The House chairman of the Legislature’s Energy Committee put a bold proposal on the table on Monday: create a new authority to buy out electricity system poles and wires owned by Central Maine Power and Emera Maine.
Democratic state Rep. Seth Berry of Bowdoinham has clashed repeatedly with the utilities in recent years, over rates, bills and renewable energy. Now he is radically upping the ante and proposing the state create a nonprofit, consumer-owned transmission and distribution utility, and have it take over CMP and Emera’s assets and operations.
“A Maine power delivery utility that purchases at a fair price the assets of CMP and Emera Maine, and shakes their hands and says, respectfully, ‘goodbye,’” he says.
That could cost at least $4 billion, the value of the combined CMP and Emera assets according to 2017 filings with state regulators. Berry says it would be affordable though, because the state would float revenue bonds to finance the purchases — bonds that are not taxed by the federal government.
“This is not magic, it’s not sleight of hand. We are refinancing at different interest rates. That’s all it is, and that’s how we would reduce rates,” he says.
And Berry says that in addition to the debt-cost savings, ratepayers in the newly created Maine Power Delivery Authority would also benefit because their rates would no longer have to return profits to private investors — returns that routinely rise over 10 percent in Maine. That tax savings and the lack of a the need to generate profits for shareholders, he estimates, would cut electricity delivery rates by 15 percent while improving service reliability.
That’s appealing to Rick Savage, a business owner and Republican who appeared at the press conference along with electrical workers and others supportive of the plan. Savage co-owns multiple businesses in the Bethel area — and he’s chafed under CMP’s monopoly there.
“In my work as a developer I deal with Central Maine Power on a daily basis. To be honest it’s like dealing with the mafia. We are sending hundreds of millions of dollars a year overseas for no reason,” he says, referring to CMP’s parent company in Spain. Emera’s parent company is located in Nova Scotia.
“You know, the Maine Legislature has considered similar bills in the past,” says Catharine Hartnett, a spokeswoman for CMP. She says Berry’s plan would amount to a “taking” of private property — a taking that could violate the state and federal constitutions.
She says previous, similar efforts have failed.
“Because of questionable benefits and legal and constitutional challenges, and I would think the same questions would come up with regards to this bill to seize assets,” Hartnett says.
In 1973, Maine voters rejected a statewide ballot initiative that would have created a public power authority. Dick Davies, a former state public advocate who was involved in that campaign, says that this year there may be more of an appetite for such a move. He points to the recent controversies around CMP’s billing practices, its rates, reliability, worker layoffs and its plan to build a new transmission line through Maine’s western woods. And Emera’s rates and service quality are problems too, he says.
“These are all problems that can be addressed with a new entity that has as its sole interest, the interests of the ratepayers,” Davies says.
“In theory it’s a great idea. In practice, it’s going to take some work,” says Todd Shea, general manager of Kennebunk Light and Power, the state’s largest nonprofit, consumer-owned electricity distribution utility, which manages to deliver electricity at a lower price and more reliably than the big investor-owned utilities in Maine.
Shea says that record is possible partly because, with only 25 square miles to cover, Kennebunk Light and Power can keep close watch on its infrastructure with relatively few field workers.
“The density of linemen is really the big, big issue here,” he says. “To have the service that we provide you need a lot more linemen, you need a lot more coverage. And how the authority would do that will be interesting to see.”
In a statement, Emera Maine spokeswoman Judy Long declined direct comment on Berry’s proposal, saying only that the company is proud of its workers and focused on improving service. Emera’s parent company is pursuing the sale of some assets, but she says the company will provide details “when the time is right.”