Maine Gov. Janet Mills has vetoed a bill that aims to replace the state’s investor-owned utilities with a consumer-owned nonprofit, saying in a message Tuesday that the bill is “arguably one of the most consequential ever to be considered by the Legislature.”

The bill, an Act to Create the Pine Tree Power Authority (LD 1708), would create a consumer-owned utility and authorize it to acquire the assets of Central Maine Power (CMP) and Versant Power via eminent domain.

Mills called the performance of the utilities “abysmal” and agreed that “it may well be that the time has come for the people of the state of Maine to retake control … of our electric transmission and distribution services.”

But she said the bill was “hastily” drafted and did not have “robust public participation.”

Mills’ signature on the bill would have triggered a public vote on the plan in November, but she said she wants the Legislature to give the plan a “full airing.”

She also said she is open to alternative proposals and options for strengthening the Public Utilities Commission’s authority and its ability to assess penalties on the utilities. Regulators, she noted, already have the authority to hold a hearing to determine whether a public utility is unfit to provide reliable and affordable service in the state.

“An evidence-based proceeding such as this might be more appropriate for such a profoundly important change, particularly as compared to the rushed political process that characterized the enactment of” the bill, she said.

Rep. Seth Berry (D), who sponsored the bill, expressed disappointment in the veto.

“After winning bipartisan majority support in the committee, House and Senate, we had hoped the governor too would trust Maine voters to weigh in this fall,” he said in a statement. “Over three years of diligent work, a diverse group of legislators, utility experts, economists [and] conservationists, among many others, crafted this policy to meet the complex and urgent needs of our energy future.”

Maine’s legislature will have an opportunity to override the veto when it reconvenes temporarily on Monday. If an override is unsuccessful, the nonprofit coalition Our Power plans to gather the signatures needed to put a referendum question on the ballot in November.

“With three-quarters of Mainers supporting our proposal and volunteers contacting us daily, we are confident we can collect signatures and succeed at the ballot box,” Stephanie Clifford, campaign manager for Our Power, said in a statement.

CMP Report

The plan to create Pine Tree is the result of concerns that CMP and Versant, which are foreign-owned IOUs, have not met customer needs in terms of reliability, rates and customer service.

CMP is the larger of the two utilities, serving about 600,000 customers in Maine. It is owned by Spain-based Iberdrola via Avangrid (NYSE: AGR). Versant, which is a subsidiary of Calgary, Canada-based ENMAX, only serves 160,000 customers.

Mills’ veto came one day after the PUC released a third-party management report of CMP that stemmed from an investigation into the company’s rates (2018-00194).

“The commission ordered this audit to address concerns about whether there are fundamental problems with the company’s management structure that have led to the erosion of service quality experienced by customers,” Chairman Philip Bartlett said in a notice for the report.

While the report found that Avangrid cares about improving its services and is not “fundamentally or irredeemably flawed,” it has faced challenges that relate to the 2015 merger of Iberdrola USA and UIL Holdings, which formed Avangrid.

By 2019, those challenges caused a lack of public confidence in the utility, the report said, but recent changes in CMP management have improved customer service performance.

“This independent report recognizes that CMP is on the right path to overcome the organizational challenges that impacted our service to customers in the past,” CMP Executive Chairman David Flanagan said in a statement. “We have made steady improvements in our service and reliability, and we are entirely committed to ensuring our customers’ expectations are met, and even exceeded, and that power is delivered affordably, safely and reliably while we invest in the grid to accommodate new renewable energy sources.”

Bartlett said the PUC will take comments on the report through the end of July and determine appropriate next steps, which could include a formal proceeding.