Community Engagement

Maine lawmakers to consider forming public power authority

Maine could create a public power authority to buy the state’s two investor-owned utilities — Central Maine Power and Emera Maine — under legislation set to be introduced soon by a co-chair of the Legislature’s utility committee.

The bipartisan legislation backed by state Rep. Seth Berry, a Democrat, would create the Maine Power Delivery Authority, a consumer-owned utility that would buy CMP’s and Emera Maine’s transmission and distribution assets using revenue bonds.

Berry estimates the proposal would save ratepayers about 15 percent on their electric bills, or about $325 million annually, by replacing the roughly 12 percent earnings that is sent to the parent companies of CMP and Emera Maine with bonds costing about 3 percent.

When the Long Island Power Authority was created in 1998, electric bills were reduced by 20 percent, according to Berry.

CMP, with a $2.3 billion rate base, has about 624,400 customers who used 9.1 million megawatt-hours in 2017. Emera Maine, with about $910 million in assets, has about 158,000 customers who used 1.9 million MWh two years ago.

CMP is part of Avangrid, which is 81.5 percent owned by Iberdrola, based in Bilbao, Spain, and Emera Maine is owned by Emera, a utility company headquartered in Halifax, Nova Scotia, Canada.

“The fiduciary responsibility of CMP and Emera Maine is to their multinational investors,” Berry said at a press conference unveiling his proposed bill.

In arguing for a public power authority, Berry said the one in seven Americans served by consumer-owned utilities have rates that are about 15 percent lower than IOU rates. The reference to rate comparisons refers to residential rates.

Berry also compared the strong reliability track record of Nebraska, the only state with all public power, with Maine, which in 2017 fell on the opposite end of the reliability spectrum.

According to Energy Information Administration (EIA) data, Nebraska garnered solid reliability numbers in 2017 compared to the averages of other states (landing in the top 10 list of states) for state averages. In contrast, Maine had a bad year (landing in the bottom 10 list of states).

“Our current utilities have failed us in every respect with the clear exception of our own consumer-owned utilities,” Berry said.

Public power utilities in Maine include Kennebunk Light and Power, Madison Electric Works and Houlton Water, which provides electric, water and wastewater services, the Town of Madison, Matinicus Plantation Electric Co. and Van Buren Light & Power District

In Maine, a deregulated state, CMP and Emera Maine own only transmission and distribution assets, which are driving up electric rates, according to Berry.

In 2007, power supply accounted for most of a residential customer’s electric bill, Berry said. Since then, the generation portion of the bill has fallen, but that decline has been more than made up for by rising transmission and distribution costs, he said.

“Now is the time to control our energy destiny as transportation and heating are increasingly turning to the electricity system,” Berry said.

Berry’s legislation was endorsed by Republican state Sen. Marianne Moore.

Berry is co-chair of the Maine Legislature’s Energy, Utilities and Technology Committee. Democrats control the Legislature and Gov. Janet Mills is a Democrat.

The Maine Power Delivery Authority would be overseen by a nine-member board representing all customer classes and regions of the state, according to a summary of the legislation, which hasn’t been printed yet.

The power authority would be subject to the state’s freedom of access laws, and the public would be involved in decision-making.

If created, revenue to municipalities, such as property taxes, would be continued and current utility employees would keep their jobs, according to the summary.

 Report details municipalization benefits for Pueblo, Colo.

In other recent municipalization news, a report prepared for Pueblo, Colorado, found that electric customers in Pueblo could “conservatively” save 10 percent to 12 percent on their bills if the city forms a public power utility.

Meanwhile, the mayor of San Francisco in January asked the San Francisco Public Utilities Commission to prepare for the potential ramifications of Pacific Gas & Electric’s “current instability” as the investor-owned utility moved towards a bankruptcy filing by performing a detailed analysis that the mayor said should evaluate all options, including the possibility of “acquiring or building electrical infrastructure assets.”

The California Public Utilities Commission began a proceeding in late December that, among other things, will look into the possibility that some or all of PG&E could be reconstituted as a publicly-owned utility or utilities.

Facing billions of dollars in wildfire-related liabilities, California’s PG&E Corporation and its primary operating subsidiary, Pacific Gas and Electric Company, on Jan. 29 filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Northern District of California.