Maine Governor Unveils Legislation That Opens Door To Consumer-Owned Utility Option

by Paul Ciampoli
APPA News Director
February 14, 2022

Maine Gov. Janet Mills on Feb. 2 unveiled legislation that, among other things, opens the door for state utility regulators to evaluate whether an investor-owned utility or a consumer-owned utility is in the best interests of the state.

The legislation establishes a process under which the Maine Public Utilities Commission (PUC) determines whether an electric utility is unfit to provide safe, adequate, and reliable service at just and reasonable rates to Maine ratepayers.

If the PUC determines that sale of the utility is necessary to protect the interests of ratepayers, it will then invite bids from qualified buyers and select the purchase proposal that provides the most benefits to customers in the form of better service and lower rates at a fair purchase price.

Additionally, the legislation stipulates that, in the event the PUC invites bids from qualified buyers, it must also consider a bid to create a consumer-owned, quasi-municipal corporation for the purpose of purchasing the utility.

This creates a mechanism whereby the PUC could evaluate whether an investor-owned utility or a consumer owned utility is in the best interests of the State.

The bill also requires that the PUC establish minimum standards of service that utilities must deliver for Maine ratepayers. The legislation also empowers the PUC with enhanced authority to crack down on utilities that do not meet these standards by imposing harsher penalties and, if necessary, even forcing the sale of the utility for inadequate service. 

The legislation was developed by the Governor’s Energy Office in conjunction with Maine’s new Public Advocate Bill Harwood.

The legislation further requires the PUC to set minimum standards for safe, reasonable, and adequate service to Maine customers.

It then requires the PUC to issue quarterly reports on whether a utility is meeting these minimum standards. These reports will address utility operations, customer service, such as billing, and initiatives to combat climate change, such as interconnecting to solar projects. 

If these quarterly reports determine that a utility is consistently failing to meet this standard, then the legislation requires the PUC is to impose new, higher administrative penalties — up to $1 million or 10 percent of the utility’s annual revenue — to force the utility to improve service.

“This new approach establishes an ongoing system of review by the PUC that is a transparent and an alternative accountability mechanism to traditional utility oversight,” according to the governor’s office.

In addition, the bill provides for periodic audits for Maine’s distribution and transmission utilities to ensure that the utility’s cost of providing service are consistent with the estimates used to set rates.

Whenever Maine’s utilities have gone more than five years without a rate case, the legislation requires the utility to make a filing with the PUC comparing its current actual expenses to the estimates used in previous rate cases. If the discrepancy is greater than 10 percent, the PUC may conduct a financial audit. This new mechanism allows the PUC to review the utility’s financial books and records outside of a traditional rate case.

The legislation will be considered by the Maine Legislature’s Energy, Utilities, and Technology Committee.

Maine Group Says Legislation Falls Short

In response to the legislation, Our Power, a Maine group working to create a statewide, consumer-owned utility, said the proposal falls short.

While the governor’s bill “is a start, more details are needed to provide a viable path for consumer ownership,” said former Deputy Director of the State Planning Office, Sue Inches. “To allow for this transformative change, which would offer democratic governance and capital at half the cost, the legislation needs to establish specific and sufficient timeframes, resources, guidance, and public process.”

Our Power has been collecting signatures for a ballot initiative that would create the Pine Tree Power Company, a locally-owned, not-for-profit electric utility for parts of Maine currently served by Central Maine Power and Versant.

Our Power recently acknowledged that it was unable to collect enough signatures for a ballot initiative this year and will continue to collect names for a 2023 attempt, according to an article in Maine’s Portland Press-Herald.