region.
But those objecting to the decision are now attempting to do an end run and overrule the PUC decision in the Legislature, the courts and with yet another public referendum. In attempting to undermine its regulatory agency, Maine risks going down the same road as Texas.
As we ask more from the electric system than ever before, we should heed the warning from Texas and support the only agency charged with serving the greater public interest in these matters. We cannot hold regulators responsible for reliability, rates and renewables unless we give them the last word in making these complicated decisions.