One of the country’s smallest electric co-ops dissolves on Maine island

Posted March 16, 2017, at 11:05 a.m.
Last modified March 16, 2017, at 8:29 p.m.

PORTLAND, Maine — Residents of Swan’s Island and Frenchboro will soon pay about $20 less each month for electricity as they dissolve one of the smallest electric cooperatives in the country.

Islanders voted Wednesday to sell their local utility to Emera Maine, a deal that will reduce flat fees they pay for maintaining the local grid, upgrade homes to smart meters and eliminate jobs at the cooperative.

Ed Schwabe, president of the Swan’s Island Electric Cooperative, wrote the deal could close as early as March 31.

“We are in discussions with Emera to determine a closing date and to establish a handover of responsibilities from SIEC to Emera on both islands in the next several weeks,” Schwabe wrote in an email.

The vote comes after a long approval process that pitted savings against local control of the cooperative that began providing electricity to the island nearly seven decades ago. The islands already are connected to the mainland power grid through 6-mile undersea cables that connect in Bass Harbor.

Dissolving the cooperative also means losing four full-time jobs and eight part-time jobs in the community, heavily depending on the fishing industry for employment.

Bonnie Turner, a Swan’s Island resident who has worked for the cooperative for 36 years, said last year that the sale represents “losing a way of life here.” And it leaves her at a personal loss.

“I’m 65. I’m not going to throw resumes out there, and I’m not going to running off every day to the mainland for a job,” Turner said in September. “I don’t see me throwing traps on a wharf or shoveling bait as sternman. That’s the big problem with the island — there’s no other work, especially for women.”

The U.S. Census Bureau estimated in 2015 that about half of the jobs on Swan’s Island and Frenchboro were in the category that includes fishing.

Turner was part of a minority of islanders who opposed the sale, which passed with a 265-29 margin.

[ Unplugging a way of life: Maine island eyes trading local control for cheaper electricity]

When the sale to Emera closes, residential island customers will swap out fixed monthly fees of $46.48 for a payment of about $27 each month. That’s less savings than an initial deal regulators rejected in January, saying it was too sweet for island residents.

Despite the reduced savings, members approved the second deal by about the same margin. About 90 percent voted in favor of both sale terms. The move required a two-thirds majority of co-op members.

Not factoring in the price of the actual electric supply, the average customer on Swan’s Island pays about $108.56 per month just for having that electricity delivered. On Frenchboro Island, the rate is about $127.85. That’s more than double the monthly delivery charges of $53.85 for the average customer in Greater Bangor, using 500 kilowatt-hours per month.

The initial proposal had Emera paying about $746,995 more than the book value of the island utility’s assets, the commission found. That amount would pay off some of the utility’s existing debt and cover some of Emera Maine’s transaction costs.

The three-member Maine Public Utilities Commission rejected that plan in a 2-1 vote, finding that Emera Maine’s other customers shouldn’t pay for the cooperative’s old debt.

The cooperative came back with a plan for residents to pay off costs over five years, through a $19.30 monthly surcharge. That surcharge will cover $613,513 of Emera’s “acquisition costs” and excludes about $133,000 in Emera’s costs for Geographic Information System mapping on the island.

After five years, the island’s residents stand to save even more in fixed charges, as they move to the standard minimum charge for customers in Emera Maine’s Bangor Hydro District. The current minimum is $7.70 per month.

The state’s ratepayer advocate expressed concern that the commission’s ruling set a precedent for utility’s to charge customers different rates based on where they live. The commission in its ruling Monday said the decision does not set a precedent and “reasonably resolves the specific facts of this case.”

 

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