A bill that would allow Maine to replace its two investor-owned utilities with a consumer-owned nonprofit passed both houses of the state legislature this week despite the concerns of Democratic Gov. Janet Mills.
Maine’s House of Representatives passed An Act to Create Pine Tree Power Company (LD 1708) 76-64 on Tuesday, and the Senate passed it 19-16 the next day.
The legislation would initiate a process to create Pine Tree and direct it to acquire all utility facilities in the state through the right of eminent domain, effectively replacing Central Maine Power and Versant Power.
Proponents of the bill say that the foreign ownership model of CMP and Versant is not delivering reliable service, low rates or superior customer service. CMP is owned by Spain-based Iberdrola via Avangrid (NYSE: AGR), while Versant is a subsidiary of Calgary, Canada-based ENMAX.
If Gov. Janet Mills signs the bill, the proposal would go to voters in November.
Prior to the House and Senate votes, however, Mills’ office sent a memo to legislators calling on them to “conduct more research and analysis before putting a stamp of approval on this version of the proposal.”
In the memo dated June 14, Mills’ office outlined specific concerns about the proposed utility’s governance and the effect the changeover would have on Maine’s progress on climate change.
Seven of the 11 members of the Pine Tree board would be elected as representatives of groups of Maine districts, but Mills is uncomfortable with that governance structure.
“The bill contains no assurance that the seven members of the board will share the legislature’s goals on climate change, reliability and rates, nor are the members required to have any expertise in finances, energy or utilities,” the memo said.
Mills also believes that the acquisition of assets from “unwilling sellers” would delay the work of addressing climate change in the state.
But the bill does require the board to report to the legislature on specific objectives, including meeting the state’s climate change goals, according to a June 16 response to the memo by Rep. Seth Berry (D).
“No single obstacle to our effort to decarbonize over the last two years has been greater than our investor-owned utilities,” he said, adding that a consumer-owned provider is a proven model for decarbonization.
Consumer-owned utilities serve “all six of the nation’s first six communities to reach 100% clean electricity,” he said.
Mills also sees the proposal as a risk to current property tax revenues from utility ratepayers, estimated at $90 million.
“Although the bill says that the new entity will make ‘payments in lieu of taxes,’ as a tax exempt ‘body corporate and politic,’ it is doubtful that the governing entity could be required to make any such payments,” the memo said.
Barry, however, agreed that property taxes are “crucial,” and said the bill “requires that all current and future property taxes, as paid for in our rates, are continued.”
Based on the House and Senate roll calls, the bill’s supporters currently do not have the votes necessary to override a veto by Mills.