In tomorrow’s ballot, Mainers are poised to vote on an unprecedented plan to rid themselves of the state’s two largest electric utilities and start with a non-profit.
But voters are being offered a false choice, since it will not affect how their power is generated, and one of the two companies that is set to be booted out is already a publicly owned company, controlled by the city of Calgary, Canada.
There is no option for power to be generated locally, thereby reducing transmission costs, nor increasing local control of energy. Nor is there any reference to renewable energy.
The proposed takeover of two investor-owned utilities that distribute 97% of electricity in the state would mark the first time a U.S. state’s utilities were forcibly removed at the same time. The referendum calls for dismantling Central Maine Power (CMP) and Versant Power and replacing them with a nonprofit utility called Pine Tree Power to operate 28,000 miles (45,000 kilometers) of transmission lines.
CMP serves more than 600,000 customers in central and southern Maine, while Versant Power delivers power to more than 165,000 customers in northern and eastern Maine. Combined, the two investor-owned utilities (IOUs) serve about 97 percent of the state.
CMP is a subsidiary of Avangrid, which is is owned by the Spain-based Iberdrola. That company’s primary shareholders include the governments of Qatar and Norway.
Versant is a subsidiary of Enmax, whose sole shareholder is the City of Calgary in Canada.
Across the country, ratepayers who are unhappy with their utilities are watching what happens when Mainers vote on Nov. 7 in the off-year election.
Question 3 asks:
“Do you want to create a new power company governed by an elected board to acquire and operate existing for-profit electricity transmission and distribution facilities in Maine?”
A “yes” vote on Question 3 would form The Pine Tree Power Company.
The first-of-its-kind plan would create a new “consumer-owned utility” (COU) would still be tasked with operating, maintaining and upgrading the state’s power grid. To do that, Pine Tree Power would buy out CMP and Versant’s assets.
While it’s still unclear how much that would cost, the new utility would pay for it by borrowing against future revenue. Supporters of the proposal say as a non-profit, the new utility could qualify for lower-interest loans that would be paid back through ratepayer revenue with no taxpayer dollars being used.
Pine Tree Power would be independent of the state and instead be operated by a 13-member board. Seven members would be elected by Maine voters. The other six, who have been labeled as expert advisors, would be appointed by the elected members.
To run the grid and continue supplying electricity to the state, the board would also be tasked with appointing Pine Tree Power’s senior leadership and hiring a private grid operator to over see the day-to-day operations like billing, metering and customer service. That operator would be chosen through a competitive bidding process.
The new utility would still be regulated by the Maine Public Utilities Commission (PUC).
Maine utilities are spending more than $35 million blitzing ratepayers with ads warning that the measure threatens to create massive public debt, unending legal fights and soaring bills for customers.
“The burden of the debt would be enormous,” said Willy Ritch, executive director of Maine Affordable Energy, a political action committee funded almost entirely by Central Maine Power’s parent company, Avangrid. Central Maine Power spokesman Jonathan Breed argued that the company has resolved billing and customers service problems that earned it millions of dollars in fines from the state, and that the challenging topography of Maine accounts for the high number of outages. Breed said the company could not respond to the specific complaints of McCurley and other customers interviewed by The Post for privacy reasons.
Yet all the spending on advertising disparaging the ballot measure is giving customers one more grievance with firms they say should be investing the money in bringing them better service. Pine Tree Power supporters are working with a meager $1 million budget but some high profile support, including the Sierra Club, Sen. Bernie Sanders (I-Vt.) and environmentalist icon Bill McKibben.
If Mainers vote “no” on Question 3, everything would stay the same. Right now, households get to choose who supplies their electricity in Maine, but not who delivers it.
Power delivery is a monopoly in Maine, since those utilities are responsible for all the infrastructure. That includes substations and transmission lines to distribution lines and poles, plus meters that connect to your home or business.
So if Question 3 fails, most Mainers would continue to get their electricity from one of the two largest power utilities.
CMP serves more than 600,000 customers in central and southern Maine, while Versant Power delivers power to more than 165,000 customers in northern and eastern Maine. Combined, the two investor-owned utilities (IOUs) serve about 97 percent of the state.
CMP is a subsidiary of Avangrid, which is is owned by the Spain-based Iberdrola. That company’s primary shareholders include the governments of Qatar and Norway.
Versant is a subsidiary of Enmax, whose sole shareholder is the City of Calgary in Canada.
The two utilities are regulated by the Maine PUC, which approves rates and makes sure the companies are meeting service standards.
What locals think about Question 3
Last December, Ellen McCurley was settling into a calm new life, savoring sunsets from the porch of a modest riverfront home with her dogs Sadie and Maisie, when a notice from the electric company turned it all upside down.
It was a nearly $1,000 bill from Central Maine Power, more than quadruple what she paid the month before. And the bills kept soaring, topping out at $1,200 by the end of March. She was sure it was a mistake but couldn’t get the company to reduce the charges.
“I would call them and say: ‘This is not possible. Can you help me solve this?’” recalled the 64-year-old social worker, who shared copies of her bills with The Washington Post. “I felt like I was going crazy.”
So McCurley began working to drive her power company out of business, joining a burgeoning national movement of consumers frustrated with power companies that they feel are unaccountable to ratepayers, and that have taken center stage in disasters such as this summer’s devastating wildfires in Maui.
The epicenter of the resistance is in Maine, where voters — who have wrangled with outages, billing mishaps and some of the highest electricity prices in the country — are joining a campaign to replace the state’s investor-owned electricity companies with a nonprofit utility. The campaign has drawn a coalition of the frustrated that cuts across ideological lines, including fed-up ratepayers and climate activists accusing the utilities of slow-walking the transition away from fossil fuels.
However things play out on Election Day, the Maine campaign is a sign of what utilities nationwide increasingly face as consumer frustration boils over. The companies are under more stress than at any time in recent memory, forced to respond to a confluence of events that demand nimble action while operating under a dated financial and regulatory model.
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Brian Johnson near downed trees on his road in Harpswell, Maine (Andrew Dickinson for The Washington Post)
And consolidation in the energy industry has left the impression among many ratepayers that their local utility — long considered part of the community fabric — has become overly focused on drawing profits for out-of-state investors.
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“We are in a challenging time, and that is putting strains on the relationship between utilities and their customers not seen in decades,” said Michael Wara, an energy scholar at Stanford University.
As challenges mount, interest in taking utilities out of corporate control is growing. In California, state leaders had mulled a takeover of Pacific Gas and Electric after deadly wildfires pushed the company into bankruptcy. Hawaiian Electric, facing scrutiny of its equipment’s role after the Maui wildfires this summer, finds itself targeted by activists for dissolution.
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A flash point in the debate is the way corporate utilities make their profits, collecting hefty interest payments from ratepayers on the big power grid projects the companies bankroll. Pine Tree Power proponents say a public utility can save ratepayers billions on such investments, as its goal would be financing projects as cheaply as possible rather than generating profits for shareholders.
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“If these utilities were run by the government, at least there would be some responsiveness,” said Gerald Singleton, a California attorney whose firm has represented 15,000 plaintiffs in wildfire lawsuits against utilities. “If you don’t like how it is being run, you can vote the people in charge out. With investor-owned utilities you are just stuck.”
But putting the government in charge can bring its own set of problems.
Publicly owned utilities are “not a panacea,” said Severin Borenstein, director of the Energy Institute at the University of California at Berkeley’s Haas School of Business. “They might be better in many cases, but it is easy to oversell them with the idea that the power company will finally operate in the public interest if it is just owned by the public. People who think that have never been to the DMV or dealt with the Social Security office.”
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Marcia Taylor of Cape Elizabeth holds a “Vote Yes on 3? sign during morning rush hour traffic in South Portland, Maine. (Andrew Dickinson for The Washington Post)
Publicly owned utilities are not a new idea. They are operating in 2,000 communities, providing electricity to 49 million people, according to the American Public Power Association. But they are generally small outfits, serving a city or county as opposed to an entire state. An exception is Nebraska, where there have not been any investor-owned utilities since 1946.
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Many public utilities are ranked higher in providing customer service and offer lower rates than comparable investor-owned utilities. But there have also been epic failures, such as in Puerto Rico, where years of mismanagement left ratepayers with an unstable grid and inflated rates before the utility went bankrupt in 2017.
The proposal in Maine would replace Central Maine Power and Versant with a nonprofit run by a board of seven elected members and six other people they select. Pine Tree Power would take control of the state’s power grid, buying out the existing utilities. It would be a messy and litigious process, and there is heated dispute over the price tag, with the exiting power companies warning ratepayers it would cost more than $13 billion but other analysts saying it would be far less.
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Birds fly off their power line perches along Route 1 in Scarborough, Maine. (Andrew Dickinson for The Washington Post)
It took the community of Sacramento more than 20 years from the time voters chose to break away from Pacific Gas and Electric until the courts finally gave the plan the green light in 1946. Kicking out a corporate utility has only become more complicated since then.
Gov. Janet Mills, a Democrat, is urging voters to reject the Maine proposal, warning that enmeshing the state in a decades-long battle over control of utility poles and transmission lines would be a costly mistake. The International Brotherhood of Electrical Workers is also working against the measure. Central Maine Power and Versant, for their part, charge that the Pine Tree Power campaign is overpromising, noting that the primary reason electricity prices are so high in Maine is because the cost of power generation has spiked, and the utilities have no control over that. Under Maine law, utilities are prohibited from controlling generation, which is managed through contracts negotiated by the state.
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Steven DiMillo, manager of DiMillo’s on the Water in Portland, Maine. (Andrew Dickinson for The Washington Post)
“The last thing we should be doing is trying to force an acquisition by eminent domain to buy something that, once we buy, we don’t know how to run,” said Fred Forsely, the chief executive of Shipyard Brewing Co. and a public face of the opposition campaign. The sentiment is shared by the owner of another well-known business in Portland, DiMillo’s on the Water, which for decades has served tourists lobsters in a former 206-foot-long car ferry converted to a restaurant. “I never look at government to fix something for us,” said Steven DiMillo, who manages the business.
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Yet a growing number of Mainers appear to have an equally low opinion of their power companies. Among them is Brian Johnson, a retiree in Harpswell who worked as a utility industry consultant for decades.
Johnson is cleareyed about the risks of a Pine Tree Power takeover. But after 17 power outages at his home over the course of a year and explanations from Central Maine Power that he found unconvincing, Johnson began investigating how the firm is spending its profits. He decided ratepayers would be better off if the company were out of the equation.
“Senior management in many of these companies has lost touch with local communities,” Johnson said. “This has them scared, and for good reason.”
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