Central Maine Power Co., Maine’s leading electric utility for more than a century, is facing its greatest challenges ever – or at least since three ultimately unsuccessful 1980s referendums aimed at shutting down the Maine Yankee nuclear plant.
Two more referendums are on the way, the first one on Nov. 2. It attempts to terminate the New England Clean Energy Connect line between Canada and Massachusetts – a project that’s been under construction for several months.
Clearing of land for a new 53-mile section may be nearly complete by Election Day; as of mid-August, workers had cleared 13 miles, and pole-setting has been gathering steam on the established section, which ends at the Lewiston substation.
The second referendum, due in 2022, is more of an existential threat. It would create the customer-owned Pine Tree Power Co. and expropriate the assets of CMP and of Versant, the former Bangor Hydro – the state’s two investor-owned utilities, which collectively serve more than 90 percent of Maine customers.
Backers formally launched the referendum drive on Aug. 16, just a month after Gov. Janet Mills vetoed LD 1708, the bill sponsored by Rep. Seth Berry, D-Bowdoinham, and passed by the Legislature that would have accomplished the same end.
Stephanie Clifford, the spokesperson for the campaign, said the initiative “is very similar, but not identical” to Berry’s bill. The final wording will be determined by Secretary of State Shenna Bellows; signature-gatherers will fan out statewide on Election Day.
For the more immediate referendum challenge, CMP has some cards to play. Last year’s effort to stop the line ended abruptly on Aug. 13 when the Maine Supreme Judicial Court ruled it off the ballot.
For a time, it appeared the new NECEC referendum might suffer the same fate. CMP’s attorneys saw constitutional flaws similar to the first question.
In the end, the challenge was only to the wording of the question, with a suit from Rep. Chris Caiazzo, D-South Portland, as lead plaintiff. It argued that Bellows should have broken the question into three separate components; the high court swiftly rejected it.
Orlando Delogu, emeritus professor at the University of Maine School of Law in Portland, said CMP seems to have concluded that denying a vote to Mainers a second time would be impolitic.
“They will reserve their challenges,” Delogu said, calling the objections “formidable.”
Much of the legal attention, if the referendum is approved – and there’s been no public polling yet – focuses on the retroactive nature of two provisions, one concerning relatively recent construction permits, the other public land leases dating to 2014.
Delogu said the state and federal constitutions prohibit retroactive lawmaking, and separation of powers between the executive and legislative branches may also be at issue.
Berry, a co-chair of the Legislature’s Energy, Utilities and Technology Committee, thinks the measure will pass constitutional muster. His co-chair, Sen. Mark Lawrence, D-Kittery, isn’t so sure: “It’s going to be difficult to stop at this point,” he said.
Lawrence has shifted, however, to a more favorable position on Pine Tree Power, the publicly controlled company that would replace CMP and Versant.
“I originally favored the incremental approach,” Lawrence said: setting up a state public power authority that could buy key assets in transmission and distribution systems. That’s a method similar to Hydro Quebec, prospective supplier of power to the NECEC line, which grew by acquiring investor-owned utilities, eventually making it the largest public power entity in North America.
Other reform proposals floated at the committee included beefing up the Public Utilities Commission and Office of the Public Advocate, and charging them with leading the conversion to an “electrified” economy, including home heating and transportation.
In the end, Pine Tree Power “was the direction the Legislature wanted to go,” Lawrence said. Following Mills’ veto, he said he’s confident voters “will make a good decision” via referendum.
A similar dynamic can be seen in the governor’s veto messages on NECEC and Pine Tree Power. A 2019 bill, LD 1363, also sponsored by Berry, would have delayed the line by requiring additional municipal review.
Mills was dismissive, writing, “This bill is clearly an eleventh-hour attempt to disrupt these well-established processes to derail a single project.”
When she vetoed the public power bill, however, her tone was respectful.
“The performance of our investor-owned utilities in recent years has been abysmal,” she said. “… It may well be that the time has come for the people … to retake control over the assets on which they depend for the lifeblood of our communities, that is, our electric transmission and distribution services.”
While Mills objected to specific provisions, her biggest concern was that the bill was “hastily drafted and hastily amended.”
Berry responded that the bill has evolved markedly over three years, and Lawrence agreed: “The Legislature has taken this as far as it can. Now it’s up to the voters.”
Those involved understand that initiated bills can be amended after passage, as has happened repeatedly in recent years. The Legislature repealed an income tax surcharge approved by voters in 2016, and a retail marijuana legalization plan waited three years, amid numerous changes, before going into effect.
The same could be true for Pine Tree Power.
As the bill stands, all assets of CMP and Versant would be bought by the new company, using low-interest, long-term bonds frequently employed by customer-owned utilities. Of keen interest to voters will be the governing body – an elected, seven-member board chosen from regions comprising five Senate districts.
While a novel concept, Lawrence points out that electing utility regulators is common. Eleven states elect their PUCs, in regions marked by the populist agitation in farm states during the late 19th century. Among them are Illinois, Arizona, Colorado, Georgia, and Nebraska.
For the Maine utility landscape, Nebraska is the closest model. Berry said all the 30-odd electricity suppliers there are public entities – either cooperatives or municipal departments; there are no investor-owned utilities, banned by legislation in 1933.
The architect was Sen. George Norris, a Republican but a close ally of Democratic President Franklin Roosevelt. Together, they created the Tennessee Valley Authority and the agencies that built the Grand Coulee and Bonneville dams.
Norris was frustrated that investor-owned utilities refused to extend service to rural areas; 90 percent of farms at the time had no electricity. Within 20 years “they all did,” Berry said.
Exempted from the Maine takeover would be four municipal departments, in Kennebunk, Houlton, Madison, and Van Buren, plus the Eastern Maine Cooperative in Washington County, and three island co-ops. Berry said PUC regulation will continue for the new company, but regulators tend to have “a light hand” since there’s no incentive to increase profits by stinting service.
In Augusta, Berry has been CMP’s most vocal critic, excoriating the utility for poor service, occasionally prompting corporate responses. With Pine Tree Power, however, he seems to have mellowed, extolling its benefits in measured terms.
The most important, he said, is responding to global warming and climate change. Of six utilities nationwide that have completely “decarbonized” generation, he said, all are municipalities or co-ops. And they’re in unlikely places, including Rockport, Mississippi, and Georgetown, Texas, plus a likely one: Burlington, Vermont.
The commonality is “They’re all rural. They had needs that weren’t being served by the investor-owned model,” Berry said.
In Maine, he said, that’s the next logical step.
Douglas Rooks has been a Maine editor, commentator, reporter, and author since 1984. His latest book is “First Franco: Albert Beliveau in Law, Politics and Love.” Visit douglasrooks.weebly.com/#/ or e-mail [email protected].
Ailing Flanagan believes NECEC is key for renewable energy
David Flanagan was called back in February 2020 for a second tour of duty leading Central Maine Power Co.
Following an earlier rescue mission in 1994, he returned as the company’s executive chairman when a billing system fiasco and the utility’s poor response to a 2019 windstorm sent ratepayer confidence plummeting.
Faced with two referendums that collectively challenge CMP’s survival, Flanagan made it clear he’s marshaling his troops for a concerted counter-attack, despite his own precarious health.
He’s fighting pancreatic cancer, has been working from home for several months, and will become a senior adviser to the company. Joseph Purington, president of operations for Eversource Energy in New Hampshire, was announced as CMP’s next president and chief executive on Aug. 25.
In an interview a day earlier, Flanagan focused on the benefits to Maine from the Hydro Quebec power contract that will send electricity flowing to Massachusetts, and to some extent to Maine.
“People talk about renewables. We’re already at 80 percent renewable sources, and this will get us closer to 100 percent,” Flanagan said. “There’s nothing else that will do that as quickly.”
The type of power is also important, he said: “This is available 24 hours a day, 365 days a year,” unlike solar and wind, which are classified as “intermittent” sources by regulators.
On the Pine Tree Power Co. initiative, Flanagan questioned whether ratepayers will want to take “a $10 billion risk” – the estimated borrowing needed to buy out CMP and Versant.
While conceding the utility had fallen short, Flanagan said hiring and new investment over the most recent 18 months he has served have helped restore customer service, and improved reliability.
As for solar energy, he said CMP “has processed more solar connection applications than any other utility, in any other state” since a 2019 state law opened the floodgates.
In combatting global warming, Flanagan said, “We think we can pass the test.”
— Douglas Rooks
Corridor could depend on court ruling
For several years, permitting for the New England Clean Energy Connect corridor was going smoothly. State, federal and Canadian regulators agreed that after substantial modifications, mostly to reduce environmental impacts, the line could go ahead.
Then came Superior Court Justice Michaela Murphy’s Aug. 10 ruling that a 2014 public lands lease, with a 2019 update, was improperly issued. Her decision invalidated a Department of Environmental Protection permit necessary for the project’s completion.
Whether the decision represents a pothole or an actual crash site may be determined by an appeal to the Maine Supreme Judicial Court, which is expected to hear arguments soon.
There are other routes the line could take, some avoiding public land altogether, but any such change would delay completion, now expected next year, and increase the cost.
In her decision, Murphy said there was no “competent evidence” the Bureau of Public Lands, and its director, Andy Cutko, had properly found no “reduction,” or “substantial alteration” of the land’s value by allowing a 300-foot-wide corridor.
Whether the appeal is successful may well hinge on the high court’s interpretation of the relevant statute, according to Orlando Delogu, emeritus professor at the University of Maine School of Law.
The statute covers the sale, not leasing of public lands, he said; a sale would unquestionably trigger the need for legislative approval, which the bureau contends is unnecessary.
Delogu said Murphy’s decision envisions “a whole new, more robust process to evaluate these public utility leases,” and while “that may be a good idea,” it’s not what the law provides.
The law court has sometimes given more deference to regulators than trial judges. In a 2012 decision involving the Plum Creek development on Moosehead Lake, the court overturned a ruling by Justice Thomas Humphrey, who found – after three years of review – that the Land Use Regulation Commission had improperly issued a permit.
The BPL appeal is expected to be resolved much more quickly.
— Douglas Rooks