Energy committee holds hearing on Gov. Mills’ utility accountability bill

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The Maine Legislature’s Energy, Utilities and Technology Committee held a public hearing February 22 on LD 1959, a bill presented by Gov. Janet Mills that seeks to make the state’s utility companies more accountable by creating quarterly report cards based on service standards. The bill also creates a mechanism for utility companies that routinely fail to meet service standards to be sold to a consumer-owned, quasi-municipal corporation.

The bill would give the Public Utilities Commission (PUC) greater authority to set minimum service standards for transmission and distribution utilities, including reliability of service, responsiveness to requests, accuracy in billing, the frequency of customer complaints and the timeliness in which service is restored following an outage. 

Utilities would be required to file a quarterly report with the PUC and the PUC would create a quarterly report scoring the performance of utilities against minimum service standards.

The bill would double the penalties the PUC can assess for failure to meet service requirements. Under LD 1959, a utility that fails to meet the minimum standards for two consecutive calendar quarters could be fined up to $1 million, or 10% of the gross revenue it earns annually in Maine, whichever is less. 

The bill also creates a process by which utilities can be divested of their transmission and distribution assets if they consistently fail to meet performance standards. The PUC would hold an adjudicatory hearing to make that determination and must request proposals from “qualified buyers interested in acquiring the transmission and distribution utility or its assets and shall consider proposals to create a consumer-owned quasi-municipal corporation to acquire the utility or its assets.”

The bill would create a five-person commission, with three members appointed by the governor and the remaining two appointed by the state’s public advocate, charged with developing a proposal on behalf of a consumer-owned utility.

LD 1959 further requires transmission and distribution utilities to file a 10-year plan for “addressing the expected effect of climate change on the utility’s assets needed to transmit and distribute electricity to its customers.” Should the bill become law, utilities would have to file an initial report by July 1, 2023 and every two years thereafter.

The bill also expands whistleblower protections to utility contractors and affiliated interests of utilities and grants them the right to testify before the PUC, a legislative committee, or the state’s public advocate.

During the public hearing, bill sponsor Sen. Stacy Brenner (D-Cumberland) said Maine’s utility companies have had their priorities backwards during the past several years. Brenner said the financial interests of shareholders have taken a front seat “to the detriment of all of us.”

Brenner said LD 1959 would create more transparency for transmission and distribution utilities and represents “an opportunity for us to do something now, not years down the line.” Sen. Eloise Vitelli (D-Sagadahoc), a co-sponsor of the bill, also spoke in favor of the transparency measures within the bill.

Dan Burgess, director of the Governor’s Energy Office, and William Harwood, the state’s public advocate, testified in support of LD 1959 as well.

Burgess said the bill gives the PUC enhanced authority and direction from the legislature to crack down on utilities that do not meet standards and force the sale of utilities that provide inadequate service to Mainers. 

Rep. Melanie Sachs (D-Freeport) questioned Burgess about whether penalties were likely to be passed on to ratepayers. Burgess stated the legislation has the penalties come from utility shareholders, not ratepayers. He also said he believes the PUC has a system in place to prevent this from happening.

Sachs further questioned Burgess about how the bill’s requirement that utilities develop a climate plan will address issues of affordability. According to Burgess, reporting requirements will be a first look at where utilities’ physical operations might be vulnerable to climate change.  

Rep. Seth Berry (D-Bowdoinham) asked Burgess about whether the governor has interest in further amending the bill. Berry asked Burgess whether the governor would be open to adding affordability to the list of standards included on the quarterly report cards created by the bill. Berry further asked about potential changes to the bill related to incorporating public input more into the decision-making processes and changes to its expanded protections for whistleblowers. Burgess indicated he was willing to discuss changes.

In his testimony, Harwood echoed many of the same arguments as Burgess and the bill’s sponsors. Harwood placed emphasis on the expanded protections for whistleblowers offered by LD 1959, which he referred to as the “sleeper” section of the bill. He said he is “very confident” the bill’s protections for whistleblowers will help control utility costs.

Sachs questioned Harwood about how the bill’s strengthening of the PUC’s existing powers will help make utility companies more accountable. She also questioned why the PUC has never previously used its ability to force the sale of a utility company given documented underperformance by Central Maine Power (CMP) and Versant.

Harwood called the PUC’s ability to force the sale of an underperforming utility the “shotgun behind the door that you hope never has to be used, but it’s there if you need it.” He said the existing law has been valuable because it reminds utilities there are consequences for not living up to statutory standards. 

Harwood said LD 1959 would substantially strengthen the process by which the PUC can force a utility to divest its transmission and distribution utilities. He added that he assumes the PUC has never used that power before because it has assumed financial penalties were enough of an incentive for utilities to meet service standards.

Much of the testimony offered in opposition to LD 1959 during the bill’s public hearing was offered by supporters of a consumer-owned utility. Multiple individuals testifying against the bill referenced LD 1708, which would have created the Pine Tree Power Company, a consumer-owned utility. The bill, which was sponsored by Berry, was passed by the 130th Legislature during its first session but was vetoed by Mills.

Our Power Maine is currently working to collect signatures to put a measure on the ballot in November 2023 that would ask voters to approve the creation of a public-owned utility.

Andrew Blunt, the legislative director of Our Power, was among the individuals who testified against LD 1959. Blunt called LD 1708 a “visionary model for utility accountability.” 

He offered three objections to LD 1959. According to Blunt, there is no place for public input anywhere in the bill, which he said relies on the PUC, a “quasi-judicial authority” that is “purposefully insulated from the public.” 

He also said the bill would give CMP and Versant a blank slate that it doesn’t deserve. Blunt further said that while the bill introduces the idea of a consumer-owned utility, it doesn’t provide a “detailed path” for creating one. He also objected to the commission created by the bill, which he said would be “created by government insiders.”

Others testifying against the bill expressed concern that LD 1959 could possibly conflict with the consumer-owned utility ballot initiative, should it become law. 

CMP and Versant also testified against the bill. 

Jo Purington, president of CMP, was one of three utility employees who appeared to offer objections. Purington said that while CMP agreed with the governor’s motivation behind the bill and wanted increased accountability and transparency, the company believes the PUC already has authority to hold them accountable.

Purington referenced a $1 million fine the PUC recently levied against CMP for failing to meet performance standards. According to Purington, the PUC also set very stringent metrics for CMP to meet and warned the company that if it didn’t meet those standards, it would face additional consequences. According to Purington, CMP is now meeting and exceeding those metrics.

Other opponents included Sen. Richard Bennett (R-Oxford), who was a co-sponsor of LD 1708. Bennett called the bill’s promise to ensure accountability “a sham.” He said the “unelected and unaccountable” PUC already has the ability to create performance standards and hold utilities accountable, and objected to what he characterized as the bill’s consolidation of power between the PUC and the governor’s office. 

Bennett said LD 1708 would have opened the door to energy democracy in Maine and said a “nonprofit, non-governmental ratepayer owned utility is the best option” for Mainers. According to Bennett, LD 1959 wouldn’t achieve that goal.

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