There has been an increase in the number of communities exploring the public power option, a trend that has been driven by a number of factors including reliability, the desire for renewable energy options and increased economic development, said Ursula Schryver, Vice President, Strategic Member Engagement and Education, at the American Public Power Association (APPA) during a recent hearing held by Maine state lawmakers.
Schryver, who made her comments at a May 20 hearing held by the Maine Legislature’s Energy, Utilities, and Technology Committee, also detailed the resources that APPA offers when it comes to municipalization.
The Maine committee hearing focused on a bill, LD 1708, which would create a consumer owned utility that would take over the electric service now provided by Central Maine Power and Versant Power. Central Maine Power Company and Versant Power (formerly known as Emera Maine), are majority owned by Iberdrola of Spain and Emera of Canada, respectively.
In late April, a bipartisan group of legislators in Maine announced plans to introduce the legislation. Together, the two investor-owned utilities in Maine serve 96.2 percent of the state’s residential load and have 963,187 residential customers, according to state regulators. The remaining residential load is served by public power utilities – or consumer-owned utilities, as they are known in Maine – and electric cooperatives.
“Our new bill, ‘An Act to Create the Pine Tree Power Company,’ will allow us to control our own money and our own energy destiny -- to advance fast and fairly toward our own clean energy and connectivity future,” Democratic Rep. Seth Berry, sponsor of the bill and House Chair of the Energy, Utilities and Technology Committee, said in a statement last month.
At the hearing, Schryver noted that her comments were neither for or against the legislation “primarily because APPA doesn’t weigh in on decisions made by individual communities.” APPA, she noted, serves as a resource and APPA believes that every community needs to make a decision that is right for itself.
In terms of municipalization, “we believe it’s important that communities have all the information on the benefits of public power, the process, the impacts to the community, to make an informed decision for their community or their region,” she told the state lawmakers.
“We can serve as a resource from a national perspective including municipalization trends, the process, hurdles we typically see related to municipalization efforts and obviously talk about public power and successful public power examples,” Schryver said at the hearing.
“Over the last several years we have seen an increase in the number of communities exploring the public power option,” she said, noting that interest has actually been very consistent over the past several decades. “Dozens of communities contact APPA for information on public power and on the municipalization process every year,” Schryver said.
The reasons differ, she noted. “In recent years it has really been driven by the desire for renewable energy options, more environmentally friendly options or increased economic development,” she said. Rates and reliability are often common driving factors, Schryver said. “There’s often interest after a storm when the incumbent utility responds poorly,” the APPA official said.
In terms of the number of new public power utilities that have been formed, she said that 88 have formed since 1973 and 20 new public power utilities have formed in the last 20 years, Schryver told the state lawmakers. “Several of these were greenfield developments where a new utility was created in the service territory of an investor-owned utility.”
Schryver said that while there are a lot of ongoing discussions, changes in utility ownership are rare. “Often, once these discussions begin, the incumbent utility fights the effort with expensive PR campaigns, with legal battles and often they will offer concessions to encourage the community to end the initiative, which, in some cases, may be in the best interest of the community,” she said. “Once again, that’s a local decision.”
Parties voice support for legislation
In written testimony for the hearing, Stephanie Clifford, Campaign Manager for Our Power, said that the Pine Tree Power Company “will be transformational for our state because it will put us in control of our energy future."
A consumer-owned utility “operates for the benefit of its ratepayers, that's you and me. It is run locally by Maine people, with its profits being reinvested in our communities, instead of into the pockets of foreign investors and foreign governments,” she said.
The Solar Energy Association of Maine (SEAM) also voiced support for the bill.
Steve Weems, Executive Director of SEAM, said in written testimony that establishing the Pine Tree Power Company offers a superior alternative to investor-owned utilities. This is due to the structure of this proposed statewide consumer-owned utility, he said.
“First, Pine Tree Power (PTP) would be a not-for-profit corporation, controlled by an elected board of seven elected Maine directors,” which offers a number of fundamentally important positive distinctions from the investor-owned utility model, Weems said.
Among other things, he said that PTP’s municipal not-for-profit legal structure would provide PTP “with access to tax-exempt revenue bonds. Access to tax-exempt revenue bonds would reduce PTP’s cost of capital to one-half or less than the capital used by IOUs. This is why PTP would save electric ratepayers $5-10 billion dollars over the next 30 years.”