Maine Senate changes course, backs creation of consumer-owned utility
Kevin Miller, Portland Press Herald, Maine
5 min read
Jul. 1—AUGUSTA — The Maine Senate reversed course Wednesday and endorsed a controversial bill to create a consumer-owned utility from Maine's two largest electricity providers.
While the bill requires additional votes in the Legislature, the preliminary totals in both the House and Senate were still far less than the two-thirds majorities that would be needed to override a likely veto from Gov. Janet Mills.
The bill seeks to create an entity known as the Pine Tree Power Company that would use billions of dollars in bonds to buy out the assets of Central Maine Power and Versant Power. The measure failed in the Senate earlier in June by a single vote but picked up support on Wednesday after the sponsors added language that would require the consumer-owned utility to pay property taxes to cities and towns.
After the House voted 77-68 to add the property tax payment requirement, the Senate agreed, on an 18-15 vote that divided members of both parties. Two Democratic senators from Androscoggin County, Sen. Ned Claxton of Auburn and Sen. Nate Libby of Lewiston, changed their votes and supported the amended bill.
During a brief but lively debate, opponents blasted the measure as dangerous and risky to ratepayers, with some even calling it a "socialist takeover" of private businesses.
"That amendment does not make a bad bill any better," said Sen. Trey Stewart, R-Presque Isle. "This is still bad legislation."
But supporters said a consumer-owned utility would put the interests of Maine consumers ahead of corporate investors, eventually leading to lower rates, more investment in the electric grid and better reliability. Both CMP and Versant are subsidiaries of foreign, investor-owned companies.
"This is about competence, functioning and actually performing the job for the people that we represent," said Sen. Rick Bennett, R-Oxford. "The two incumbent, investor-united utilities controlled by foreign companies and foreign governments, have failed at that. They have no incentive."
Bennett and Rep. Seth Berry, D-Bowdoinham, have been the lead sponsors and proponents of the bill that sprang out from growing frustration with rates and extended power outages in Maine. Berry and Bennett are also staunch critics of the CMP-backed New England Clean Energy Connect project, which would build a 145-mile transmission line from Quebec to western Maine.
Pine Tree Power would be controlled by an elected board and could take advantage of low interest rates available to quasi-governmental entities in order to leverage the bonds necessary to buy CMP and Versant's assets. While supporters have predicted that buyout would cost roughly $5 billion, opponents have warned the bill could end up saddling ratepayers with $13 billion in debt after the inevitable, lengthy court challenges waged by CMP and Versant.
Voters would have to approve the creation of Pine Tree Power during a referendum this November, which bill supporters said ensures the measure would have broad support from ratepayers. But before any of that can happen, the bill would have get by Mills, who has expressed strong reservations about potential ramifications.
On Tuesday, Mills' office made it clear that the amendment requiring the consumer-owned utility to pay property taxes did not address all of the governor's concerns. Although "sympathetic to concerns about Maine's utilities," Mills believed the bill would "create more problems than it actually solves," said her spokeswoman Lindsay Crete.
Crete said the last-minute move to amend the bill was more evidence the legislation needed more work.
"The unveiling of this amendment — one day prior to a vote on it, which also will be the same day the Legislature is scheduled to consider a host of serious matters, including the budget — leaves little time for serious public consideration and feedback and simply underscores one of the governor's primary concerns: that proponents of the legislation are attempting to too quickly advance a bill that would have massive implications for the state without having addressed its serious questions in a robust way," Crete wrote.
During debate on the House floor, Berry said he has been assured by legal experts that the latest version of his bill will allow municipalities to receive property tax payments while still enabling the consumer-owned utility to benefit from tax-exempt revenue bonds.
"We are not pumping hundreds of millions of dollars out of this state if we go forward in this direction," Berry said. "We are, instead, investing those in our municipalities. We are not depending on a grid that is owned by those from far away who may have no interest in our future and in our energy decisions in here Maine.
In related action, the Senate narrowly failed to override a Mills veto of a bill that would have barred foreign-owned companies from spending money to influence ballot-question campaigns. The 22-12 vote on L.D. 194 fell one vote short of the two-thirds threshold needed to override the veto.
The measure was aimed squarely at Hydro-Quebec, the Canadian company that has spent $10 million to build public support for the CMP-backed transmission line across western Maine. The bill cleared the Senate, 23-11, after passing in the House of Representatives on a vote of 87-54.
Much like the $1 billion project itself, the bill saw bipartisan support and opposition. Proponents spoke out against foreign influence in Maine political decisions, while opponents raised concerns about fairness and constitutional issues.
During a State House rally earlier Wednesday, Bennett called it "rotten" that a foreign-owned corporation could spend so much money to sway Mainers' opinions. Bennett said seven other states already ban foreign nationals or foreign governments from spending on state referendum elections and said Mills' veto letter was "full of misinformation" and erroneous legal interpretations.
"She's wrong on the policy and she's wrong on the law," Bennett said. "One wonders if she or her staff actually read the bill."
In her veto message, Mills wrote that the bill could have affected dozens of Maine businesses with foreign investment and posed constitutional concerns based on U.S. Supreme Court rulings on attempts to limit political speech or spending.
"If L.D. 194 were to become law, I question whether it could survive constitutional challenge," Mills wrote. "But more fundamentally, I trust Maine voters to sort through competing views as they consider how to cast their vote in any referendum, and I see no need for state government to protect them from information coming from any particular source, in accordance with our already robust disclosure requirements."
