The Canadian utility hoping to take over Emera Maine wouldn’t raise Maine customers’ distribution rates before April 2021 and would keep the utility’s workforce intact.
Those are two of the pledges from ENMAX, the Calgary, Alberta, utility proposing to buy Emera Maine from its Nova Scotia-based parent, Emera Inc., as it seeks regulatory approval for the transaction.
The pledges are part of an agreement released Monday that lays out the proposed terms of the sale. The agreement has garnered endorsements from large electricity consumers and a number of parties with a special interest in the deal, including the state’s Office of the Public Advocate, which represents ratepayers in regulatory proceedings.
Under the proposed terms of the sale, the new owners would not request a distribution rate increase that takes effect before April 1, 2021, and ENMAX would seek to retain the current Emera Maine management team. The company also says it will maintain current employment levels and avoid layoffs and “geographical consolidation of employees” as part of the sale.
If the sale is approved, the stipulation agreement also states that Emera Maine’s new owners would maintain separate cash flows from its new parent company and retain the Maine company’s current governance structure of an independent board of directors.
In a Thursday morning hearing, the three-member Public Utilities Commission will evaluate the stipulation, and potentially make a decision on approval based on the information collected in the hearing.
“Emera and ENMAX will be here at the hearing, and the commissioners and staff will have the opportunity to ask some questions about the stipulation,” Public Utilities Commission spokesman Harry Lanphear said. “After that hearing, most likely this case would be deliberated by the commission very soon.”
The agreement appears to address some of the concerns Emera Maine workers and others have raised about the transaction and its potential effects on Emera Maine’s 160,000 customers.
In August, members of the union that represents Emera Maine workers said they were concerned the company would raise rates and cut jobs to make the finances of the $1.3 billion sale work. ENMAX initially said it planned to rely entirely on debt to finance its purchase of Emera Maine, but the company’s president and CEO later said the company would have some cash available, without specifying how much.
The Office of the Public Advocate investigated the sale conditions in detail before deciding to support the stipulation, said Maine’s public advocate, Barry Hobbins.
Under a bill Gov. Janet Mills signed into law in June, ENMAX had to show that the sale would provide a net benefit to Maine consumers to secure approval from the Maine Public Utilities Commission. Before this bill, buyers of Maine utilities only had to prove the sale would not harm ratepayers.
“Our office was one of the many stakeholder groups that felt that given all the factors, ENMAX passed the threshold of the net benefit standards,” Hobbins said. “We gave it a very, very thorough look and, based upon the review, others also were impressed with the responses that were demanded by our experts.”
One of the main reasons the Office of the Public Advocate approved the stipulation was the $5 million in low-income assistance that Emera Maine’s current parent has pledged to provide, according to Hobbins. The Public Utilities Commission will determine how this money is allocated, but it’s designated as “electric utility rate relief” for low-income customers.
“We wouldn’t have settled on this unless the low-income ratepayers would’ve been taken care of,” Hobbins said. “This is the primary mission of my office.”
The status of the sale will be determined based on what happens at Thursday’s hearing, Lanphear said.
“It’s hard to say exactly what the next steps are because there might be issues that come up at the hearing,” he said.