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Power Grab – Mainers Want to Own the Grid

by | May 1, 2021 | Environment, News

The grid: that ugly-yet-invisible network of poles, lines, and fenced yards full of hulking, buzzing machines that we all count on to keep the lights bright, the cheese cold, and the phone charged.

Most of Maine’s grid is owned and run by two for-profit utilities, Central Maine Power (CMP) and Versant. Since power distribution is a monopoly—there’s no physical room for multiple, competing grids—the state regulates them, allowing them to turn a tidy profit as long as they serve the public good. Investors and customers both prosper.  Everybody wins. In theory.

In reality, Maine is one of the worst four or five states for both number of outages per customer per year and average outage duration.* There have been maddening billing snafus and other scandals and crises. State regulators have scolded, levied fines, and demanded reforms, but to no avail. Maine remains one of the most erratically powered states in the Union and CMP is perhaps America’s most-hated utility:

  • “CMP dead last in U.S. in survey of business customers’ satisfaction”—Portland Press Herald, 11/14/2019)
  • “Lawmakers question if CMP is fit to run a utility company” (Bangor Daily News, 02/13/2020)

Nor is Versant far behind: in the 2020 J. D. Power & Associates national survey of electric utility residential customer satisfaction, Versant scored worst among midsize Eastern utilities and third-worst nationally.

A coalition of Maine groups, Our Power (ourpowermaine.org), including Maine DSA, is proposing a startling but field-tested solution: replace CMP and Versant with a consumer-owned utility (COU), a nonprofit corporation owned by Maine’s electricity users. Forty-nine million people, including all of Nebraska, are already served by COUs, which on average deliver more reliablecheaper power and earn higher customer satisfaction than do investor-owned utilities, both nationwide and in scores of Maine towns.

This is how it would happen. Legislation would force CMP and Versant to sell the grid to a new, statewide COU for a fair market price, this purchase to be funded by low-interest bonds (no taxes). The COU, provisionally named Pine Tree Power, would be a regulated nonprofit, not a branch of state government. Maine power users would be both its customers and the owners: in essence, you would pay your monthly power bill to yourself. Its board of directors would be directly elected by Maine voters and board meetings would be open to the public. Maine’s small existing COUs could choose to join Pine Tree Power or not. And instead of shipping profits to far-away owners (CMP is owned by a Spanish holding company, Versant by the city of Calgary, Canada), Pine Tree Power would plow all its income back into servicing and upgrading Maine’s grid.

The idea first took specific form in legislation proposed by Maine Rep. Seth Berry (D: 55th District) in early 2019. Berry and his team have since written an improved version of the bill that should come before the Legislature in 2021 or could be decided as a referendum in 2022.

What about jobs? Pine Tree Power would retain an “operations team”—in practice, CMP and Versant minus their top executives—to operate the grid. CMP and Versant workers would keep their jobs as employees of the operations team and receive retention bonuses (6% first year, 4% second). Existing union contracts would carry over, and on their conclusion Pine Tree Power would, according to the proposed COU legislation, preferentially solicit operator proposals that “maintain or improve the terms of the collective bargaining agreement in existence on the conclusion of the prior contract.” A COU would be worker-friendly by design.

Finally, a COU’s statutory missions would include high reliability, meeting or exceeding state-defined climate goals, and promoting universal access to high-speed Internet. The core mission of today’s utilities is to extract as much money as possible from Maine, not to captain green-energy growth or meet state climate goals; the result is heel-dragging or even obstruction (on April 7, Maine’s Public Utilities Commission began investigating CMP for allegedly hindering deployment of solar power).

Then there is the money question.  Electrification—switching from gasoline cars and heating fuels to electric vehicles and heat pumps—is going to push more power through the grid. Renewables dominance is also coming, given that wind and solar power, in addition to being low-carbon, now cost less than gas, coal, oil, or nuclear and continue to get even cheaper. Although utilities in Maine are not in direct charge of these transitions, since ownership of generation and distribution were separated by Maine law in 2000, it’s up to them to make the grid “smart”—adaptive and storage-buffered—to open the way for them. These upgrades may cost up to $15 billion between now and 2050.**

Utilities borrow to pay for such big infrastructure projects, paying off these loans with income from power sales. And here’s where a nonprofit COU really shines: it can borrow at about half the interest rate of a for-profit utility. Advocates compare switching to a COU to refinancing your mortgage at lower interest.  Over several decades, savings to Maine ratepayers would amount to billions.

Maine Public Power (MPP), Maine DSA’s dog in the fight for a COU, acknowledges that it’s a heavy lift. CMP and Versant will spend millions on attack ads—millions that COU advocates can’t match. In this David-vs.-Goliath setting, MPP borrows its core tool from successful labor organizing and rights movements: talk to people. Studies show that one-on-one conversations are more effective than ads or social-media messages in actually shifting views. MPP is therefore relying on one-on-one conversations as its main tool both for bringing people into the pro-COU effort and, in coming months, for reaching out to voters. In doing so, co-chair Priscilla Gilman says, MPP “will build the organizing strength of MDSA across the state, strength we can turn to the next campaign and the next and the next. Because, as great as a consumer-owned utility would be, we need so much more.”

In May, MPP and other coalition members will testify to legislators on behalf of the COU bill. If that passes into law by the standard legislative path, well and good; if not, MPP and other Our Power coalition members intend to gather signatures to bring the measure to voters as a referendum in November, 2022, following the approach that in recent years established ranked-choice voting and marijuana legalization in Maine.

For more information on MPP’s efforts see https://www.smdsa.org/maine-public-power/. To join those efforts, write info@mainepublicpower.org.

 

*This according to the Energy Information Administration’s Annual Electric Power Industry Report, Form EIA-861 detailed data files.  See also EIA report “U.S. customers experienced an average of nearly six hours of power interruptions in 2018,” June 1, 2020, at https://www.eia.gov/todayinenergy/detail.php?id=43915.

**A New Energy Policy Direction for Maine: A Pathway to a Zero-Carbon Economy by 2050, Dr. Richard Silkman, November 2019, p. 20.

Larry Gilman, raised in New Jersey but successfully transplanted to Southwest Harbor, Maine, has a PhD in engineering sciences and works as a freelance technical writer.  He loves walking, old books, imperial stouts, and Lou Reed, among other things.

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