BRUNSWICK — In a column on Sept. 11 (“Electric cars have one besetting problem: The cost of their fuel”), Tom Walsh claims Maine’s 1998 restructuring of our electricity industry has been a disaster for the state.

He’s wrong, for a lot of reasons. First, it’s important to know that almost identical legislation was passed in every other northeastern state – except Vermont – at around the same time, so if we were idiots, we had plenty of company.

Since 1998, when the law was passed, two things have happened: The restructuring was implemented and the price of electricity has gone up.

The question is whether the one had anything to do with the other. In other words, would electric rates in Maine be appreciably lower today had restructuring never taken place?

Well, let’s start by comparing the increase in electricity prices to another energy delivery system that is structured exactly the same way today that it was 30 years ago.

That system is gasoline for our cars. And everybody knows that gasoline today is almost triple what it was in 1998.

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The important point is that the increase in gasoline prices (which fuels our cars) and the parallel increase in the price of natural gas (which largely fuels our electricity production) has had the same result in both systems: increases in the prices we pay for gasoline or electricity, regardless of how the two delivery systems are set up.

In fact, in the first four or five years after restructuring, electricity rates in Maine actually did go down, just as we hoped and predicted they would.

Adjusted for inflation, overall electricity rates in Maine for the five years after restructuring were almost 15 percent below the price levels for the five years before the law went into effect.

But around 2006, the underlying cost of producing our electricity – no matter who was doing the producing – started to go up, and, not surprisingly, so did rates.

No matter how you structure the sale and delivery of bread, if the price of flour goes up, sooner or later so will the price of the bread.

The other major omission in Mr. Walsh’s analysis is a comparison of Maine’s electric rates to those of our neighbors up and down the East Coast.

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According to the most recent figures, Maine has the lowest overall electricity rates in New England (about 20 percent below the six-state average) and, significantly, almost 10 percent below the rates in Vermont, the only state in New England not to restructure its electric system.

We’re still high relative to the rest of the country, however, but why? The principal reason is that the major electricity source in most of the rest of the United States is coal – cheap, abundant and dirty.

Coal could be an option for us if being cheap was the only criteria, but I suspect most Maine people wouldn’t like the air quality and health problems that come with it.

I still believe in the principle which was the basis of  restructuring – that in the long run, competition is better for rate payers than monopoly –  but agree that it makes sense to look at how it has worked in practice and see if there are modifications which would make it work better.

If restructuring had the unintended consequence of increasing our reliance on natural gas, for example, it is unfortunate (in 20-20 hindsight), given the volatility in gas prices over the last five years.

On the other hand, we looked pretty good when gas prices were low and electric rates went down – which may be happening again right now.

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Reasonable people can differ on the ins and outs of this complicated subject and I have no problem with Mr. Walsh questioning my wisdom in supporting the restructuring bill 12 years ago.

What I do have a problem with is his suggestion that somehow my support for the bill was driven by a secret intention to go into the wind business nine years later to take advantage of regulations which weren’t even part of the law we passed. (Was that also the intention of the four other New England governors who signed similar laws at the same time? C’mon.)

The short answer is that I had no intention of getting into the wind or any other business when I left office.

I joined my friend Rob Gardiner to form Independence Wind in 2007 (nine years after the restructuring bill was passed) because we were both frustrated by the failure of several early wind projects in Maine.

We thought wind – clean, renewable, and price stable – could and should be a part of our energy future.

I may be a fool sometimes, but I have worked very hard my whole life to avoid being a knave, and I resent Mr. Walsh suggesting otherwise.


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