ENMAX, the electric utility in western Canada that wants to take over Emera Maine, cut 4.5 percent of its workforce earlier this year and is planning to use debt to finance its purchase of the Maine utility from a much larger company.
Those factors have the union that represents Emera Maine employees, along with some state lawmakers, concerned that ENMAX’s proposed $1.3 billion acquisition of Maine’s second largest electric utility could lead to job cuts, rate hikes and a lower level of service for Emera’s 160,000 customers across eastern and northern Maine.
Members of the International Brotherhood of Electrical Workers Local 1837 raised their concerns this week at a news conference in Orono.
The concerns come after Emera Maine’s southern Maine counterpart, Central Maine Power Co., shed parts of its workforce in recent years and saw its profits increase while service quality suffered. And they come at a time when the sale will have to clear a higher bar than past utility acquisitions.
Under a bill Gov. Janet Mills signed into law in June, ENMAX must show that the sale would provide a net benefit to Maine consumers to secure approval from the Maine Public Utilities Commission. Previously, companies that wished to buy Maine utilities only had to prove the sale would not harm ratepayers.
“Practically, it raises the bar,” said Barry Hobbins, Maine’s public advocate who represents ratepayers’ interests before the Public Utilities Commission. “The burden is much higher.”
ENMAX is less than a sixth the size of Emera Maine’s current parent company, Nova Scotia-based Emera Inc., as measured by total assets. Despite Emera Inc.’s resources, Emera Maine finished dead last in residential customer satisfaction among other midsized utilities in the eastern U.S. for the past two years, according to surveys conducted by J.D. Power and Associates.
“If Emera couldn’t succeed without raising rates, how is ENMAX, a small utility owned by the city of Calgary, going to do it without raising prices and slashing jobs?” said Renee Gilman, an Emera customer service employee and union member.
ENMAX is a utility provider to more than 900,000 customers in Alberta, Canada, and it employs 1,800 people, according to its website. Emera Maine employs more than 400 people across a service territory of 10,400 square miles.
ENMAX spokesperson Diana Stephenson said that while the deal would be paid for with debt, the financing would have no impact on Maine ratepayers.
“We will not be depending on cash flows of Emera Maine to repay that debt,” she said. “We actually have sufficient cash flow to service the debt from our own operation.”
ENMAX has also committed in regulatory filings with the Maine Public Utilities Commission to not increase electric rates or cut jobs as part of the sale, Stephenson said.
“There are absolutely no anticipated job cuts. That is not part of this transaction,” she said. “The other commitment that we’ve made is rate stability. Rates would not be going up as a result of this transaction.”
Dick Rogers, business manager for the Emera employees union, said he’s neither for nor against the sale to ENMAX, and he said he hopes future meetings his union has planned with ENMAX will address employees’ concerns.
But as things stand now, Rogers said, “it seems likely that the owners will pursue large rate increases or staff reductions.” And Emera Maine is short-staffed already, he said.
“From customer service to power restoration, we believe we are currently minimally staffed at Emera,” Rogers said. “Any cuts would be devastating to ratepayers in the Emera territory.”
Rogers’ union recently agreed to a staffing agreement with Central Maine Power that would increase staffing by 60 workers.
Hobbins, Maine’s public advocate, said he would like to see a similar agreement between the union and Emera Maine. He also said the Public Utilities Commission has the authority to put conditions on the sale, including requirements around staffing and how long Emera Maine must wait until it requests another rate increase.
Emera Maine had asked the Maine Public Utilities Commission for an 18 percent rate increase in early March, weeks before it announced the proposed sale to ENMAX. The company withdrew the request about a month after the proposed sale announcement.
Philip Bartlett, the utilities commission’s chairman, said the commission “will be taking a very close look at every part of the transaction and the ability of ENMAX to serve Maine people and make sure that this is a good deal for the consumer,” he said.
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