AUGUSTA, Maine — It remains unclear whether the proposed takeover of Central Maine Power and Versant’s infrastructure will improve customer service, reliability and the state’s progress towards its climate goals, Public Advocate William Harwood said Tuesday.
Harwood’s office released an overview Tuesday of “some of the more significant issues and questions” facing Question 3 on the November ballot, which would place the infrastructure of Maine’s two largest electric utilities under the control of an elected board.
Those in favor of creating a new Pine Tree Power Company have argued a consumer-owned utility would give Mainers more control over what is now an investor-owned system featuring Versant and CMP, both of which have foreign-owned parent companies, saying the new model would provide billions in savings and help the state reach emissions goals.
Opponents of Pine Tree Power, backed by millions of dollars spending from the parents of the utility companies, have said the buyout would cost about $13 billion, feature a politicized oversight board and not automatically lead to a greener, more efficient grid.
While Harwood’s office noted some potentially positive and negative effects of the proposed transitions, Tuesday’s fact sheet was most notable for leaving many key questions unanswered. They will likely remain that way until voters make the final decision on Nov. 7. The ratepayer advocate’s office has not taken a position on the referendum.
It noted if the referendum passes and takes effect in 2025, the takeover process could take five to 10 years to allow for selecting the board and six appointed experts, acquiring the CMP and Versant infrastructure and resolving expected litigation between Pine Tree Power and the two utilities over the “fair market value” of their assets.
Regarding customer service, reliability and climate goals, Harwood’s office said it is “not possible to predict with certainty” whether each factor would improve under Pine Tree Power.
“The priorities of low-cost and reliability are often in tension,” the office said, adding the new utility could “feel political pressure to keep rates as low as possible, which may negatively impact the reliability of its operations.”
Touching on some of the points a few environmental groups made in deciding to stay neutral or take no position on the referendum, Harwood’s office said it is unclear whether the consumer-owned structure would be “more or less responsive” than investor-owned utilities to meeting Maine’s statutory goals of reducing greenhouse gas emissions 80 percent by 2050.
Like CMP and Versant, the new utility could not generate electricity and would stay connected to the regional New England grid. Harwood’s office said this would mean the new utility would instead be measured on climate goals by its ability to help with the transition to electric vehicles or integrating renewable energy into the grid.
Costs and potential savings remain unknown, the public advocate’s office said, but it also added the takeover could create “new efficiencies and economies of scale” by uniting two utilities.
Pine Tree Power, if approved, will select a private third party to handle operations, maintenance, customer service, regulatory affairs and other administrative tasks, with the Maine Public Utilities Commission and federal regulators also retaining the ability to step in.
Harwood’s office noted the “prudence doctrine” that has shareholders absorb the costs of utility “imprudence” would likely not apply to Pine Tree Power, leaving ratepayers to take on costs. But one option could be to charge the third-party operator of any new utility, instead of ratepayers, for any of the “imprudently incurred costs,” the office added.
Pine Tree Power supporters have pointed to a provision in the initiative that requires the new utility to submit to the PUC a 5-year plan “to meet initial affordability, reliability, decarbonization and connectivity goals.”