May 26, 2019
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The promise of public power, and what it means for Maine

George Danby | BDN
George Danby | BDN

State Rep. Seth Berry has done us all a big favor by proposing to buy out Central Maine Power and Emera Maine. Under his bill, a newly formed Maine Power Delivery Authority would buy out all CMP and Emera power lines, substations and other equipment. MPDA would then take over as our electricity provider.

How would this lower our bills? CMP and Emera borrow money at commercial interest rates for capital projects like power lines and substations and pass the cost along to us. As a public agency, though, MPDA would issue low-interest bonds, like a municipal water district. With no private investors to pay off, it would not have to earn a profit.

Berry estimates that these savings alone would lower our electricity bills by 15 percent. That fits the national picture: on average, government-owned power companies charge their customers 12 percent less than investor-owned utilities.

The counterattack was swift and predictable. Portland Press Herald columnist Jim Fossel condemned Berry’s proposal as “nationalization.” Sure, he wrote, CMP has given us lousy service while using its political clout to push for a high-voltage transmission line that most Mainers don’t want. And let’s not forget all those busy-beaver lobbyists it hires to make sure that solar energy won’t be competitive in Maine anytime soon. Forget all that, because a bedrock principle is at stake: protecting corporate property. “The very notion of forcing a private corporation to sell its assets to another entity through eminent domain — the centerpiece of this scheme — is controversial and ill-advised.”

Get it? Just leave everything to former Gov. Paul LePage’s lame-duck appointees on the Public Utilities Commission: a little regulation here, a few public hearings there, and CMP keeps its state-granted monopoly.

The problem with Fossel’s argument — which we will no doubt hear again and again — is that it’s nonsense. Congress created regulated electricity monopolies in 1935 to break up the large trusts that controlled three-quarters of the country’s power. In their place, smaller state-level companies were given exclusive service territories under two conditions: serve everybody and keep the lights on. Profit margins were guaranteed by state public utility commissions, which also allowed the companies to pass along most of their operating costs. But no company was supposed to exploit its monopoly without holding up its end of the deal. And even though Congress changed the law in 2005, that bargain still holds.

Around the country, one in seven Americans buys their power from government-owned utilities or cooperatives. The largest one is the Tennessee Valley Authority, founded in 1933 during the Great Depression. From the beginning, TVA was attacked as big-government socialism, especially when it “nationalized” the price-gouging Tennessee Electric Power Company. TEPCO sued and lost in the U.S. Supreme Court.

New York also depends heavily on public power. The New York Power Authority, founded in 1931, now generates almost all of the state’s hydropower: enough for 2.5 million homes. In 1998, the Long Island Power Authority took over transmission and distribution to 1.1 million customers formerly served by a private utility. In our democracy, public power is an option that we can choose where it serves us better.

Berry’s proposal raises a much more fundamental question: Who gets to control our basic resources? For decades, Big Business has been telling us that the less we expect from government, the better for everyone. But rising inequality, stubborn poverty levels and working families who show up at food pantries all tell a starkly different story.

The truth is this: we don’t live in a free-market society, if we ever did. We live under what political scientists often call “crony capitalism,” where Big Business pulls the levers of power and everyone else pulls the sled.

A century ago, our first Republican president, Abraham Lincoln, offered a different view: government, he said, should do for us what we can’t do better for ourselves. CMP and Berry have given us a wonderful opportunity to try that idea again.

Robert Wasserstrom worked for 35 years in the oil, gas and electric power industries before retiring in Camden.

 



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