- The Maine Wire - https://www.themainewire.com -

Mills vetoes state takeover of utility companies, setting stage for future ballot initiative

Gov. Janet Mills held a press conference on Tuesday to announce her veto of LD 1708, which would have created a consumer-owned utility known as the Pine Tree Power Company.

Mills’ veto was expected, as she had been publicly critical of the bill before. LD 1708 would have forced the state’s investor-owned utilities, Central Maine Power and Versant Power, to sell their assets to Pine Tree Power. To finance these purchases, Pine Tree Power would have issued debt against its future revenues. It also would have been governed by a publicly-elected board, which would have used a competitive bidding process to award contracts to run its acquired utilities.

In a June 2 interview with Maine Public, Mills called the bill rushed and said it provided a “rosy solution to a very complicated series of problems.” 

Mills reiterated many of these concerns in her veto letter. Mills stated she believes the services Maine utilities provide are flawed and can be improved, but she does not believe LD 1708, which she called “a patchwork of political promises rather than a methodical reformation of Maine’s complicated electrical and distribution system,” is the right solution.

Mills noted the bill was printed on May 17, heard in Committee on May 20, worked in committee on June 1 and then voted on the same day. She also expressed concern that a last minute amendment that would have made Pine Tree Power liable to property taxes didn’t take into account that doing so may have made it unable to issue tax-exempt bonds.

Mill expressed further concerns that what she called the bill’s “rush to enactment” didn’t take into account issues an independent review conducted by London Economic International identified as needing further study. She noted that the Energy and Utilities Committee voted to create a task force to look into those concerns, but the task force never materialized. As a result, Mills said significant issues identified by the independent review, such as a lack of a business plan, have not been addressed.

“Instead, L.D. 1708 simply defers them to be dealt with by the authority’s elected board. The stakes are too high for that. Basic due diligence demands that we have that information before committing the State to this large a venture.” said Mills. 

Another of Mills’ concerns was the bill’s requirement that Pine Tree Power award its utility contract to bidders with “familiarity with the systems to be administered.” Mills pointed out this “would leave Central Maine Power and Versant – the same entities whose assets were just condemned – in the most obvious position to win the contracts to operate their own former assets.”

The bill also requires the Public Utilities Commission to find that all debts incurred by Pine Tree Power prior to acquiring Versant and Central Maine Power “just and reasonable.” As there is no requirement that voting members of Pine Tree Power’s governing board have experience running a utility, Mills expressed concern they would have to contract with attorneys and consultants to help fulfill the company’s mission. Mills said this, coupled with the law’s requirement that all expenses be declared just and reasonable, is “a recipe for excessive spending and an inevitable increase in rates to consumers.”

LD 1708 would have put the question of whether to create a consumer-owned utility to voters. The bill stipulated the language that would have appeared in the ballot question: 

“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?”

Mills took issue with this wording, which she said was not an even-handed treatment of the issues surrounding LD 1708.

“It is an attempt to put a finger on the scale of the referendum process by highlighting the most optimistic potential outcomes, with no mention of the potential downside risks,” said Mills.

Mills’ veto letter also noted that the bill was opposed by the mayors of seven Maine cities, three former PUC Commissioners, and the International Brotherhood of Electrical Workers (IBEW).

Following Mills’ veto, Michal P. Monahan, the International Vice-President for the IBEW’s second district, applauded the governor’s decision. 

“This bill would have created a government-controlled utility that would have put the retirement benefits of our members at risk, threaten their collective bargaining position by making them state employees and likely lead to less investment in the grid.” Monahan said.

Thomas Welch, a former chair of the PUC, also expressed support for the governor’s decision.

“The Public Utilities Commission, under the able leadership of Chairman Bartlett, has already shown a willingness to use the extensive powers granted it over Maine’s investor-owned utilities by the legislature to address the issues raised by proponents of the government takeover,” Welch said. 

It’s unlikely the bill has enough support to meet the two-thirds majority threshold required for the legislature to overturn the governor’s veto. LD 1708 passed by a vote of 77-68 in the House of Representatives and by a vote of 18-15 in the Senate.

Rep. Seth Berry (D-Bowdoinham), the bill’s sponsor, expressed disappointment with the governor’s veto.

“I’m deeply disappointed 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. Over three years of diligent work, a diverse group of legislators, utility experts, economists, conservationists, among many others, crafted this policy to meet the complex and urgent needs of our energy future.” said Berry.

Berry and Our Power, a ballot question committee that supports consumer-owned utilities (COUs), intend to ensure the language behind LD 1708 still appears on the ballot. Our Power first registered with the state in 2020, with the intention of creating a ballot question on COUs.

Stephanie Clifford, the campaign manager for Our Power, said in a statement, “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.”