Governor Mills is preparing a utility liability bill, with the threat of a consumer-owned option


Governor Janet Mills is preparing a bill to crack down on electric utility performance problems, under threat of severe financial penalties or even a forced sale of assets to another company or owned entity. to consumers.

His administration declined to discuss it on Tuesday, but the proposal could have the effect of blunting interest in an ongoing campaign to replace Maine’s two investor-owned utilities with a state-owned electric authority. consumers.

The bill was not filed, but the Portland Press Herald obtained a draft copy on Tuesday.

Although not mentioned by name, the proposed law targets Maine’s large transmission and distribution utilities, Central Maine Power and Versant Power. This would require the Public Utilities Commission to establish a quarterly report card with minimum standards. This would create a score to measure reliable service and other metrics including customer complaints, billing, storm restoration, and interconnecting new power generators such as solar farms.

A utility that fails to meet a standard for two consecutive quarters could be fined up to $1 million or 10% of annual revenue, with the money earmarked to reduce energy costs for low-income customers.

A utility would also be required to submit a report to the PUC that compares actual costs to cost estimates used to set rates. If the PUC finds a difference of more than 10% between actual costs and estimates, the agency may require verification or prohibit cost recovery in future tariff cases.

POSSIBLE FORCED SALE

The bill would also set up a formal process at the PUC around the possibility of forcing a utility to sell all of its Maine assets. The agency would determine whether an asset sale is warranted for a company that “still fails to meet requirements” or “is unable to meet its legal obligations as a public service because it is financially deficient”.

If that decision were made, the PUC would consider proposals from qualified purchasers or proposals to create a “consumer-owned quasi-municipal corporation to acquire the utility or its assets”.

A five-member committee, appointed by the governor and the state’s public attorney, would be set up to develop a proposal on behalf of a potential consumer-owned entity. In this way, the PUC could weigh the merits of an investor-owned utility versus a consumer-owned utility.

The bill also requires utilities to prepare an early plan with the PUC to deal with expected climate change impacts, such as more severe storms and flooding. It would also strengthen whistleblower provisions, such as protecting public service employees from retaliation if they provide information to the PUC or the legislature.

The bill is being drafted because Mills is concerned that Maine doesn’t have the right tools to hold utilities accountable and ensure ratepayers have safe and reliable service, according to Dan Burgess, who heads the office of energy at the governor.

“That’s why she’s preparing to introduce bipartisan legislation to set standards for improving public services and impose tougher penalties for failing to meet those standards,” Burgess said, “all with the aim of ‘improve Maine’s ability to hold our public services accountable’.

The CMP was briefed on the details of the bill. In a statement Tuesday, the company said the PUC already has the authority to protect customer interests.

“CMP is committed to its customers by investing in our system to improve reliability, responding quickly and safely to storms, and continuing to provide the highest level of customer service,” the company said. “We hold ourselves accountable and measure our performance in these areas daily.”

POWER CONSUMPTION ALTERNATIVE?

News of the governor’s proposal comes two weeks after the campaign to promote a consumer-owned electric utility in Maine admitted it was unable to garner enough signatures for an initiative. voting in 2022 and will continue to collect names for an attempt in 2023.

Our Power, the group promoting the campaign, blamed the impact of the pandemic, winter weather and millions of dollars in opposition spending by parent company CMP for failing last year.

Our Power said it collected almost three quarters of the approximately 63,000 signatures required in three months.

Critics have been working since 2019 on efforts to replace Maine’s two investor-owned utilities with a consumer-owned nonprofit. They promoted Pine Tree Power, a proposed utility that would be run by a board elected by the Mainers and operated by a private sector operator. It would issue debt against future earnings to buy the assets of CMP and Versant. The impact of this debt on rates and for how long is up for debate.

Pine Tree Power is being touted as an antidote to the high costs and reliability issues plaguing CMP and Versant, supporters say. They began collecting signatures last summer after Governor Janet Mills vetoed a bill that would have asked a similar referendum question. It was the second time such a bill had failed to make it out of the Legislative Assembly.

Now, the proposal prepared by Mills may present a competing alternative for lawmakers.

A co-chair of the energy issues committee said on Tuesday he had been approached to co-sponsor the measure and that attempts were underway to win broad support from Democratic and Republican leaders.

“I think this is a very serious effort by the governor’s office to address the issues we’ve seen with electric utilities in Maine,” said Sen. Mark Lawrence, D-York. “It’s an attempt to get a global solution, a bipartisan solution, to the problems.”

Asked if the bill could blunt the consumer-owned power campaign by presenting a less divisive alternative, Lawrence said he didn’t think it was intended that way. But it could solve many of the issues raised by critics, he added.

“Now is the time to take some serious action in terms of public service accountability,” Lawrence said.

The PUC is charged with regulating utilities, but many of its bylaws are outdated, according to Tony Buxton, an attorney who represents industrial energy consumers. The agency has never organized a process to consider revoking an electric utility’s franchise, he said. Perhaps the harshest action came two years ago when the agency fined CMP a record $10 million for its mishandling of billing issues.

To electrify Maine’s economy and phase out fossil fuels, Buxton said, Maine will need a strong and capable utility.

“We can’t solve climate problems unless we have strong utility,” he said. “I don’t know if the steps (in the bill) will be enough.”


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