Too often, those siding with Central Maine Power against Question 3 say regulation is the answer. The problem is, we’ve tried this for 120 years. It hasn’t worked, because it’s not designed to.
Since 2006, CMP delivery rates have more than doubled from 5 cents to over 10 cents. This does not include new costs added on for solar power. And it is nearly twice the rate of inflation. Year after year, reliability is the worst in the nation. Customer satisfaction, year after year, is worst in the nation. Meanwhile, Maine nonprofit utilities deliver power at 52% lower rates, and are beloved by their communities.
Our Public Utilities Commission or PUC does play a critical role, and its staff are some of the best people I know. But a few years ago, it was a very different PUC. And with our electrical grid now so crucial and so challenged, can we really afford to keep putting all our energy eggs into this one basket?
CMP has spent tens of millions to say “yes.” And this should be no surprise. In fact, it was the investor-owned utility industry that created the modern PUC. They did it to protect monopoly profits, and to slow the spread of public power.
The genius behind this move was Samuel Insull — the same man later used as a model for the “monopoly man” in the board game Monopoly. In 1898, Insull advised his fellow tycoons in the National Electric Lighting Association (NELA) that the best path to guaranteed, monopoly profits was to create small, politically appointed regulatory bodies in each state. Gaming the system was relatively easy. With no need to compete for customers like other businesses, private utilities could boost profits through political and regulatory influence.
Too often — as in an otherwise excellent recent column by Paul Mills of Farmington — we presume that utilities dislike regulators. In fact, from the start, the utilities created regulators.
It was also a defensive move. In the late 1800s public power was on the upswing, led by reformers like mayors Tom Johnson of Cleveland and before him, Hazen Pingree — a son of Maine, Civil War veteran, businessman, mayor and governor. Pingree’s reforms in Detroit had shown that thanks to its lower cost of capital, public power delivers service less expensively.
“Municipal ownership of public utilities is simply the people reclaiming what they have given away to a favored few individuals and corporations,” said Pingree in a January 1900 address. “There is no reason why a favored few should make money out of them, at the expense of the real owners.”
Insull’s association, NELA, was alarmed. And so, as one paper in the Energy Law Journal puts it, state laws creating PUCs were written by for-profit utilities “in order to avoid public ownership (p. 50).” Within just a few years of the industry decision to form PUCs, they had succeeded in at least 30 states.
It might also surprise readers to know that Democrats like Gov. Frederick Plaisted championed PUCs, while Republicans like Gov. Percival Baxter championed public power. This tale is told in the Maine History Journal article “Conservation and Legal Politics.” In his very first year in office, Plaisted pledged that “’The State will never…erect a single power station.’” Instead, Plaisted pushed for a PUC. It was formed in 1913, and “the idea of public power was buried in the process.” (p. 157)
Today, utilities like CMP are part of massive, multinational monopolies. Maine’s current PUC is excellent — but no matter how good the regulators and their staff, their job is harder than ever. On a good day, it is a game of whack-a-mole. The utilities have more information, more money, and more expertise. Captive customers — that’s us — must pay the full cost of the expensive lawyers, accountants and expert witnesses: not only for the commission and Public Advocate, but also for the utilities.
Fortunately, we are also not choosing between the PUC and Pine Tree Power. If Question 3 is approved this Nov. 7, we will have both.
After voting “Yes” on 3, we will next elect a board to replace the board that meets today in the top floor of the Iberdrola Tower, in Spain, chosen by shareholders such as the government of Qatar and the management of Blackrock. Like any board, Pine Tree Power’s board will hire its own professional staff. But to give us additional checks and balances, the PUC will also oversee this new utility.
With both a PUC and a utility that is by us and for us, Maine people will be the winners every time. And as we stand together on the threshold of a decarbonized, fully electrified era, there is too much at stake to get it wrong.
Seth Berry served seven terms in the Maine Legislature, including three terms as House chairperson of the Joint Standing Committee on Energy, Utilities and Technology, and a term as House Majority Leader. He lives in Bowdoinham.
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