AUGUSTA, Maine — Fifteen years ago, Maine restructured its electricity business. The state required power companies to sell off their generating facilities and become only transmission and distribution companies.
Gov. Paul LePage says policy has failed and wants a major restructuring of the electricity business.
Starting in March of 2000, Mainers were supposed to gain an advantage by creating competition in the electricity business. That would be done by separating the generation of electricity from its transmission and distribution.
For more than a century, electric companies distributed the electricity they generated or purchased and were regulated by the state through the Public Utilities Commission. Power companies enjoyed a monopoly in the areas they served, with rates subject to PUC oversight.
Restructuring was supposed to lower overall bills because the generation market was open to competition, while distribution remained a regulated monopoly. LePage says it clearly hasn’t worked as planned.
“You have an electricity bill at the end of the month?” LePage asked. “You tell me — I mean, I know that my bill is three times as much as someone living in Montreal.”
LePage said neither homeowners or businesses have benefited from the restructuring.
The governor is proposing transmission and distribution companies, including Central Maine Power and Emera Maine, be allowed to build or acquire generating facilities, with the approval of the PUC, reversing the policy change of more than 15 years ago.
“It’s the worst thing we could have done,” LePage said. “I look at what’s happened to our costs. They go up rapidly. They go up by huge amounts every year.”
In 2014, Maine residential customers paid, on average, 12.66 cents per kilowatt hour. The national average was 10.45 cents per kilowatt hour. But Mainers still were paying the lowest rates in New England — nearly 3 cents less than neighboring New Hampshire and nearly 5 cents less than Connecticut, which paid nearly 17 cents per kilowatt hour.
Rep. Mark Dion, D-Portland, co-chairs the Legislature’s Energy, Utilities and Technology Committee. He said he will need to be convinced LePage’s proposal to go back to the world of pre-2000 is the right one.
“Our predecessors had determined that returned the greatest benefit for our ratepayers, so that is where I will begin my line of questioning on this policy,” Dion said. “What advantage to the ratepayers? Or are we asking them to take a risk on an old idea?”
Dion said the governor has several bills pending that would change Maine’s electricity policies, and they should be looked at in their totality. Another measure would do away with technology-specific goals for state energy sources.
Pat Woodcock is the director of the Governor’s Energy Office. “We have a goal for wind — the amount of wind to be installed in the state,” Woodcock said. “We have goals for solar, we have goals for hydro. Actually, I look at energy policy as technology is a means to carry out policy. The actual policy that we should be looking for in our state is lower pollution, lower cost.”
Woodcock said there are other bills coming from LePage this session to change Maine’s energy policy, ranging from encouraging development of new sources to improving energy efficiency So far, none of those measures has had a public hearing.
This article appears through a media partnership with Maine Public Broadcasting Network.