AUGUSTA, Maine — With Election Day less than three weeks away, the two sides facing off on the November referendum to replace Maine’s two largest utilities with a new public utility used a Wednesday debate to hammer home their arguments.
The Bangor Daily News and CBS News 13 hosted the first widely televised debate Wednesday night on Question 3, which asks voters to buy out Central Maine Power Co. and Versant Power’s infrastructure and create a new public utility, Pine Tree Power, that would be overseen by an elected board.
Lucy Hochschartner, deputy campaign manager for Our Power, the group behind the referendum drive, represented the yes side, and former Maine Public Utilities Commission official Barbara Alexander represented the political groups for CMP and Versant that are urging voters to defeat the ballot measure.
During the 30-minute debate, the two representatives reiterated arguments each side has already made repeatedly throughout the campaign. But here is what we learned as they navigated the sticking points on Wednesday. Watch the debate here.
It’s all about cost.
The Maine Affordable Energy Coalition and Maine Energy Progress, which are the political groups funded by the foreign-owned parents of CMP and Versant, respectively, have used millions of dollars in ads to argue the takeover will cost roughly $13.5 billion.
That’s the figure a CMP consultant also cited to oppose a similar 2021 bill that sought to let voters decide on a new public utility, with the estimate assuming a net book value of $6.75 billion and doubling it based on similar multipliers for smaller takeovers in other states.
Pine Tree Power supporters have argued the takeover will cost closer to the two utilities’ current business value of roughly $5.5 billion while pointing to an economist’s study that found $9 billion in savings over 30 years. They’ve also cited a past PUC study finding high initial acquisition costs would turn into long-term savings and argued a new utility could borrow money at lower rates than what CMP and Versant pay to also compensate shareholders.
Alexander said “all signs” point to billions in costs and higher rates, focusing mostly on the short term. Hochschartner argued the new utility will benefit Mainers rather than investors in other countries.
“We’re paying a very high rent for the grid,” Hochschartner said. “Instead, we could be paying a low-cost mortgage.”
The opposition representative distances herself from utilities.
On the same topic of cost, perhaps the most pointed comments of the night came from Alexander after the moderators — WGME anchor Gregg Lagerquist and BDN politics editor Michael Shepherd — asked her to respond to Hochschartner’s criticism that the $13.5 billion figure was made up.
After saying “it’s not my number” and “I didn’t calculate that number,” Alexander doubled down after Shepherd noted she was picked by the utilities’ political groups to debate.
“I don’t feel that it’s appropriate to defend a number that is an estimate by people who are running the business and who have calculated that number in good faith,” she said.
What is important, she said, is that a takeover will likely cost between $9 billion to $13 billion but that the final answer will not come until after five to 10 years, which is how long Public Advocate Bill Harwood has said it will likely take to complete the buyout and resolve expected litigation over the fair market value of the utilities’ assets.
A separate ballot measure, Question 1, would require voters to approve a new utility borrowing more than $1 billion, which means a legal showdown is likely if both questions win approval.
Hochschartner repeated throughout the debate that she was disappointed that CMP and Versant “aren’t here themselves to really stand up for themselves,” alluding to low customer satisfaction and reliability ratings for CMP and Versant in recent years.
The representatives dug in on rates.
Our Power has bashed CMP and Versant for “constant rate hikes.” A new round of increases took effect this year and continue in phases.
But the biggest hikes have come on the supply side as Maine is mostly connected to the New England power grid for generation. Overall, prices are shaped by broader market forces influencing the supply cost. A new Pine Tree Power utility would continue to only handle power distribution and transmission while not generating power.
Alexander pointed out CMP’s residential electric rate has been 28 cents per kilowatt hour but that a takeover would affect the distribution portion of 6.6 cents per kilowatt hour as of July 1, arguing that nothing in the referendum guarantees rate reductions.
Hochschartner said even if the savings are only on the delivery side, that is “relief that Mainers need now.” She also noted CMP and Versant spent $35 million through September to oppose the referendum. Our Power spent around $1 million to support it.
“Unfortunately, the only plan I’ve seen is that they’ve been dumping $35 million into this election and spending on politics, rather than spending on improving our service,” Hochschartner said.