Is consumer owned power more “Big Government”? No!
One question we’ve been hearing about the Maine Power Delivery Authority is whether it will be a state government agency. Let’s be perfectly clear: MPDA will not be a state agency. It will be owned by its customers just like Kennebec Light and Power District and Maine’s other consumer-owned utilities (“COUs”).
It will be an independent business run by a Maine-based board of directors. It will operate entirely with the money it makes from delivering electricity: no taxes or other government money will be involved. And it will provide this service at far lower cost than CMP or Emera. In Maine, COUs deliver power for 18 percent less than the two big for-profit utilities.
And it will bring great benefits to Maine ratepayers. CMP and Emera know that they can’t beat MPDA on cost and reliability so they are trying to distract you with scare tactics relating to acquisition value. The real benefits come from lowering the cost of investing in the grid to achieve our energy goals. Those investments bring deep cost savings – over $160 million each year. The LEI report agrees that Mainers will benefit from these long-term savings.
The faster we electrify our economy to meet our climate goals, the more we will save with the financing power of a consumer owned utility. This will lead to a virtuous cycle: By keeping our money here in Maine, electricity costs can be kept more reasonable and choices like heat pumps or electric vehicles will be put within reach of every Mainer.
And MPDA will reimburse towns for every penny of property taxes that CMP and Emera would have owed.
Consumer owned power in LD 1646 is a good deal for Maine.
Please support LD 1646,
“An Act To Restore Local Ownership and Control
of Maine’s Power Delivery Systems.”
Opinion from around the state:
1. “A Consumer Owned Electric Utility for Maine”
IOUs are not motivated to invest in this: their business model limits them to selling centrally generated electricity and making a profit on every storm-damaged pole, transformer and foot of wire. Their corporate mission is to maximize shareholder profits.
In contrast, a COU’s sole responsibility is to provide the highest quality reliable service at the lowest possible rates to its customer-owners. This is why California’s new law authorizes cities, towns and counties to establish their own publicly owned electric utilities. In Maine, pending legislation (LD 1646, An Act to Restore Local Ownership and Control of Maine’s Power Delivery Systems) seeks to establish a consumer-owned Maine Power Authority (MPA) to take over the transmission and distribution assets now owned by CMP and Emera Maine and manage them in the public interest.
The MPA would neither be financed by tax dollars nor by expensive, high interest shareholder equity. . . . The estimated cost we consumers would pay on financing our new COU is $6.72 per $100 borrowed @3% for 20 years, compared to the $10.36 per $100 (in taxes, interest and dividends to shareholders) we are now paying for.
. . . . In this new energy landscape there is no role for corporate business models so outdated that, for years, they felt the need to sabotage the development of Maine’s renewable energy technologies.
Despite concerns from lawmakers about its impartiality, LEI’s study projects that ratepayers could expect to see significant cost savings over the longer term. 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.
Paul Kando, Lincoln County News
2. “Consumer-Owned Utility A Good Idea”
CMP is a foreign-owned monopoly that controls our state’s most vital energy. They answer to their shareholders, not to Maine citizens. If we create a consumer-owned utility, it would keep hundreds of millions of dollars per year here in Maine, not send it overseas. The new utility would be owned by a regulated nonprofit utility. It would not be run by the state or a state agency, but would be privately operated. Operations would be competitively bid, making for more free-market competition than we have now.
There are many other reasons L.D. 1646 is a good idea. It would involve no tax dollars. CMP’s equity investments cost us – its captive customers – between 9% and 13%. Maine Power would finance its infrastructure at 2% to 5% interest using tax-exempt revenue bonds. It’s like refinancing a home at a lower rate. Rates paid by customers would also stop rising and then would fall, over time, by as much as 15%. When New York created the Long Island Power Authority in 1998, rates for all customer-owners dropped by 20%.
Consumer-owned utilities have proven to be twice as reliable as for-profit utilities. We would have fewer power outages for shorter periods of time. Current utility workers could keep their jobs, pay, and benefits, and current Maine consumer-owned utilities, such as Kennebunk, Madison, and Houlton, would be unaffected. This bill is a win for all Mainers. Our grid would be run by Maine people and for Maine people.
Jill Linzee, New Harbor
3. “LD 1646, A Win-Win for Maine”
Luckily, LD 1646 promises relief. This bipartisan bill creates a Maine-based, customer-owned utility using revenue bonds, not taxpayer money. It will buy the assets of CMP and Emera at fair market prices. A 10-member board representing all customer groups will make decisions benefiting Maine ratepayers, not profit-hungry investors. The plan ensures that current workers keep their jobs, contracts and benefits, and that local taxes currently paid by CMP and Emera are matched by the new utility.
For customers the good news is that consumer-owned utility rates are 12- to 15-percent lower than those charged by investor-owned power companies around the nation. Mainers will keep more of their paychecks while hundreds of millions of dollars a year remain here instead of being sent to Spain, Qatar, or elsewhere.
Most important, our consumer-owned utility will focus on a future that’s increasingly powered by electricity. Surging sales of efficient electric vehicles and home heat pumps will likely double or triple demand for clean, reliable power. Maine is blessed with abundant, renewable resources: wood, wind, solar, hydro and tidal. Vital decisions about how to generate, store and expand them should be made here, not in distant corporate boardrooms. A successful example can be found in Nebraska, bedrock of the conservative heartland, where 100 percent of their electricity comes from not-for-profit utilities. Our state has an amazing opportunity for a win-win with LD 1646. If you agree, please contact your legislators.
Kayda and Sam Selby, Wiscasset