California dreaming: consumer-owned power in Maine
For Maine’s electricity consumers, California provides a real-life experiment in energy economics. The state’s largest investor-owned power company, Pacific Gas & Electric Company, is currently in bankruptcy for starting wildfires that killed dozens of people and burned down entire communities. The wildfires were caused by PG&E’s poorly maintained transmission and distribution equipment, as the company spent its money trying to pump up its stock price.
PG&E completely surrounds the Sacramento Municipal Utility District, a consumer-owned utility with 1.5 million customers (more than Maine’s population). When the rest of Northern California went dark again last year, none of SMUD’s customers lost power. That’s because they own the company – their money is invested in Main Street, not Wall Street. And they pay 35% lower rates than PG&E, too.
Here in Maine, we have a choice between similar alternatives. Last year, Governor Janet Mills created a new policy agenda to replace fossil fuels with renewable energy within 30 years. That means investing $10-$15 billion in our transmission and distribution grid.
Where will the money come from? Private companies like CMP and Emera Maine would finance it at 8 percent and pass the costs along to us in higher rates. At that price, we probably can’t afford to build the electric system we need for a low-carbon future.
But let’s look at SMUD. Legislators are now considering LD 1646, a bill to create the consumer-owned Maine Power Delivery Authority. MPDA would purchase our transmission and distribution system from CMP and Emera Maine at fair market value without using any tax money. As a non-profit company, it would qualify for much cheaper financing than investor-owned utilities: 3 percent. That would lower the cost of electric service in Maine and save $5 billion to invest in a better, cleaner grid. Maine Power for Maine People: why pay more?
Please support LD 1646,
“An Act To Restore Local Ownership and Control
of Maine’s Power Delivery Systems.”
Opinion from around the state:
1. “Consumer-owned utility study shows long-term savings for Maine ratepayers”
Dan Neumann, Maine Beacon
Despite concerns from lawmakers about its impartiality, LEI’s study projects that ratepayers could expect to see significant cost savings. The study supports much of the core argument made by proponents of the consumer-owned utility that the more Maine invests in its electrical grid the less Mainers will see in overall costs.
2. “Letter to the editor: Study overlooks clean-energy benefits of consumer-owned Maine utility”
Marianne Hill, South Portland
The LEI report warns that litigation by CMP and Emera contesting a buyout could drive up transition costs and lead to higher rates in the short term. The Public Utilities Commission could set rules ensuring that shareholders and executives bear those costs, not ratepayers. Also, the PUC sets the rate of return for CMP and Emera, which affects their market value. A decision by the PUC to lower that rate due to CMP’s multiple failures could reduce the acquisition cost to a reasonable level rather than the inflated values that the LEI report assumes.
3. “The Rest of the Story”
Darien “Deke” Sawyer, Jackman
This week LEI released their long awaited study concerning LD 1646. What was obviously missing from the report is our current reality concerning delivery of power in the State of Maine! We already have some of the highest delivery rates in the country. The report was also quick to say that a new COU “could not guarantee better service.” What they ignored is that without a new COU we can guarantee more reliability issues.