Powering Strong Communities

The Referendum in Maine Was Defeated, yet Momentum for Public Power Is High

In Maine, on Nov. 7 voters faced the question of whether to create a publicly owned electric utility that would assume operations from the two investor-owned utilities that currently serve more than 95% of the state’s residents. While the referendum failed, and the formation of the community-owned utility won’t move forward in Maine at this time, there is a silver lining.

The effort in Maine got considerable attention in state, regional, and even national media. This attention has shown cities and towns across the country that they have options. Franklin Roosevelt’s speech about public power as a “yardstick” was nearly a century ago, yet the general public may often forget its premise: If the incumbent utility is not meeting the needs of its customers, communities can take another path.

The citizens of Maine have made it clear that they expect more for their communities and from the incumbent utilities. There are several recent examples of public power initiatives that did not result in the formation of a new utility, but nonetheless brought important benefits to the community because of concessions offered by the incumbent utility. These include lower rates, improved service, and higher standards for reliability.

The many ongoing municipalization efforts across the country have brought attention to issues inherent in private ownership of utilities, and the promise of public power.

A Matter of Money

The vote also reflects, in part, the struggle public power advocates are up against. While polls show strong support for the idea of public or government ownership of electric utilities in general, once the opportunity arises to put the idea to a vote in one's community, the incumbent utility goes on a massive defense campaign. Given the economic power of these corporations, they can afford to shell out big money to mount sophisticated campaigns that sow doubt and disinformation about what could happen should they get bought out. In Maine, the two IOUs spent nearly $40 million to defeat the effort, compared to the approximately $1.2 million public power advocates raised for their campaign. This outspending and the tactics used were similar to other recent efforts where the votes did not ultimately go in favor of public power, including in Boulder and Pueblo, Colorado.

In local campaigns, IOUs rely on messages that raise doubt about the formation of the public utility and the potential costs. Often, this messaging also clouds the fact that the biggest concerns — such as how long it will take and how much it will cost to buy the system — are factors driven by the incumbent.

When a municipalization effort arises, incumbent utilities will make efforts to drag out the process, oppose the effort, and inflate the price of the utility. These messages aim to create worry over the public cost of a buyout and do not recognize the cost of maintaining status quo. When it comes to long-term financing and costs, public power has the stronger track record of achieving more favorable financing and paying off debts.

Harnessing Awareness

Public power advocates have the data on their side. Community-owned utilities are more reliable, more accountable, and more affordable. These facts are why there remains incredible momentum for public power across the country. Since electric utilities were first formed, there has always been interest in the public power business model, and lately, the interest is on the rise. Today, new pushes for public power are gaining momentum across the country, from San Francisco, San Diego and San Jose, California, to Rochester, New York, and in cities in between like Ann Arbor, Michigan.

While the Maine effort didn’t succeed, it raised the profile of public power and garnered significant national press coverage of the potential benefits and many positive examples of public power.

Current public power utilities can use this increased attention to remind customers that they are served by a community-owned system and the advantages they receive as a result. Because, while IOUs will offer abstractions and what-ifs, the best defense is to continue to showcase the reality and concrete: public power is affordable, accountable, and reliable. Those benefits are why public power continues to shine in the nearly 2,000 communities they already serve.