Gov. Mills made the right decision last summer to veto L.D. 1708, a bill that would have triggered a risky, multi-year process to take over Maine’s electric companies and create a government-controlled power authority. As the state continues to recover from the COVID-19 pandemic, Gov. Mills rightly recognized that it is not the time to wager a multibillion-dollar bet on Maine’s energy future. Nevertheless, supporters of this risky measure said Wednesday they will continue working to place a similar proposal on the ballot in 2023, even though they acknowledged they weren’t able to get enough signatures for a ballot initiative this year. Their proposal would require the government-controlled authority to borrow $13.5 billion – a debt that Mainers would have to pay back over decades through higher electric bills.
Make no mistake about it – this is a plan for a government-controlled power company. The referendum proposal calls for a company run by an elected board of politicians. The supreme courts of Maine and the United States have both ruled that if an entity is run by elected officials, it is by definition a government entity.
A government takeover of an incumbent electric company is a long, slow, risky and complex proposition that would leave Mainers in limbo about the true cost and time commitment needed to complete the process. These kinds of takeovers – on a much smaller scale – have led to delays that have stretched out for years. And no state has ever sought to take over its predominant electric company, let alone two of them at the same time. Moving forward with a takeover would cost customers tens of millions of dollars and could take a decade or more. Nationally, of the 60 communities that have tried to take over their electric companies since 2000, only nine completed the entire process. Two of the nine later returned the assets to the investor-owned electric company.
A report commissioned by the Maine Public Utilities Commission and released in 2020 found that a government takeover of Central Maine Power and Versant Power would result in higher costs for customers with no assurance of better service. A takeover also could put at risk millions of dollars in local property tax revenues from the companies, who are by far the largest property taxpayers in the state. Additionally, this takeover could put the retirement benefits of many employees represented by the International Brotherhood of Electrical Workers at risk, threaten their collective bargaining position by potentially making them state employees and likely lead to less investment in the grid.
The fact is, a government-owned utility controlled mostly by elected politicians and operated by a for-profit contractor would provide few, if any, benefits to Mainers and, using realistic projections, could cost Mainers more than $4.7 billion in additional costs during the first 30 years of operation.
In 2020, the Maine State Chamber of Commerce surveyed registered voters and found that fewer than 20 percent of respondents thought it was a good idea for the state to borrow over $13 billion to take over both companies.
CMP and Versant Power employ hundreds of longtime employees who live in the communities they serve. They are friends and neighbors, and they are dedicated to being there every step of the way for their customers.
Advancing Maine’s clean-energy goals is best achieved through positive dialogue among stakeholders, not through a radical takeover effort. This would lead to better outcomes much faster than any change in ownership structure could ever hope to accomplish. Now is not the time to roll the dice on Maine’s energy future.
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