The Portland Phoenix

News Analysis: Energy titans battle over lucrative Maine market for renewables

After six cacophonous months, a referendum campaign to kill the Central Maine Power Co. transmission line that would carry Quebec hydropower to Massachusetts came to a sudden end when the Maine Supreme Judicial Court on Aug. 13 ruled the attempt unconstitutional and struck it from the ballot.

That’s something the high court had never done since “referendum politics,” spurred by frequent initiatives, began in the 1970s.

All that spending – $17 million opposing the referendum, mostly from CMP and Hydro Quebec, and $6 million supporting it, dumped in just a month earlier by two Texas natural gas companies, Calpine and Vistra – went for naught. The most expensive referendum campaign in Maine history didn’t even reach the voters targeted by all those ads.

The reasoning behind the court’s unanimous decision in Avangrid Networks v. Secretary of State was startlingly simple. While the ruling has been described as “narrow,” it was in fact a sweeping repudiation of a measure that attempted to reverse a Public Utilities Commission decision without proposing any actual legislation – something ballot initiatives must do.

The court also ruled that, by ordering a quasi-judicial, independent agency like the PUC to reverse a lawful decision, the referendum also violated the separation of powers between the legislative and executive branches. But it was the lack of any proposed change in Maine statutes that made it unconstitutional on its face.

An overview of the New England Clean Energy Connect project in Maine. (Courtesy NECEC)

This point was first brought to public attention by Orlando DeLogu, a retired University of Maine law professor, in a letter to the Portland Press Herald on Feb. 17. He wrote that “the 10-line initiative does not create new legislation affecting power line location, construction, maintenance, etc. Nor does it appeal any measure ‘passed by the Legislature.’ Instead, it directs the Public Utilities Commission … to reverse an order conditionally permitting the power line.”

DeLogu went on to observe, “The initiators were no doubt disappointed, but if they felt the PUC’s process/order was invalid … they could have appealed to the court.”

In fact, this is exactly what the “initiators” had already done. Although the final case involved Avangrid (CMP) appealing Secretary of State Matt Dunlap’s ruling, an earlier case, filed in November 2019, asked the high court to overturn the PUC ruling.

The plaintiff was NextEra Energy Resources – a name unfamiliar to most Mainers. NextEra is part of a holding company created by Florida Power & Light, the nation’s largest electric utility, serving 5 million customers.

NextEra, founded in 1984, has 14,800 employees and annual revenues of $17 billion. The company is one of the largest builders of new energy plants, including natural gas, wind, and solar, and owns several projects in Maine, including two natural gas plants.

Meanwhile, CMP, while much smaller, with 600,000 customers, is owned by Iberdrola, the Spanish utility giant, which has 34,000 employees and revenues of $43 billion. Avangrid, its North American construction subsidiary, has 6,600 employees and $6.3 billion in revenues.

Under the plan approved by the PUC and numerous other agencies, Avangrid will build the line to Canada and CMP will operate it as part of the ISO New England system.

Looked at this way, the entire referendum appears more as a battle among corporate energy titans than a debate about the virtues, or lack of them, of hydropower produced in Canada, wheeled through Maine, and consumed in Massachusetts.

The other big player is Hydro Quebec, a publicly owned but notoriously secretive utility that dominates the Canadian power markets, which will now have a major stake in New York, and New England; the New England Clean Energy Connect line will add 1,200 megawatts to the grid. By comparison, the Maine Yankee nuclear plant (the state’s largest power producer when it was shut down in 1996) contributed 860 megawatts.

Hydro Quebec and NextEra were major bidders for the Massachusetts Department of Public Utilities contract that went to Hydro Quebec in 2018, and finally awarded in June 2019.

NextEra did not go quietly.

DPU regulatory proceedings show the two companies going head to head every step of the way. NextEra attacked the contract award from every possible angle, and through dozens of pages of documents, NextEra lawyers make assertions, and Hydro Quebec lawyers respond. The name “NextEra” appears no less than 161 times in one proceeding.

After failing to convince Massachusetts regulators to overturn the contract, NextEra set its sights on Maine.

The original contract envisioned the line to Canada proceeding through New Hampshire in the “Northern Pass” project proposed by Eversource, yet another utility giant based in Springfield, Mass. But New Hampshire turned down the project in 2018, a possibility the DPU had clearly envisioned; Maine and CMP was listed as the backup.

The issue was cost: Northern Pass bore a price tag of $800 million, while the Maine project will cost $1 billion. A third alternative – not chosen – was an underground line through Vermont for about $1.6 billion.

Having filed its court case in November 2019, NextEra struck out with a direct appeal of the PUC decision to the Supreme Judicial Court. In its March 17 decision – one of the last in which former Chief Justice Leigh Saufley participated – a unanimous court upheld the PUC decision: “The Commission followed the proper procedures and there is sufficient evidence in the record to support the findings it made.”

Simultaneously, the referendum campaign followed its own track. The signature-gathering effort was announced in November, and in March organizers held a news conference, saying they had enough signatures – later confirmed by the secretary of state’s office.

Even though the referendum is now dead, in another legal twist, its opponents nearly missed their opportunity to strike it from the ballot when Portland’s Pierce Atwood, the law firm representing Avangrid, pursued a curious legal strategy that almost lost the case for its client. Rather than attempt to strike down the referendum, Pierce Atwood decided to sue the secretary of state over the certification of ballot signatures – something that almost never works.

The Supreme Court then upheld a Superior Court finding that Dunlap had acted properly, leaving precious little time to pursue the issue on constitutional grounds. Only because the case had been remanded to the lower court, so the ruling was not yet final, was Pierce Atwood able to get in the door for a second attempt.

When it did, it was joined by a large mound of supporting briefs, from players across the legal and political spectrum.

The court’s decision is now reverberating in terms of both law and public policy. What comes next?

Undoubtedly, the next secretary of state replacing the term-limited Dunlap will be more careful about approving proposed initiatives for signature gathering. But the battles over renewable energy are just beginning.

Maine’s 2019 law calls for the state to double its supply of renewable energy over the next decade, and to be 100 percent renewable by 2050. That means lots and lots of big contracts.

Avangrid and Eversource, NextEra and Hydro Quebec, and many more will be back, fighting for market share. There may not be another referendum, but if there is, it will undoubtedly take a more subtle and sophisticated form than the one the Supreme Court struck down. 

Douglas Rooks has covered Maine issues for 35 years as a reporter, editorial writer, columnist, and former editor of Maine Times.

Dmitry Bam, professor and former interim dean of the UMaine School of Law.

History lessons, and more

Avangrid’s lawsuit to block the Clean Energy Connect referendum produced an outpouring of legal filings, with no fewer than six original briefs, five reply briefs, and four filed amicus curiae, or as “friends of the court.”

Two amicus petitions came from attorneys writing on their own behalf – Dmitri Bam, former interim dean of the University of Maine School of Law, and Orlando DeLogu, the first to publicly question the referendum’s constitutionality, back in February.

Bam wrote an impressive essay on separation of powers, following one he authored three years earlier arguing for the full constitutionality of the ranked-choice voting system that is now part of Maine elections. The Supreme Judicial Court, however, later struck out the critical sections of the law applying to the November state elections for governor and the Legislature.

Bam took note of that proceeding while addressing the justices in Avangrid, writing, “In my teaching and scholarship, I have been an emphatic supporter of direct democracy and the right of the people to self-govern. But as a constitutional scholar, I believe strongly in the concept of separation of powers, and ensuring that the independence of all three branches is protected.”

DeLogu, in a mere 13 pages, took on the lack of a proposed law within the referendum. He concluded, “The 135-word initiative before this court is not a piece of legislation. There is nothing for the Legislature to consider, nothing to legally enact, or to amend, and thus nothing for the ‘electors’/voters to vote on.”

A brief prepared by Bangor attorney Tim Woodcock on behalf of two former members of the Legislature’s Energy and Utilities Committee, Portland’s Mark Dion and Ken Fletcher of Winslow, provides a tour of American history and arguments among the U.S. Constitution’s framers, with excursions through the writings of James Madison, Thomas Jefferson, and scholars of the period.

Finally, three former members of the Public Utilities Commission, including one of its longest-serving, Thomas Welch, weighed in to defend the PUC’s integrity. In their conclusion, they wrote, “The purportedly legislative act of the initiative at issue here is designed to force the commission to contradict its own record-supported findings, and … will thus undermine the essential purpose and value of the commission.” 

— Douglas Rooks

Saufley (Portland Phoenix/Jim Neuger)

A court without a chief

For the first time in its history, the Maine Supreme Judicial Court decided a major constitutional case – Avangrid Networks v. Secretary of State – without a chief justice.

Chief Justice Leigh Saufley stepped down April 14 to become dean of the University of Maine School of Law, and in the 4 1/2 months since then, Gov. Janet Mills has given no indication of when she might nominate a successor.

The Senate met on Monday, Aug. 24, for the first time since the onset of the pandemic to vote on several nominations – including three seats on the Maine Ethics Commission, which ensures that the panel will be fully functioning for the November election cycle (unlike the Federal Election Commission, which lacks a quorum and cannot conduct business).

Among the nominees is the crucial independent commissioner, Dennis Marble of Hampden, nominated for a long-vacant seat that can hold the balance when the two Republican and two Democratic-appointed commissioners cannot agree.

But there will be no nominee for chief justice.

Before this, the longest period when the court lacked a chief was two months and two days, after Dan Wathen stepped down on Oct. 4, 2001, to run briefly for governor, and Gov. Angus King nominated Saufley to succeed him; she was confirmed on Dec. 6, 2001.

Traditionally, chief justices were sworn in the same day their predecessors retired, with some exceptions, usually when a chief justice died in office.

Sen. Mike Carpenter, D-Houlton, who co-chairs the Judiciary Committee that would consider the chief justice nominee, said he has had “a few conversations with the governor’s office, but nothing definite.” He added, “I don’t know how they’re doing the search, but I’m sure they will find the right person.”

Mills spokeswoman Lindsay Crete released this statement when asked about the governor’s position on the nomination process: “The Governor takes seriously her responsibility to nominate experienced and qualified individuals with sharp intellects, a wealth of legal knowledge, and measured temperaments who will administer justice faithfully and equally. Gov. Mills continues to work closely with her Judicial Advisory Committee to evaluate individuals for this important position and nominate a candidate with these qualities.” 

— Douglas Rooks

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