London Economics International confirms long-term consumer savings, but still gets a C
Last weekend, members of the legislature’s Joint Standing Committee on Energy, Utilities and Technology received LEI’s controversial report on the proposed Maine Power Delivery Authority. The report confirmed that a consumer-owned utility like MPDA would provide long-term electric delivery service at substantially lower cost than CMP or Emera Maine.
On other key issues like electric system reliability and CMP’s well-known management problems, the report was evasive. Gordon Weil, Maine’s former Public Advocate and an authority on electric power, called it “grossly incompetent.” He was particularly critical of the report’s “flawed or unsupported assumptions” about consumer costs and benefits.
One example: LEI claims that MPDA would use its tax-exempt status to starve local and state governments of revenue. But like most non-profit utilities, MPDA would make a “payment in lieu of taxes” (known as PILOT), equal to or greater than what investor-owned utilities presently pay in taxes. According to Thom Harnett and Joanna Bozuwa, non-profit utilities around the country contribute one-third more of their operating revenues than skilled tax-avoiders like CMP and Emera. (Click here for details).
The report’s drawbacks come as no surprise to power industry experts. LEI was created in the late 1980s to help privatize Britain’s then-public electric power system. Its client list now includes 100 large corporations and financial institutions, but no consumer-owned utilities.
Apparently, LEI’s high-powered consultants are good at what they do. Since Britain’s privatization, energy company profits in the U.K. have ballooned by more than 400 percent. British consumers now pay two-thirds more for electricity than they did in 2000. Hold onto your wallet, Mainers, the experts are here!
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Opinion from around the state:
1. “Firm did ‘independent study’ of electric line while working for energy giant that could make billions from the line”
Maine Focus report on London Economics International (LEI)
Josh Keefe, Bangor Daily News
In late 2017, Maine energy regulators hired an outside firm to analyze the economic impact of the 145-mile hydropower transmission line proposed for western Maine. But while that firm was conducting its study, it was simultaneously working for the Canadian energy company that stands to make billions from the line. Maine regulators downplayed the appearance of a conflict of interest, while others experts said the firm’s work for both sides should raise questions about what was billed as an independent report
2. “Letter: Support bill to jettison CMP”
Steve Lauder, Waterville
As both a Central Maine Power customer and former employee, I have been disappointed in CMP’s recent problems. And now, supposedly to correct some of the problems and for “reliability upgrades,” the Maine Public Utilities Commission staff has recommended an 8.1% rate hike. Please ask your legislators to support this effort to bring more reliable and less costly electrical power to Maine.
3. “Yes! to Public Power”
Sarah Miller, Camden
If everything is going to go electric, it’s critical that the power flows reliably, affordably and intelligently to everyone. There’s no indication CMP is up to that task. Imagine how much quicker and probably less costly it would be if a helpful utility had been assisting Maine towns with this process from the beginning.