The BDN Opinion section operates independently and does not set newsroom policies or contribute to reporting or editing articles elsewhere in the newspaper or on bangordailynews.com.
Tina Riley of Jay served two terms in the Maine House of Representatives, serving both terms on the Energy Committee. She represents CMP ratepayers on the Electric Ratepayers’ Advisory Council. The views expressed in this column are her own and do not represent those of the ERAC or its members. Riley is receiving no compensation for any of her endeavors related to energy policy.
This November we will vote on whether to use eminent domain to replace Maine’s investor-owned utilities, CMP and Versant, with a consumer-owned utility. I appreciate consumer-owned utilities — I worked on the early editions of the bill. But I’m worried about this proposal.
The cost will likely be decided in courts, after years of litigation paid for by you and me. Proponents tell us that we’ll see savings “from day 1,” but a nonpartisan analysis says that is highly unlikely; bills could very likely go up instead and any savings we might see are well down the road. The risks that Mainers would take on are being largely ignored.
Pine Tree Power would have seven elected board members, who would appoint six more people to the board. All 13 would serve six-year terms with no term limits, and ratepayers will have no power to remove any of them. Only two board positions are required to have any experience with or understanding of utility operations; four would be advocates for various causes. The board would hire a management team and contract with a company to operate the utilities.
While investor-owned utilities profit off their investments in the grid, the consumer-owned utility’s operations contractor would profit from operating and maintaining the grid. One consumer-owned utility-friendly analysis suggests the contractor would get a fee of $15 million a year plus costs to run both CMP and Versant. That figure simply does not bear out; the Long Island Power Authority hires a similar contractor whose fee is currently over $80 million a year plus costs for its one utility.
In addition to those costs, utility employees would get bonuses of 14 percent over the first two years as well as contract upgrades (but the workers’ union still opposes the plan). It’s worth noting that Long Island Power Authority’s operations contractor struggles with cost and reliability problems severe enough that they have revamped the contract and continued to explore other options in an attempt to address its failures. There is no sure bet here.
Proponents point out that some consumer-owned utilities have lower rates. But the delivery rate for the Eastern Maine Electric Cooperative, the largest consumer-owned utility in Maine, is very similar to CMP and Versant’s rates. Those rates are roughly average in the state, with rates of small consumer-owned utilities running much higher or lower depending on their situation.
Many factors impact rates, and most of them will not change under the consumer-owned utility model. While we would no longer pay the utilities a profit, we would have a large “mortgage,” to pay off, as well as the cost of the years-long court battle and the operation contractor’s management fees. All this and more would be added to our bills, offsetting any savings.
For many years, Maine’s utility regulators backed off and handed the reins to the utilities, and over the long term, that hasn’t served us well. People are angry for good reason, and the Legislature and the Mills administration have taken that dissatisfaction seriously. Our democratic process is working as it should, with legislators clarifying Mainers’ expectations of the utilities and regulators following through with increased vigor. Maine’s Public Advocate is working aggressively on ratepayers’ behalf to ensure the Public Utilities Commission holds the utilities accountable.
The best way to serve ratepayers’ needs and meet our climate change response goals is to keep moving forward on this path. Taking on this expensive, years-long court battle would push us in the wrong direction. It just isn’t worth the risk.