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Gov. Mills unveils bill that further regulates Maine utilities, opens door to consumer ownership

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On February 2, Gov. Janet Mills unveiled draft legislation intended to reform oversight of Maine’s private utility companies. Included in the legislation, preliminarily titled “An Act to Ensure Transmission and Distribution Utility Accountability,” is a provision that would require utilities to sell to a qualified buyer if they fail to meet the performance standards outlined in the bill.

The bill directs the Public Utilities Commission (PUC) to create minimum service requirement standards for transmission and distribution utilities. The rules must include standards for reliability of service, and govern the timeliness of various aspects of customer service, including responsiveness to requests and accurate billing. The rules also require the PUC to set standards related to the frequency of customer complaints and the timeliness of restoring service following storms.

Under the bill, utilities would be required to file a quarterly report with the PUC containing quantifiable, verifiable data. The PUC is required to use that data to score utilities.

Utilities that fail to meet these standards for two consecutive calendar quarters can be fined up to $1 million, or 10% of the annual gross revenue earned from Maine taxpayers, whichever is less. Money earned from penalties will be used to reduce energy costs for low-income customers.

If the PUC has not made a rate determination for a utility with over 50,000 customers in the past 5 years, the bill would also require utilities to submit to the PUC a report comparing their actual costs with cost estimates most recently used to set rates. If the PUC finds a difference of more than 10% between actual and estimated costs, it would be required to either audit the utility or disallow cost recovery of a utility’s future rate cases.

The bill also creates a process by which utilities can be divested of their transmission and distribution facilities if they consistently fail to meet the performance standards outlined in the legislation.

Under the bill, the PUC would “request proposals from qualified buyers interested in acquiring the transmission and distribution utility or its assets.” The PUC would also consider proposals to create a “consumer-owned quasi-municipal corporation” that would purchase the utility.

Within 30 days of accepting proposals, the PUC has to establish a committee of five appointed members who will work to develop a proposal for creating a consumer-owned quasi-municipal corporation. Three members would be appointed by the governor and two would be appointed by the state’s public advocate.

The PUC could order a utility to turn over their facility to a consumer-owned corporation if they determine doing so will result in long-term net benefits to ratepayers in the form of lower rates or better services. It must also consider whether the proposal from the consumer-owned corporation is a fair and reasonable purchase price and demonstrates that the buyer will have sufficient “financial and technical capability, expertise and experience to own and operate the utility and the ability to comply with all the legal requirements.”

If more than one proposal meets all three of the criteria, the PUC is directed to divest to “the proposal that results in the greatest net benefits to ratepayers.”

Finally, the proposed legislation requires utilities to submit a 10-year plan for addressing the effects of climate change on their assets no later than July 1, 2023 and every two years thereafter.

If the legislation is adopted and becomes law, the PUC would have to adopt the new rules no later than June 30, 2023.

The bill marks a departure from Mills’ public opposition to a consumer-owned utility. Mills vetoed LD 1708, which would have led to Central Maine Power (CMP) and Versant Power being taken over by the Pine Tree Power Authority, on July 13, 2021.

In her veto, Mills objected to multiple provisions within the bill, which she called “hastily drafted and hastily amended.” The bill required that CMP and Versant’s assets be seized through eminent domain and then sold by a newly-created public power board to a bidder familiar with the facilities and systems. Mills noted this would likely mean CMP and Versant would be awarded the contracts.

But despite her criticisms of LD 1708, Mills also wrote she was “open to considering alternative proposals and strengthening the authority and penalties available to the PUC.” Mills noted that Maine statute allows the PUC to hold an adjudicatory hearing to determine whether a utility is fit to serve. Her newly released draft legislation amends and strengthens the same statute.

“An evidence-based proceeding such as this might be more appropriate for such a profoundly important change,” wrote Mills in her veto of LD 1708.

According to a press release from Mills’ office issued Wednesday, the draft legislation was developed jointly by the Governor’s Energy Office and the public advocate. The bill is sponsored by Sen. Stacy Brenner (D-Cumberland) and co-sponsored by Sens. Mark Lawrence (D-York), Trey Stewart (R-Aroostook), Eloise Vitelli (D-Sagadahoc), House Speaker Ryan Fecteau (D-Biddeford), and Rep. Nate Wadsworth (R-Hiram).

Following the defeat of LD 1708, Our Power began circulating petitions for a citizens initiative that would put the question of whether to create a consumer-owned utility on the ballot. While the group hoped to put the question on the November 2022 ballot, they announced on January 19 their intention to delay this until 2023.
The group was able to collect around three-quarters of the 63,000+ signatures required for the measure to appear on the 2022 ballot. They blamed winter weather and the pandemic for the shortage of signatures and vowed to continue working to put the question before voters in 2023.

About Katherine Revello

Katherine Revello is a reporter for The Maine Wire. She has degrees in journalism and political science from the University of Maine. Her writing has appeared in Reason, The Washington Examiner, and various other publications. Got news tips? Contact Katherine at krevello@mainepolicy.org.

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