By Tux Turkel , Portland Press Herald
A bill that would replace Maine’s dominant investor-owned electric utilities with a consumer-owned authority for power distribution faces a key action Friday, when the Legislature’s Energy, Utilities and Technology Committee is set to vote on whether to send the measure to the full Legislature.
The Maine Power Delivery Authority would replace Central Maine Power Co. and Versant Power, formerly Emera Maine, with an entity that would operate much like Maine’s smaller, consumer-owned utilities such as Kennebunk Light and Power and Madison Electric Works.
A private contractor would be hired to manage the system, which would be overseen by a board of directors appointed by the governor, or perhaps a board elected by customers.
Backers of the bill say it would bring $9 billion in benefits to Maine consumers and the state’s economy in the first 30 years, largely by stabilizing electricity rates.
Supporters received a boost in May when one of Maine’s top energy experts, Richard Silkman, chief executive of Competitive Energy Services in Portland, produced research showing that a consultant hired by the Maine Public Utilities Commission to evaluate the pros and cons of the authority had failed to highlight $5 billion in financial benefits to consumers. That research was highlighted Tuesday in a news release from the bill’s backers.
But after reading the release, CMP Executive Chairman David Flanagan called the analysis “seriously flawed and unrealistic in its estimate of savings attainable from a government takeover of Maine utilities.”
In a statement, Flanagan added: “One study by one person hardly makes the case that Maine people should be forced to take on billions of dollars of risk with no clear path to savings or improved utility performance, particularly when there are so many unknowns and potential pitfalls, and as many Mainers face an uncertain economic future.”
In an interview Tuesday, Silkman said that while he stood by his analysis, it wasn’t meant to be the last word on a complicated topic. The PUC’s consultant, London Economics International, or LEI, presented its findings to the legislative committee in late February.
At the time, LEI also noted that its analysis wasn’t intended to be complete and exhaustive, and suggested additional studies and further inquiries. But the coronavirus pandemic forced the Legislature to abruptly adjourn a few weeks later, leaving many questions unanswered and open for debate.
Among them are a host of financial complexities such as calculating the value of each company’s transmission and distribution assets, future borrowing costs and the degree to which Maine shifts its heating and transportation sectors from petroleum to electricity in the years ahead. Also to be determined are constitutional questions of eminent domain, compensation and court appeals that are expected to come from CMP and Versant if the bill passes in the Legislature.
The PUC said on Tuesday that it has no plans to conduct an independent analysis of Silkman’s work, or a response to it that LEI sent to the energy committee’s co-chair this month. That response took issue with four highly technical financial adjustments suggested by Silkman, illustrating the complexity of agreeing on how to calculate the value of the measure over 30 years.
The bill, L.D. 1646, was sponsored last year by Rep. Seth Berry, D-Bowdoinham. Berry co-chairs the energy committee and is a vocal critic of CMP and how it has conducted business over the past few years, including its botched rollout of a billing and metering system.
In an interview Tuesday, Berry said he expects the committee to recommend the bill to the full Legislature.
But it remains unclear whether lawmakers will return to Augusta this year, as Democrats and Republicans squabble over the terms of a special session. Berry is he hopeful that it can happen, and that the elevated prospect of near-term benefits for electric customers makes consideration of his bill more urgent than before.
“This is a game-changer,” Berry said in a statement. “Now that we know LEI’s own report omitted $5 billion in value and that millions per year can be saved from year one, Maine’s policymakers clearly must act.”