Dive Brief:
- Voters in Maine will decide next month whether to potentially spend billions of dollars to form a non-profit, consumer-owned utility called Pine Tree Power and purchase the assets of investor-owned electric utilities Central Maine Power and Versant Power. The initiative is backed by a group called Our Power and is supported by a coalition of conservation groups.
- Coalition members include Sierra Club’s Maine chapter, Public Citizen and the Center for an Ecology-Based Economy. Most recently, Natural Resources Council of Maine has recommended voters approve Question 3 on the Nov. 7 ballot.
- Maine Affordable Energy, a political action committee backed by Central Maine Power parent company Avangrid, opposes the plan and is supporting a separate ballot initiative that would require voter approval for a community-owned utility to take on more than $1 billion in debt.
Dive Insight:
Estimates of the cost to take over Maine’s investor-owned utilities vary, but Gov. Janet Mills, D, said it could be as much as $13.5 billion and has recommended voters reject Question 3.
“That’s more than the entire biennial budget for the State of Maine,” Mills said in a September radio address. “The cost alone leaves me very concerned that we are proposing to mortgage the future of our children who are going to have to foot this bill years down the road.”
Our Power says the buyout will save Mainers $9 billion over 30 years while enabling the transition to renewable energy, but organizers did not provide estimates of a purchase price. Local reporting has pegged the value of the utilities’ assets at less than $6 billion.
The savings work out to “an average of $367 per customer per year, with savings starting in year one,” Lucy Hochschartner, deputy campaign manager and spokesperson for Our Power, said in an email.
According to the group’s website, Pine Tree Power will qualify to borrow funds at lower interest rates than investor-owned utilities, which will reduce the cost of future capital expenditures to generate the savings.
“Pine Tree Power will have plenty of access to capital,” the group said, noting that the Maine Turnpike Authority uses revenue bonds. The new consumer-owned utility “will also save us all money by not shipping profits to investors and owners out of the state and out of the country.”
Local control is a major point of Our Power’s campaign. Central Maine Power is owned by Avangrid, which is owned by Spain’s Iberdrola. Versant is owned by Canada’s ENMAX.
“The investor-owned utility system, where CMP and Versant’s sole goal is to enrich their foreign shareholders, will never serve customers,” Hochschartner said.
“Shifting governance away from multinational corporate boards toward serving the people, economy, and environment of the state of Maine would go a long way toward restoring public trust — and public trust will be vital to a successful and inclusive clean energy transition,” Natural Resources Council of Maine said Oct. 4 in the group’s endorsement of Question 3.
Does Question 3 trump Question 1?
Both Central Maine Power and Versant oppose Question 3 and are backing separate political action committees opposing a takeover of their electric grids.
CMP directed questions about its position on the proposed takeover to its PAC, Maine Affordable Energy. The utility’s parent, Avangrid, has supported the PAC with about $18 million in funding.
Maine Affordable Energy organized to get Question 1 on the ballot (the order of Maine ballot questions is determined randomly). If approved, PAC officials say it would limit Pine Tree Power’s ability to take on more than $1 billion in debt without further approval from voters.
Our Power disputes this. “Question 3 trumps Question 1,” Hochschartner said.
A provision of Question 3 reads, “debt or liability of the company is not subject to additional voter approval.”
“We organized to put Question 1 on the ballot because the proponents of the takeover were unwilling to come clean on what that cost would be,” said Maine Affordable Energy Executive Director Willy Ritch. The interest alone could run $500 million a year on a $10 billion purchase, he said.
“The proponents promise a lot. They promise lower costs, they promise more reliability. They promise more renewable energy. But there’s not a single thing in the referendum that guarantees any of those things,” Ritch said.
As for the potential for Question 3 to pass, “voters are by a fairly large margin opposed to this,” Ritch said. But he offered a major caveat: “This is an off-year election. No one’s running for president. Nobody’s running for governor in Maine. Nobody’s running for the state legislature. So I think there’s a wildcard here, who will turn out to vote.”
Some polling numbers on Question 3 were released in September by Maine Energy Progress, the PAC supported by Versant and financially backed by about $8 million from the utility’s parent.
“Across all party affiliations there is opposition, and the overall top line is that 54% of Mainers oppose the proposal,” said BJ McCollister, campaign manager for Maine Energy Progress.
McCollister noted several groups have come out in opposition to a utility takeover, including the Maine AFL-CIO and a union of electrical workers.
“This is a risky proposal that doesn’t even include an operations plan for how they’ll improve reliability, meet climate goals, or just keep the lights on,” McCollister said.
