In case anyone still had any questions, the summer of 2021 demonstrated that climate change is real. The forests of the West burned, the coastal cities of the South flooded and, here in Maine, we experienced record-breaking levels of heat. The experience heightened the importance of moving quickly and aggressively to address climate change by reducing carbon emissions.
David Flanagan, CEO of Central Maine Power from 1994 to 2000, during the Ice Storm of 1998. Photo courtesy of David Flanagan
Gov. Mills has set a goal of reducing carbon emissions by 80 percent in the next 30 years. The major strategy for doing this is to move cars, trucks, industrial processes away from fossil fuels and toward “beneficial” electrification; i.e., electricity powered by carbon-free energy sources.
This works only if Maine can generate more electricity from sustainable sources. In 2020 Maine was one of the top five states in the country for the production of renewable electricity – about 79 percent of Maine’s electricity is generated by renewable sources (34 percent hydro; 24 percent wind; 20 percent wood), compared to 24 percent nationwide.
But this is now. Former Maine State Planning Director Richard Silkman has estimated that Maine must increase its peak electricity production by five times by 2050 to meet climate change goals. All of this added production must come from renewable, nonpolluting sources.
Right now Central Maine Power is negotiating with hundreds of solar producers to add their power to the grid. The process is slow and painstaking – every time a project is added, the entire regional grid surrounding it must be recalculated and redesigned – but we are getting there.
There needs to be a balance of carbon-free energy sources. On a dark and snowy winter’s day, when demand for heat hits a peak, solar energy does not contribute. Nor, on a hot and still summer day, when air conditioning demand rises, does wind power help.
That is why hydropower is an important part of the mix. Water flows whether it’s summer or winter, day or night, sunny or rainy. The half-million megawatts per year reserved for Maine from the Clean Energy Corridor project (enough to heat 70,000 Maine homes at reduced rates) is a start. But much more hydropower – as well as much more solar and wind and tidal power – will be needed.
Silkman has estimated that the additional sustainable electric power needed by 2050 will require $60 billion to install. An investment on this scale will require close coordination between state government, the private sector and regulators like the Public Utilities Commission.
Maine needs to be at the top of its game to pull all of this off in a way that helps the Maine economy, and is affordable to Maine electricity payers, especially low-income families. It is often the case that subsidies for electric power and solar panels go to those who can afford a Tesla or a roof solar installation, and the net effect is that lower-income taxpayers end up subsidizing higher-income users. How to distribute costs between ratepayers and taxpayers, how to attract billions of dollars of outside investment, how to maximize economic benefits from the investments – all require careful thought and broad cooperation.
With such massive and urgent challenges ahead, this is not a time to eliminate the state’s electric companies and engage in a bold social experiment of creating a new public entity from scratch. CMP has 900 talented employees, most of whom have worked there all their lives, who know Maine and understand the grid. Of these, 600 are union members, with excellent pay, benefits and security. They would lose their jobs when an outside contractor, likely from out of state, would be hired to run the system. This would add a $13 billion purchase price burden to Maine ratepayers even before starting to invest the $60 billion required by the clean-energy future.
This does not mean that the status quo is acceptable. I have been at CMP at its low points (in the mid-1980s and in the late-2010s) and in its better years (the late 1990s and today). The organizational audit conducted of CMP for the Public Utilities Commission last summer reports that CMP is once again improving its customer service and reliability. But what happened in the last decade, when CMP’s parent company disinvested in its people and core capabilities, cannot be allowed to happen again.
There is a way to achieve fundamental reform at CMP and Versant without kicking the table over. That is to follow the precedent recently set by the PUC on consumer response services. The commission identified a minimum performance standard for CMP – every consumer call must be answered within 30 seconds – and created financial penalties for failure to meet the standard. This same approach can be used to ensure that utilities owned by out-of-state firms are penalized for failing to maintain a high level of service quality and customer responsiveness, and rewarded for doing a good job.
Require the PUC to have more aggressive monitoring of CMP and Versant, rather than embarking on a highly risky and expensive social experiment. Let’s skip spending the next 10 years fighting about how to organize a new utility organization, and instead let’s spend the time instead focusing on making the investments needed for Maine’s clean energy future. If the summer of 2021 has told us anything, it is that we have move boldly and quickly on climate change.
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