An independent auditor’s report released by regulators Monday found that the management structure of Central Maine Power Co. and affiliated companies contributed to the poor service that has affected Maine electricity customers.
The 138-page report was initiated by the Maine Public Utilities Commission in January 2020 after it had investigated the utility and ordered it to compensate customers for billing errors and pay at least a $10 million management efficiency fee. Liberty Consulting Group of Pennsylvania performed the audit for the commission, which released the results Monday seeking public comment.
“We will determine appropriate next steps, which could include a formal proceeding, once we have more fully reviewed the report and any comments filed,” commission Chairman Philip Bartlett said.
The Liberty audit followed complaints by customers after the October 2017 windstorm that knocked out power to thousands of customers, some for as long as a week, and subsequent high bills. The storm coincided with the launch of a new billing system by CMP. The utility has ranked at the bottom of the list for customer satisfaction for the past three years, according to J.D. Power’s survey of business customers of 88 U.S. electric utilities.
The audit also comes the day before Gov. Janet Mills’ deadline to decide whether to sign or veto a bill to buy out the infrastructure of CMP and Versant Power to create a consumer-owned utility. CMP’s ownership structure and service issues have been key features of debate around that and the company’s $1 billion hydropower corridor proposal through western Maine.
Commission rulings in January 2020 closed out two years of public hearings and complex examinations on two cases — a metering and billing case and a rate case. At stake were rulings on whether the commission would hold CMP and its billing system responsible for the high bills, whether it would allow customers to continue deferring contested parts of high bills and whether it would allow CMP to raise rates and by how much.
The Liberty report laid some of the blame on internal turmoil after the Spanish multinational firm Iberdrola merged two U.S. subsidiaries to create Avangrid — CMP’s parent company — in December 2015. The report covered the five years after the merger.
While Liberty said it did not find Avangrid to be “a fundamentally or irredeemably flawed operation,” it found CMP’s parent company is still struggling to absorb the merged companies and is cutting or limiting resources to meet the earnings expectations of shareholders. The continued change, driven significantly by management’s “overemphasis on closing earnings gaps,” has resulted in cuts to service resources and rapid changes in personnel, the audit said.
“We found a number of structure and management contributors to service problems that CMP has experienced since 2016,” it said.
While the report said recent efforts to increase resources for Maine have produced service improvements, it questioned whether the efforts are sustainable because of ongoing management changes and “game-changing” opportunities like the corridor that might change the company’s objectives.
CMP Executive Chairman David Flanagan focused on improvements the report cited, including decreased customer complaints and meeting or exceeding utility commission performance measures for the past 16 months such as more than 99 percent of monthly bills being accurate and on time.
“This independent report recognizes that CMP is on the right path to overcome the organizational challenges that impacted our service to customers in the past,” Flanagan said.