Maine residents will vote Tuesday on a ballot measure that would dissolve its investor-owned utilities and replace them with a nonprofit
“I would call them and say: ‘This is not possible. Can you help me solve this?’” recalled the 64-year-old social worker, who shared copies of her bills with The Washington Post. “I felt like I was going crazy.”
So McCurley began working to drive her power company out of business, joining a burgeoning national movement of consumers frustrated with power companies they feel are unaccountable to ratepayers, and that have taken center stage in disasters such as this summer’s devastating wildfires in Maui.
The epicenter of the resistance is in Maine, where voters — who have wrangled with outages, billing mishaps and some of the highest electricity prices in the country — are joining a campaign to replace the state’s investor-owned electricity companies with a nonprofit utility. The campaign has drawn a coalition of the frustrated that cuts across ideological lines, including fed up rate payers and climate activists accusing the utilities of slow walking the transition away from fossil fuels.
A ballot measure Mainers will decide on Tuesday calls for a hostile takeover of sorts, creating a nonprofit company called Pine Tree Power that would seize control of the state’s electricity grid from Central Maine Power and Versant Power, the subsidiaries of multinational corporations that now own it. The shoestring campaign is an existential threat to the industry, moving the Maine utilities to spend more than $35 million blitzing ratepayers with ads that warn the measure threatens to create an Armageddon of massive public debt, unending legal fights, and soaring bills for customers.
“The burden of that debt would be enormous,” said Willy Ritch, executive director of Maine Affordable Energy, a political action committee funded almost entirely by Central Maine Power’s parent company, Avangrid. Central Maine Power spokesman Jonathan Breed argued the company has resolved billing and customers service problems that earned it millions of dollars in fines from the state, and that the challenging topography of Maine accounts for the high number of outages. Breed said the company could not respond to the specific complaints of McCurley and other customers interviewed by The Post for privacy reasons.
Yet all the spending on advertising disparaging the ballot measure is giving customers one more grievance with firms they say should be investing the money in bringing them better service. Pine Tree Power supporters are working with a meager $1 million budget but some high profile support, including the Sierra Club, Vermont Sen. Bernie Sanders (I) and environmentalist icon Bill McKibben.
However things play out on Election Day, the Maine campaign is a sign of what utilities nationwide increasingly face as consumer frustration boils over. The companies are under more stress than at anytime in recent memory, forced to respond to a confluence of events that demand nimble action while operating under a dated financial and regulatory model.
Extreme weather events are creating unprecedented reliability and public safety risks. The push to power cars and — in many parts of the country — all major home appliances with electricity is creating huge new demand. Spiking energy prices have sent rates in many parts of the country spiraling up.
And consolidation in the energy industry has left the impression among many ratepayers that their local utility — long considered part of the community fabric — has become overly focused on drawing profits for out of state investors.
“We are in a challenging time, and that is putting strains on the relationship between utilities and their customers not seen in decades,” said Michael Wara, an energy scholar at Stanford University.
As challenges mount, interest in taking utilities out of corporate control is growing. In California, state leaders had mulled a takeover of Pacific Gas and Electric after deadly wildfires pushed the company into bankruptcy. Hawaiian Electric, facing scrutiny of its equipment’s role after the Maui wildfires this summer, finds itself targeted by activists for dissolution.
A flash point in the debate is the way corporate utilities make their profits, collecting hefty interest payments from ratepayers on the big power grid projects the companies bankroll. Pine Tree Power proponents say a public utility can save ratepayers billions on such investments, as its goal would be financing projects as cheaply as possible rather than generating profits for out of state shareholders.
“If these utilities were run by the government, at least there would be some responsiveness,” said Gerald Singleton, a California attorney whose firm has represented 15,000 plaintiffs in wildfire lawsuits against utilities. “If you don’t like how it is being run, you can vote the people in charge out. With investor owned utilities you are just stuck.”
But putting the government in charge can bring its own set of problems.
Publicly owned utilities are “not a panacea,” said Severin Borenstein, director of the Energy Institute at the University of California at Berkeley’s Haas School of Business. “They might be better in many cases, but it is easy to oversell them with the idea that the power company will finally operate in the public interest if it is just owned by the public. People who think that have never been to the DMV or dealt with the social security office.”
Publicly owned utilities are not a new idea. They are currently operating in 2,000 communities, providing electricity to 49 million people, according to the American Public Power Association. But they are generally small outfits, serving a city or county as opposed to an entire state. An exception is Nebraska, where there have not been any investor-owned utilities since 1946.
Many public utilities are ranked higher in providing customer service and offer lower rates than comparable investor-owned utilities. But there have also been epic failures, such as in Puerto Rico, where years of mismanagement left ratepayers with an unstable grid and inflated rates before the utility went bankrupt in 2017.
The proposal in Maine would replace Central Maine Power and Versant with a nonprofit run by a board of seven elected members and six more people they select. Pine Tree Power would take control of the state’s power grid, buying out the existing utilities. It would be a messy and litigious process, and there is heated dispute over the price tag, with the exiting power companies warning ratepayers it will cost more than $13 billion but other analysts saying it would be far less.
It took the community of Sacramento more than 20 years from the time voters chose to break away from Pacific Gas and Electric until the courts finally gave the plan the green light in 1946. Kicking out a corporate utility has only become more complicated since then.
Gov. Janet Mills, a Democrat, is urging voters to reject the Maine proposal, warning that enmeshing the state in a decades-long battle over control of utility poles and transmission lines would be a costly mistake. The International Brotherhood of Electrical Workers is also working against the measure. Central Maine Power and Versant, for their part, charge the Pine Tree Power campaign is overpromising, noting the primary reason electricity prices are so high in Maine is because the cost of power generation has spiked, and the utilities have no control over that. Under Maine law, utilities are prohibited from controlling generation, which is managed through contracts negotiated by the state.
“The last thing we should be doing is trying to force an acquisition by eminent domain to buy something that, once we buy, we don’t know how to run,” said Fred Forsely, the chief executive of Shipyard Brewing Co. and a public face of the opposition campaign. The sentiment is shared by the owner of another iconic business in Portland, DiMillo’s On the Water, which for decades has served tourists lobsters in a former 206-foot-long car ferry converted to a restaurant. “I never look at government to fix something for us,” said Steven DiMillo, who manages the business.
Yet a growing number of Mainers appear to have even equally low opinion of their power companies. Among them is Brian Johnson, a retiree in Harpswell who worked as a utility industry consultant for decades.
Johnson is clear eyed about the risks of a Pine Tree Power takeover. But after 17 power outages at his home over the course of a year and explanations from Central Maine Power that he found unconvincing, Johnson began investigating how the firm is spending its profits. He decided ratepayers would be better off if the company were out of the equation.
“Senior management in many of these companies has lost touch with local communities,” Johnson said. “This has them scared, and for good reason.
Credit: Source link
