November 08, 2019
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Central Maine Power pushes back at lawmaker’s drive for consumer-owned utility

Courtesy of Central Maine Power
Courtesy of Central Maine Power
The lattice towers Central Maine Power said it is proposing for its New England Clean Energy Connect hydropower line from Canada to Lewiston.

Central Maine Power’s top executive on Tuesday came out against creating a consumer-owned power company just as the Legislature’s energy committee launched into a hearing on the topic.

Doug Herling, president and CEO of CMP, said in a statement on LD 1646, a bill that would let the state buy the assets of CMP and Emera Maine to create the public Maine Power Delivery Authority.

“The Maine Power Delivery Authority bill, LD 1646, proposes to seize private company assets that are not for sale and put them into the public domain,” Herling wrote. “There are serious constitutional questions about this proposal and the business community should be concerned about this precedent.”

He also said Mainers should question how a public body could dedicate the necessary investment and the daily operating knowledge to manage electric service in Maine.

CMP invests more than $300 million in assets and infrastructure annually, he said.

Herling did acknowledge that CMP “fell short of meeting customer expectations” over the past 18 months.

Part of the impetus for the bill, which is co-sponsored by Rep. Seth Berry, D-Bowdoinham, a vocal critic of CMP, is the utility company’s high bills , metering problems and poor customer service following the October 2017 wind storm. At the same time as the storm, CMP transferred to a new customer billing system.

“We recognize that over the past 18 months CMP fell short of meeting customer expectations, and have responded by hiring more customer service staff, improving training and oversight and with plans to increase our field operations staff,” Herling said.

He noted that the Legislature has considered similar bills in the past, and said that in each occasion, “the Legislature has rejected such proposals in light of the highly questionable benefits, and the certain legal and constitutional challenges.”

“The business of daily electric transmission and delivery is complex, dangerous, and requires knowledge and expertise,” he said.

In the hearing of the energy committee, which Berry co-chairs, the Bowdoinham Democrat said the bill could let Mainers keep control of the electric supply and the money it generates in Maine. Emera Maine has a Canadian parent, and CMP has a Spanish parent company.

He also said a consumer-owned utility would offer electricity at lower prices than current rates.

Berry pointed to other utilities that were sold to the public, including the electric utility on Long Island, New York. Maine also has several consumer-owned utilities, including in Houlton and Kennebunk.

The proposed purchase of the Emera Maine and CMP assets, which total about $4.5 billion as of 2017 financial figures filed with the Maine Public Utilities Commission, would be made via low-interest bond financing.

Both proponents and opponents testified during the energy committee hearing about local utilities under consumer control in Maine.

John Clark, the former general manager of Houlton Water Co., a consumer-owned electric, water and sewer utility run by a six-member board, supported the proposal to create the Maine Power Delivery Authority.

“There are people in consumer power who have expertise,” he said. “And we have one master to report to, the customer … if we don’t do that we’re gone.” Clark was referring to the board, which is elected by the residents of Houlton, being removed if they don’t do their job.

However, Jeffrey Ellison, former general manager of the Swans Island Electric Cooperative, said the new utility is a bad idea. The Swans Island Electric Cooperative sold all of its assets to Emera Maine in 2017.

Ellison said managing the utility’s business, repairs, bucket trucks, OSHA and PUC reporting, and the necessary replacement of a line to the mainland caused the consumer-owned company to sell to Emera Maine.

He said electric rates on the island under Emera Maine have been halved.

Former CMP CEO David Flanagan said the bill to create the new utility fails to show what improvements will be made or identify priorities.

“It’s not clear if the creation of a government-owned utility would be worth the cost,” he said.

Verrill Dana attorney Jim Cohen said buying Emera Maine and CMP would cost $7 billion to $9 billion, more than the $4.5 billion currently projected based on financial filings with regulators. He figured the additional money was for the higher sales price for Emera, which currently is in the process of being sold to ENMAX Corp. of Calgary.

Cohen said making Emera Maine and CMP public would “amount to a death penalty for the two companies in Maine. It would throw Maine’s power grid into disarray for years.”

Maine Public Advocate Barry Hobbins, who spoke neither for nor against the proposed company, said it might make sense to conduct a feasibility study.

 



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