Maine residents vote on fate of two utilities

The ballot question failed to pass, with voters skeptical that a new power company governed by an elected board would be an improvement over existing for-profit utilities.

November 7, 2023 Anne Fischer

Image: Wikimedia

In yesterday’s election in Maine, voters had the opportunity to revoke the licenses of the state’s two for-profit, investor-owned utilities. The bill failed to pass, with 69.4% voting against dissolving the utilities.

If passed, the vote would have essentially ceased operations of the utilities and launch Pine Tree Power, a new non-profit utility. The two utilities in question serve just over 800,000 residents combined in a state with a population of 1.3 million.

The two utilities are Central Maine Power and Versant Power, both known for poor customer service and “the worst reliability with our electric grid,” according to Al Cleveland, campaign manager for the group in favor of Pine Tree Power.

Proponents of Pine Tree Power object to the two utilities being owned by “faraway corporations” and they accuse them of “raising rates, threatening our energy security, allowing countless outages…”

Central Maine Power Company (CMP) is the larger of the two for-profit utilities. It operates approximately 23,500 miles of distribution lines and 2,900 miles of transmission lines, serving about 646,000 customers in 346 Maine communities. The utility is owned by Avangrid, a Spanish multinational corporation that owns and operates eight electric and natural gas utilities in New York and New England. It is part of the Iberdrola Group, a Spanish company.

Versant Power was formed after the merger of Bangor Hydro Electric and Maine Public Service in 2014, then called Emera Maine. Versant is now owned by Enmax, an energy company based in Calgary, Alberta. Versant has 6,300 miles of distribution lines and 1,265 miles of transmission, and serves approximately 165,000 Maine customers.

Among the many complaints about the utilities are rate hikes and having the money go elsewhere. In July, for example, the City of Calgary, Versant’s owner, announced the city government would be getting an $82 million 2022 dividend payment from Versant. Shortly thereafter, the utility hiked distribution rates 14%, then announced another rate hike of 12.5% planned for January 2024, according to Pine Tree Power. CMP hiked distribution rates 20% in June, while also sending out disconnection notices to 10% of its customers, Pine Tree contends.

CMP was ranked last in the nation for business customer satisfaction among utilities surveyed in a 2022 J.D. Power study. Versant was not included in the study due to its small size. The study noted that some of CMP’s poor customer service issues include the most power outages of any state, the second longest period with no power, and high electric rates.

While this is the first time the question has been put to voters, it is not the first attempt to vote the utilities out. In 2021 the Maine legislature wanted to put the Pine Tree Power question to vote, but it was vetoed by Governor Mills. Instead, the organization backing Pine Tree Power launched a referendum effort and submitted enough signatures to get the question on the ballot. In anticipation, CMP’s parent company Avangrid reportedly invested $7 million to launch an opposition group called Maine Affordable Energy.

Governor Mills said she opposes Pine Tree Power due to the risks involved. She thinks it may be too costly and that there’s too much uncertainty as to what electric rates would be, and she questions the expertise of the proposed board. She also shared doubts that it will move the state forward on its progress in clean, renewable energy.

A report prepared by London Economics International for the Maine Public Utilities Commission found that the initial startup would be costly, but would eventually result in strong savings for Maine residents. The report estimated that the startup could cost ratepayers as much as $118 million in the first ten years, but then they could save as much as $236 million over a 30-year period as the new non-profit utility took advantage of tax-exempt and low-interest loands.

The bill is supported by climate activist Bill McKibben, Republican Senator Rick Bennett, Democratic Senator Bernie Sanders, along with the Sierra Club and the Natural Resources Defense Council of Maine.

This article was updated on Nov. 8 to reflect the election results.

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