A bipartisan group of Maine lawmakers floated a new plan for a consumer-owned utility on Monday, with a political group saying that if the Legislature does not approve the measure, it will take the matter to a referendum.
The new proposal came after an earlier bill to form a consumer-owned utility to replace Central Maine Power and Versant Power died last year. Lawmakers and consumers have criticized the two publicly owned utilities for poor service, pointing to national ratings listing Maine as having the worst power outages in the nation.
“It’s an annual dishonor,” said Rep. Seth Berry, D-Bowdoinham, the co-chair of the Legislature’s energy committee and the sponsor of the bill.
Berry said the last bill, which he also sponsored, needed more time and some adjustments to bring more people on board. The text of the new measure is not yet public, but Berry said it has several significant changes from the previous one, including ownership and management of the new utility. It should be ready in a few weeks, he said.
The new bill would create a utility, the Pine Tree Power Co., which would be independent of the state and run by a board of seven voting members elected by Maine voters to six-year, staggered terms. Those members would appoint six expert advisory members and senior management.
Current CMP and Versant top management would not come to the new company, but employees and middle managers would be encouraged to stay on with a 6 percent transition bonus the first year and 4 percent the second year, Berry said. They would retain jobs and benefits.
The previous bill called for the governor to appoint 10 board members who would be confirmed by the Legislature. Outgoing Public Advocate Barry Hobbins said that independence is “a whole different ball game.”
He was impressed by the bipartisan nature of the call for the new utility, but he said two things to watch are the details of the bill and whether the Legislature has enough time to conduct due diligence on the plan.
“If there’s no economic exposure by the state, then it has a better chance of success,” Hobbins said.
Sen. Rick Bennett, R-Oxford, another top CMP critic and a bill co-sponsor, said the new proposal answers fiscal questions and confirms that the request to the Legislature to approve the consumer-owned utility is legal and legitimate.
“The continuing horrors of performance by CMP and to a lesser extent Versant beg people to consider a new ownership model for this critical infrastructure,” Bennett said.
Spokespeople for the two utilities said the government still would be involved in at least initiating their replacement. It would cost $13.5 billion to acquire both CMP’s and Versant’s infrastructure “with no guarantee of improved reliability or service,” said utility spokesperson Catharine Hartnett. Versant spokesperson Judy Long said a takeover would threaten the state’s ability “to keep pace with an evolving energy landscape.”
“Any initiative to introduce government-controlled power will cost Mainers a lot of money,” Hartnett said.
If approved, the consumer-owned utility would be a nonprofit, which means it would be tax-exempt and get low rates on loans. It would buy the transmission and distribution assets of CMP and Versant by floating its own bond, not by using a state bond.
Berry said the new plan more clearly establishes how the utilities’ assets would be valued and transferred. He credited a study by London Economics International done to examine how the previous bill proposal would affect Maine consumers.
However, Berry initially was a vocal critic of the report, which predicted that consumers could initially face higher rates because of the cost of assets and later see lower rates as the new utility matured. A subsequent study by energy economist Richard Silkman of Competitive Energy Services predicted $9 billion in net savings over 30 years for a consumer-owned utility with savings starting immediately.
A new political action committee, Our Power, also is bringing more heft to move the plan along. Berry is among the members of the group, which filed a report recently with the Maine Ethics Commission showing it has $67,250 in contributions and loans as of the end of March.
On its website, Our Power says that if the Maine Legislature and the governor fail to enact legislation to create a consumer-owned utility, it “will be ready to launch a citizens’ initiative to put the question to Maine voters to decide.”
Correction: A previous version of this story contained incorrect information from CMP about the cost to acquire the infrastructure of CMP and Versant.