Inside Augusta

Mills signs packaging bill, vetoes state takeover of private utilities

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Gov. Janet Mills just missed the mark on two controversial and misguided pieces of legislation this week: an extended producer responsibility (EPR) packaging bill and another that would establish a “consumer-owned utility” in Maine.

Passed by the legislature on July 2, LD 1541, “An Act To Support and Improve Municipal Recycling Programs and Save Taxpayer Money,” sponsored by Rep. Nicole Grohoski (D-Ellsworth), was signed into law by Mills on Monday.

The law allows the Maine Department of Environmental Protection to set the packaging fee schedule of recyclable materials on producers, based on the per-ton costs derived from collecting and processing packaging material.

As shown above, those costs are high for the most commonly recycled materials.

The law is the first of its kind in Maine and in the nation. That alone is cause for concern. EPR legislation is mostly an experiment, since few jurisdictions have enacted similar laws and little literature exists on the topic, as was noted in a study issued last month from researchers at York University.

The study found that LD 1541 would raise average monthly grocery costs for a family of four in Maine by at least $30, or as much as almost $60, depending on the costs incurred by producers.

After passing similar legislation, jurisdictions in Canada saw no significant reduction in their local taxes, which was advocates’ rationale for advancing EPR legislation in Maine. Lacking any real evidence the law will improve Maine’s recycling systems without burdening consumers, Governor Mills should have vetoed LD 1541. 

The second bill of importance on her desk this week was LD 1708, which was thankfully vetoed. Passed by lawmakers on June 30, “An Act To Create the Pine Tree Power Company, a Nonprofit Utility, To Deliver Lower Rates, Reliability and Local Control for Maine Energy Independence,” sponsored by Rep. Seth Berry (D-Bowdoin), would not have done what its title describes.

If the governor allowed the bill to become law, LD 1708 would have posed the following referendum question to Maine voters in November:

“Do you favor the creation of the Pine Tree Power Company, a nonprofit, privately operated utility governed by a board elected by Maine voters, to replace Central Maine Power and Versant Power, without using tax dollars or state bonds, and to focus on delivering reliable, affordable electricity and meeting the State’s energy independence and Internet connectivity goals?”

The bill would have been nothing more than a state takeover of the power industry in Maine.

If implemented, it would have created the Pine Tree Power Company, a privately-operated, nonprofit utility run by a governing board of 11 members, seven of whom would be elected, voting members and four of whom would serve as expert advisory members.

Pine Tree Power Company would have the powers and duties of a transmission and distribution utility and would be required to acquire the facilities of existing investor-owned utilities, namely Central Maine Power and Versant Power, through eminent domain.

Such a takeover of private enterprise would be a grotesque use of government power.

Electrical unions were concerned their workers would lose the right to strike under the law, and other opponents noted the bill would lead to costly litigation.

When asked about LD 1708 in June, Mills said, “I think the legislature needs to understand what they’re voting on and answer these questions that I’ve posed, that we’ve posed in my testimony, in my energy office testimony, and a lot of other people posed in their testimony, before they pass it on sight-unseen to the voters of Maine as a rosy solution to a very complicated series of problems.”

Such a bureaucratization of Maine’s power industry would surely hurt workers and consumers alike. 

In her press conference on the veto, Mills said the bill’s quick succession through the legislature was “particularly disturbing” and cited opposition from a diverse coalition of voices, from Bath Iron Works to seven different mayors across Maine.

She said the bill was one of the most consequential that the Legislature had ever considered, and so it deserved a much more thorough review process and further study.

The bill was proposed in late May and voted out of committee within three weeks. It was rushed and poorly constructed from the beginning.

Passed by both bodies with narrow majorities, it’s unlikely there’s enough support to overcome the governor’s objections in either chamber of the legislature, which would require two-thirds support.

Supporters claim the governor’s decision will ignite an effort to put the issue to Maine voters by way of the citizen initiative process. Perhaps that’s what they should have done all along, instead of forcing a statewide vote without doing the dirty work of ensuring enough Mainers actually care about their idea. 

Mills just missed the mark on these two decisions. It’s a monumental victory that the government is not usurping the assets of Maine’s two largest utility companies, at least for now. But unfortunately, a new recycling experiment will soon be underway in our state.

Mills should have vetoed both measures.

About Nick Linder

Nicholas Linder, of Cincinnati, is a communications Intern for Maine Policy Institute. He is going into his second year of studying finance and public policy analysis at The Ohio State University. On campus, he is involved with Students Consulting for Nonprofit Organizations and Business for Good.

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