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Home » News » Public control isn’t the answer to concerns about Maine’s power utilities
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Public control isn’t the answer to concerns about Maine’s power utilities

David WoodsomeBy David WoodsomeFebruary 24, 2020Updated:February 24, 2020No Comments3 Mins Read
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This item was originally published in the Portland Press Herald.

Maine consumers – myself included – are understandably frustrated with Central Maine Power, and there is no doubt the utility needs to improve. However, the answer is not having the state of Maine take over CMP and Emera Maine and operate them as an agency of state government – something no other state has done before for its largest utilities.

Legislation is pending before the Maine Legislature – L.D. 1646 – that calls for the state to take over CMP and Emera Maine and then hire a private operator to run the enterprise. Last year, I agreed to co-sponsor this bill because I felt it was important for Augusta lawmakers to have this conversation.

However, having heard the arguments on both sides, I have become convinced that a state takeover would not be in the best interests of Maine consumers, no matter how appealing the idea of “local control” may seem. Rather, I believe there are better ways to address the public’s concerns, including by making sure the Maine Public Utilities Commission has sufficient tools to oversee Maine’s utilities. I did not reach this conclusion lightly.

First, CMP and Emera Maine are private companies. So, for the state to take them over, Maine would need to pay fair market value for these companies, which will run into the billions of dollars. Given recent sales of privately owned electric companies, the total price tag could be $7 billion to $9 billion. The cost of this new debt would have to be paid for by all of us in our electric bills.

Second, part of the supposed savings associated with a state-owned electric agency comes from not having to pay taxes to the government. Currently, CMP and Emera Maine pay about $35 million to $40 million a year in state taxes, and if those companies became state-owned, this would create a huge hole in the state budget that would need to be filled by other taxpayers – namely, the rest of us. On the local level, CMP and Emera Maine pay about $70 million in property taxes, payments that would be jeopardized under state ownership. This is one reason that the Maine Municipal Association has come out against this bill.

Third, how sure are we that the state of Maine can do a better job operating our electric grid? Our roads and bridges are owned by the state, and our state and local governments do the best they can to maintain them. But this has not proven to be enough as funding for our highways declines and the potholes grow larger. The state already has tremendous oversight authority over utilities, but are we certain that the state has the means to operate our utilities and keep the lights on?

Fourth, transitioning to a state utility is not a foregone conclusion, even if we pass a law requiring it. The Maine and U.S. constitutions protect against the taking of private property, and the experience of municipalities seeking to take over their local utilities often means years of litigation at a cost of tens of millions of dollars. In the interim, the electric grid risks disarray – and disinvestment – at a time when we need investment to keep the lights on.

In short, “public power” is a good sound bite, particularly given the recent challenges of CMP, which I do not dismiss or discount. But “public power” is not the answer, and Maine will be worse off if we pursue it.

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Central Maine Power Commentary Emera Maine Featured LD 1646 Opinion Public Utilities Commission public-owned utility utility
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David Woodsome

Senator David Woodsome is currently serving his third term in the Maine State Senate. He represents the people of Senate District 33 which consists of the towns of Cornish, Limerick, Newfield, Parsonsfield, Sanford, Shapleigh and Waterboro.

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