Lawmakers Hear From Public On Proposal To Buy Maine’s Private Electric Companies

May 15, 2019

An ambitious proposal to convert Maine’s private electric utilities into a consumer-owned entity got its first public hearing in Augusta on Tuesday.

Rep. Seth Berry, a Bowdoinham Democrat who co-chairs the Legislature’s utility committee, says the state should create a new, public grid authority, along the lines of others in Maine and the nation. It would be called Maine Power.

“We need to build our future energy economy that is strong and trustworthy and affordable. Not a foundation that is cracked and crumbling,” he says.

Berry says that unlike Central Maine Power and Emera Maine, there would be no shareholders seeking to profit from the service, so any excess revenues Maine Power earned could be used to improve reliability or lower bills. And the company could borrow capital to purchase those two utilities for less than what they pay now on their assets, he argues, saving more money.

“Think of refinancing your home. You pay a mortgage, if you can reduce your interest rates and keep the terms over the same years … that’s a good thing. That’s what we’re proposing to do here. There are no tax dollars deployed, not a penny. Hundreds of millions of dollars per year would stay in Maine rather than going overseas,” he says.

But critics warned that the buyout’s price tag could hobble the plan right from the start. Emera and CMP in 2017 pegged their combined book value at more than $4 billion, which observers believe is far lower than what they might ultimately have to be paid in a state-mandated sale.

“The enormous cost of buying out or seizing by eminent domain billions of dollars of assets … will devour the borrowing capacity of the state,” says David Flanagan, a former CMP CEO who steered the response to the 1998 ice storm. “I think this legislation is a very risky, brutally expensive and unnecessary approach to addressing these problems.”

Interest in the proposal from both sides is high — an overflow crowd waited to testify. The bill is expected to receive further action later this month.

Originally published May 14, 2019 at 5:29 a.m. ET.