Lawmakers heard testimony this week on the Maine referendum that would buy out the infrastructure of Central Maine Power Co. and Versant Power and put it under the control of an elected board.
The comments shed light on the complexities and controversy behind the proposal to create a new Pine Tree Power Co. In the balance lies the state’s need to upgrade its power grid and rein in escalating rates, no matter who controls the system.
Supporters said a locally owned company could be more responsible to customers, providing better service and lower rates. Those against it, led by the big utilities, said too much remains unknown about it, including how much the buyout would cost and how it would be run afterward.
Here’s more of what they told the committee and how it mirrors the campaign themes to come.
Support is rooted in complaints about the current utilities.
Supporters were largely concerned about current poor service and rising rates, with Elspeth Whitney, a summer resident of Swan’s Island, saying she was charged almost $2,075 by Versant for two months during which the house was unoccupied and the power turned off.
Auguste Brown of Portland said CMP, whose parent is owned by a Spanish conglomerate, is not accountable to Mainers.
“They are accountable to a small group of shareholders including foreign governments,” Brown said. “Pine Tree Power will give control back to the people and let customers decide what is important.”
Several supporters said the new nonprofit would get better borrowing rates, thus trimming long-term costs compared with publicly traded companies.
Environmental groups for the initiative include the Solar Energy Association of Maine, Sierra Club of Maine and the Maine Youth for Climate Justice.
Lawmakers who testified were split on their support as well. Sen. Rick Bennett, R-Oxford, supported the initiative, partly because the two large public utilities are foreign owned. Sen. Nicole Grohoski, D-Ellsworth and Rep. Jennifer Poirier, R-Skowhegan, also supported the measure.
Opponents cite deep uncertainty about the new utility.
David Barber, former CEO of Barber Foods and a business development specialist for current owner Tyson Foods, opposed the initiative. He wrote that the company with 350 employees in Portland needs reliable electricity for its food processing operations.
“Right now, there are no firm costs, no timeframes, no implementation plans, no meaningful details,” he wrote. “In the private sector when we’re considering an investment, especially a sizable one, we conduct due diligence.”
Groups against the initiative include the Maine Forest Products Council, the Maine Tourism Association, IBEW Local 1837, the Maine Affordable Energy Coalition, HospitalityMaine, the Maine Policy Institute and the Lewiston Auburn Metropolitan Chamber of Commerce. Representatives from CMP and Versant also spoke against the initiative.
Also opposing it was former Rep. Betty Ann Frederic, D-Skowhegan, who read a bipartisan letter signed by 81 ex-lawmakers opposing the proposal.
“Although our reasons vary, as do our political affiliations, we firmly believe that the proposed seizure of the state’s privately owned utilities would increase costs and insert partisan politics into the operation of Maine’s electric grid,” she said.
Large financial trade-offs are at the heart of the debate.
It still is not clear how much it will cost to buy the current utilities, set up the new company and upgrade and maintain the grid. The utilities have released an estimate pegging the buyout costs at $13 billion, but proponents say it will be billions less. The amount may be settled in court.
Public Advocate William Harwood, whose office has taken no position on the initiative, said costs for the new utility may be higher initially with acquisition and other costs, but over time there could be savings. That agrees with a 2020 study conducted for the Maine Public Utilities Commission.
Harwood said it is important to weigh the risks and uncertainties and understand that short term, there likely will be higher costs and maybe a delay in the kinds of investments like grid modernization.
“Longer term there is a real opportunity for savings as more and more capital investments get made down the road,” he said.
The vote is a few years in the making.
The referendum got its start last October, when Our Power submitted more than 80,000 signatures to the secretary of state for the proposal. The secretary’s office certified there were enough signatures to get the proposal on the ballot for a public vote in November.
The proposal, the brainchild of former Rep. Seth Berry, D-Bowdoinham, stemmed primarily from frustration over frequent power outages and slow responses to storm damage. CMP, the state’s largest electric utility, is in the crosshairs after it botched the rollout of its billing system, was embroiled in lawsuits over its controversial utility corridor and rate increases.
An earlier proposal aimed at creating the new company was vetoed by Gov. Janet Mills in July 2021. She said she understood frustrations with the utilities but was concerned about unresolved questions about whether customers would save money, what kind of structure the organization would take and the potential for drawn-out litigation that may delay infrastructure improvements.
There’s a competing effort to hamper the referendum.
A competing referendum also is in play. The secretary of state on March 30 released final wording on a question, backed by a political group almost solely funded by CMP’s parent, that would cap the amount of debt the new utility could assume without a public vote. That would force yet another vote on the idea.
It reads: “Do you want to bar some quasi-governmental entities and all consumer-owned electric utilities from taking on more than $1 billion in debt unless they get statewide voter approval?”