Maine To Vote On Nutty Idea: Make Electric Power Public, Affordable, Reliable. The Horror!
Not surprisingly, private utilities pouring millions into 'No' campaign.
Backers of an initiative on November’s ballot in Maine have a wild, radical question: Why should something as basic and necessary for life as electric power be a for-profit business, instead of a public good like streets and schools and emergency services?
That’s a particularly significant question considering the demonstrable failings of Maine’s two big private electric utilities, Central Maine Power (CMP) and Versant Power, which consistently come in close to dead last in customer satisfaction surveys. Mainers pay some of the highest electric rates in the country, and have had to put up with more and longer power outages than any other Americans. As for renewable energy, getting rooftop solar connected to the grid is more expensive and a bigger logistical hassle than in most states, too.
Oh yes, and in June, Maine’s Public Utilities Commission approved a rate increase for CMP — in a month when 10 percent of CMP customers received disconnect notices because they couldn’t pay their electric bills. The kilowatts are too damn high.
The private utilities are making good money — $187 million in profits last year — but those profits aren’t sloshing around Maine. Both utilities are owned by non-US corporations. Versant’s corporate ownership is in Canada, and CMP belongs to a subsidiary of a Spanish multinational.
So hey, Question 3 advocates argue, wouldn’t it be better to replace both with a public nonprofit (to be named Pine Tree Power) that would be managed by a publicly elected board? Make the utility answerable to Maine ratepayers, not to shareholders “from away,” as Mainers say.
Taking the profit motive out of providing electricity could save Maine households $367 a year, according to Maine state Sen. Nicole Grohoski in an interview with the invaluable Volts podcast. Grohoski likened a public takeover of the utilities to buying a house and paying less for your mortgage than renting and sending your money to a landlord.
As a nonprofit, Pine Tree Power would be able to “access low-cost capital through revenue bonding at 3-5 percent” (compared to the 10 to 12 percent returns private companies require) in order to make big investments in grid upgrades needed for the transition to clean power. To meet climate goals, Mainers will will need to replace their oil furnaces with heat pumps (swaps that federal funding will help with, thank you Joe Biden), and of course there’ll be all those EVs to charge.
Neither of the private utilities, by the way, owns any generating stations; rather, they own the power lines and buy electricity on the open market and deliver it to customers. The initiative would bar Pine Tree Power from owning any generation capacity, but would allow it to own battery storage to keep the grid powered. And while the initiative doesn’t mandate that the board purchase more power from renewable sources, Grohoski points out that the nonprofit model would eliminate a perverse incentive that leads private utilities to resist rooftop solar or even operating more efficiently, neither of which creates revenue in our current system:
“[Private] utilities make more money when they build transmission lines than when they upgrade the distribution system. They get a higher rate of return, right? So it is in their best interest to continue with the model of large far-off generation facilities compared to local rooftop solar type solutions or microgrids or battery storage.”
That’s led to some particular absurdities in Maine, particularly with Versant, which operates in the eastern and northern parts of the state. Grohoski says a study commissioned by the Public Utility Commission at lawmakers’ request revealed that when it comes to getting rooftop solar connected to the grid,
“These guys are some of the worst actors we've ever seen in the United States. They are requiring things that they can't justify why they're requiring them, and we can find no reason from an engineering perspective to require them. […] For Versant customers, the average cost of interconnecting your rooftop solar to the grid is $10,000.”
She added that she had heard from constituents that Versant not only demanded pricey transformer upgrades — which certainly can be necessary — but that the customers were advised that the equipment wouldn’t be available for as long as two years. Solar installers working with CMP customers, however, advised her that CMP could get the same equipment in two months.
“So then I asked my constituents, ‘Can you file a formal complaint at the PUC using this process we had to create because this is such a rampant issue?’ And when they do that and go through the whole process, then that transformer has arrived and been installed within two to three months time. So I don't know what to say about it.”
Oh, but that’s because you’re a public official being interviewed on a podcast. We can think of all kinds of things to say!
Not surprisingly, the utilities are going all out to spread as much fear and uncertainty as they can about the initiative, spending upwards of $27 million to defeat Question 3, complete with funding an astroturf group called “Maine Affordable Energy” to explain why local control would be a bad thing. As Bill McKibben notes in The Nation, that’s led to some fun absurdities like the executive director of Maine Affordable Energy, Willy Rich, saying that
he didn’t think Mainers wanted “out-of-state politicians” telling them what to do; reporters pointed out that his group had taken $18 million in out-of-state money to oppose the referendum.
Plus there’s that thing where the two utilities are already owned by out-of-state US branches of foreign countries, as if irony were still a thing.
Grohoski thinks that even though the pro-Question 3 side is being vastly outspent — they’ve raised around a million bucks — Mainers are very attuned to energy issues, and that thanks to the utilities’ crappy service, voters have zero trust in anything the utility companies have to say.
McKibben adds that “the tide may have begun to turn decisively on climate issues in Maine,” as indicated by the June passage of a law that will make it much easier for offshore wind projects that could supply not only most of the power Maine needs, but could also sell power to other Northeast states. If offshore wind is developed on that scale,
“the workers who are constructing these could be building a turbine or two every month for the next 30, 40, 50 years,” said Jack Shapiro, the climate and clean energy director of the Natural Resources Council of Maine.
In the past, opposition from the fishing industry has killed offshore wind proposals in Maine, in part because the Maine Lobstering Union is affiliated with the AFL-CIO. But an agreement to move locate wind turbines farther offshore and to limit the number of power cables on the ocean floor brought the fisheries interests on board with the construction workers and electricians who stand to gain lots of jobs, so the bill passed with enthusiastic labor support.
Unfortunately, that support hasn’t quite extended to Question 3, McKibben says:
The International Brotherhood of Electrical Workers—and hence the Maine AFL—is siding with the bosses in opposing Pine Tree Power on the grounds that if workers were classed as public employees, they might lose the right to strike. Advocates for the public utility insist they’ve included language in the proposal that requires the elected board to contract out to a private operator, allowing the union to maintain that right.
The only polling on Question 3 so far was a September poll from Maine Energy Progress, a PAC supported by Versant, so there’s plenty of reason to doubt its finding that 54 percent of Mainers supposedly are against the referendum. On top of that, it’s an off-year election, and if enough Mainers are pissed off at the private utilities, that may drive them to the polls far more effectively than the negative advertising meant to scare voters into keeping the devils they know — and to whom they pay absurdly high monthly bills.
[Volts / Maine Beacon / Nation / Pine Tree Power / Maine Public / Utility Dive]
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Good. Now do broadband internet access.
Privatization didn't introduce the "competition", "lower cost", and "improved quality" that was promised on any service governments used to provide.