December 10, 2019
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Islands will try again to join Emera Maine’s electric grid

Gabor Degre | BDN
Gabor Degre | BDN
Supplies and parts can be seen near the Swan’s Island Electric Cooperative office in this September 2016 file photo.
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PORTLAND, Maine — Driven by extremely high power rates, the Swan’s Island Electric Co-op plans to make another attempt at merging with Emera Maine, after regulators denied the proposal last month.

Ed Schwabe, president of the cooperative serving Swan’s and Frenchboro islands, wrote in an email that the island utility company is working to appease regulators with a new proposal that would put more of the financial burden of the merger on the island utility customers.

“We are encouraged by the commissioner’s wording and are working to submit a revised stipulation along the lines of what the commissioners are suggesting,” Schwabe wrote.

In a divided written opinion issued Tuesday, the two commissioners who rejected the deal wrote they could see approving the transaction if island residents foot more of the transaction costs.

At issue is about $746,995 that Emera would pay through the transaction, above and beyond the book value of the island utility’s assets. The amount would help pay off some of the utility’s existing debt and Emera Maine’s transaction costs.

The commissioners added that future investments to improve the undersea cable connecting the island to Emera Maine’s grid in Bass Harbor would put more of the island’s costs on the shoulders of mainland customers.

On the island, supporters of the merger are seeking lower electricity costs and opponents of the deal don’t want to see the end of the utility that electrified the island about 67 years ago. For island residents, the costs of maintaining the grid mean a guaranteed bill of at least $50 per month, before they even turn on a single light.

That high cost also was what brought commission Chairman Mark Vannoy and Commissioner Bruce Williamson to vote against the merger. They ruled the deal would constitute a subsidy from Emera Maine’s electric customers to the island, which they found was not in the public interest.

The Office of the Public Advocate, which represents ratepayers, argued in favor of the deal but noted that the “case presented a difficult tradeoff” in delivering benefits to the island by lumping in the costs of maintaining its grid with the rest of Emera Maine’s customers.

Under the sale, the cooperative’s roughly 400 members would be lumped in with Emera Maine’s 154,000 customers elsewhere.

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 a customer in the Bangor area, according to Emera.

Tim Schneider, the public advocate, told Maine Public in January that the decision raised for him the question of “whether this is an appropriate role for the commission, to charge people more based on where they live within the state.”

In her written dissent, Commissioner Carlisle McLean wrote that she agreed with many of Vannoy and Williamson’s findings, but that the commission was too strict in reviewing the terms of the merger proposal, submitted as a stipulation between Emera Maine and the cooperative.

“While this decision has given me significant pause and I agree with many of the findings of the majority, I dissent because of my view of the Commission’s role in reviewing a stipulation compared to a fully adjudicated proceeding,” McLean wrote.

Regulators are scheduled to take up the island cooperative’s revised stipulation during deliberations next Wednesday, Feb. 22.


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