Maine voters will decide in a referendum on November 7 whether to create a new nonprofit, the Pine Tree Power Company, that could purchase the transmission and distribution assets of one or both of the state’s two investor-owned utilities, Central Maine Power (CMP) and Versant Power. Pine Tree Power would purchase the assets only if the Maine Public Utilities Commission finds either or both utilities “unfit to serve.”
Of the eight fitness measures described in the referendum, one relates to each utility’s ability to place the state’s climate goals “ahead of the desires of shareholders to earn a profit.” Maine has a renewable portfolio standard of 80% by 2030.
The referendum calls for creating Pine Tree Power as a customer-owned nonprofit corporation, with one of its eight purposes being assisting the state in “rapidly meeting or exceeding” the state’s climate action plan goals.
The nonprofit group Our Power, formed to promote the ballot initiative, says on its website that “the key to a carbon-free economy is clean electricity” and that “a nonprofit consumer-owned utility will get us there quicker.”
Both CMP And Versant, Our Power says, “often fail to cooperate with solar energy providers seeking interconnection agreements,” while “CMP has a well-documented history of fighting renewable energy initiatives and legislation.”
In its campaign for the ballot measure, Our Power also takes issue with CMP’s and Versant’s cost of electricity, reliability, and customer service. The referendum’s first three “fitness to serve” criteria reflect those three concerns.
If the referendum passes, the Maine Public Utilities Commission would evaluate each utility’s fitness to serve, beginning in 2025. If that evaluation were conducted today, both CMP and Versant would be found unfit to serve, said Lucy Hochschartner, deputy campaign manager for Our Power’s campaign to pass the referendum.
A public utility would save Maine residents money, the campaign says, citing an analysis by economist Richard Silkman, the CEO of Competitive Energy Services. Savings would result largely because a public power company could borrow money at a lower rate than a utility’s regulated rate of return on investments, the analysis says. Silkman said the Maine Turnpike Authority and similar public authorities nationwide issue billions of dollars of revenue bonds each year at low interest rates.
Maine resident and referendum campaign leader Bill Dunn said on a campaign video that “Maine has the worst electric reliability in the whole country and the lowest customer satisfaction. We can do a lot better. Pine Tree Power can help us do that.”
Steve Weems, executive director of the Solar Energy Association of Maine, said on the video that “The main driving force” for the investor-owned utilities “is maximizing shareholder value, and under Pine Tree Power, the main focus would be on creating the best possible service for the customers, because the customers will be in charge.”
The referendum reached the November 7 ballot after campaigners for Our Power secured nearly 70,000 valid signatures in support of the measure. Our Power counts 40 organizations as part of its coalition supporting the referendum. Six Maine residents initially launched the referendum effort.
CMP’s parent corporation Avangrid and Versant’s parent corporation Enmax have funded a campaign to defeat the referendum, and have outspent referendum advocates by a ratio of 17-1, according to reporting by the Portland Press Herald.
If passed by voters, the referendum would require the Maine Public Utilities Commission (PUC), beginning January 1, 2025, to evaluate the transmission and distribution utilities CMP and Versant for their fitness to serve, and to require the sale of a utility found to be unfit within 24 months.
The fair market value of either utility’s transmission and distribution assets would either be negotiated or determined by a refereed process. Neither CMP nor Versant owns generating assets. To purchase the assets, Pine Tree Power would issue debt secured by its future revenues.
Prior to making a purchase price offer for any utility assets, the Pine Tree Power board would be required to adopt bylaws, retain expert professional staff and consultants, secure initial financing, conduct due diligence, and develop a transition plan and a business plan for the company.
Pine Tree Power would select at least one qualified nongovernmental entity to operate the utility, through a competitive solicitation. The “operations team” would be required to retain all workers of the purchased utilities.
The company and the operations team would submit to the PUC within 18 months a 5-year plan to meet initial goals relating to affordability, reliability, decarbonization and internet connectivity. Pine Tree Power would be required to include a program to make “rapid investments” in the distribution grid to upgrade reliability and improve capacity for interconnection of new renewable generation and storage.
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