AUGUSTA — Legislators caught in the middle of a feud between the city of Augusta and Central Maine Power Co. over where utilities should pay excise taxes will leave the controversial issue for a study committee and the next Legislature to decide.

A proposed law change backed by CMP that could cost the city of Augusta $200,000 a year in excise tax revenue paid by CMP to Augusta was left unresolved by a legislative committee Friday.

Additional Photos

Rows of vehicles were parked recently at Central Maine Power’s Augusta Service building on Old Winthrop Road. A legislative committee on Friday voted to study the issue of whether the company should continue to be required to pay excise taxes on its fleet only to Augusta, or whether other cities and towns should get tax revenue as well. Joe Phelan/Kennebec Journal

The Legislature’s Taxation Committee voted only to order that a study committee be formed to look into the potential impact of the bill on public utility ratepayers, and make a recommendation for the next state Legislature to consider.

“I would probably be willing to sit down and make a decision right now, except I feel like we’ve been dragged into a feud between two folks I don’t deserve to be in between,” said independent Rep. Joseph Brooks of Winterport. “I’ve been dragged back and forth across the hall so many times there are probably skid marks out there. I don’t feel we should be involved in a feud whatsoever.”

The bill would require utilities to pay excise taxes where their vehicles are garaged, not where the company is headquartered. As it is now, CMP pays about $300,000 a year in excise tax to the city of Augusta on nearly 500 company vehicles. City officials estimate if the bill passes, the city would lose $200,000 a year in those excise revenues now paid by CMP because vehicles are parked in other communities as well, including Fairfield, Farmington and Portland.

ROOTS OF THE FIGHT

Rep. Lance Harvell, R-Farmington, said he sponsored the bill because municipalities such as Farmington, where CMP keeps about 20 vehicles, should get the excise taxes on vehicles that drive on local roads.

In written testimony, Joel Harrington, manager of government and community relations for CMP, said the electric utility has 490 vehicles and, if the bill passes, would pay excise taxes on 114 vehicles in Augusta, 97 in Portland, 46 in Lewiston, 35 in Fairfield, 34 in Brunswick, 29 in Alfred, 24 in Rockland, 21 in Farmington, 21 in Bridgton, 19 in Skowhegan, 18 in Dover-Foxcroft, 14 in Belfast and eight in Rumford.

Sen. Anne Haskell, D-Portland, co-chairwoman of the committee, said forming a study committee would allow time for the potential impact of the proposed law change to be considered. She also noted the Public Utilities Commission recently received a formal, 10-person complaint related to the legislation, filed by the city of Augusta’s attorney, which the commission is investigating. She said she doesn’t feel she has time to make an informed decision on the bill, which was submitted late and after deadline this legislative session.

Stephen Langsdorf, Augusta’s city attorney, filed the complaint last week with the commission, alleging CMP improperly used company resources to wage its battle of retribution against the city on behalf of its partner company, Maine Natural Gas.

Mayor William Stokes has said CMP’s motivation for backing the bill was to penalize Augusta for how the city treated Maine Natural Gas last year when Augusta sought proposals from companies to provide natural gas to city and school facilities. CMP and Maine Natural Gas are both owned by Iberdrola USA.

The city selected competitor Summit Natural Gas as a gas provider after Maine Natural Gas withdrew its proposal because the city allowed Summit to change its prices after the bids were submitted. Stokes said both Summit and Maine Natural Gas were given opportunities to change their bids.

A CMP lobbyist told the Taxation Committee at a public hearing last week the company backs the change because it would distribute CMP’s excise tax payments more fairly to the municipalities where those vehicles spend the most time on local roads.

FEUD AS A SIDESHOW

Sen. Doug Thomas, R-Ripley, expressed frustration that the bill he considers to be a more fair way of charging excise taxes was sidetracked by the flap between Augusta and CMP, which is one of the city’s largest employers and taxpayers.

“It seems to me this so-called feud is a sideshow, and has nothing to do with the policy,” Thomas said. “The policy ought to be the same for public utilities as it is for every other corporation in Maine. You excise vehicles in the town where they are garaged. But we’re going to take a pass and let Augusta collect the taxes on vehicles garaged in these other towns, where the excise should be going.”

Thomas made a motion to pass the bill, but put off implementation until 2016, to give municipal leaders whose revenues would be impacted by the change time to prepare for it. His motion failed to win a second.

John Carroll, a spokesman for Iberdrola USA, said after Friday’s work session the company is encouraged committee members recognize the way the law is written now is a fairness issue, with many communities not getting the benefits of excise taxes paid by utility’s vehicles driven on their local roads.

Carroll said holding the issue over to be decided by the next Legislature “was probably an appropriate choice.” That appears to be at least one thing CMP and city officials agree on.

Stokes also said Friday holding the bill over for more study was the prudent thing to do.

“This is a bill put into the short session that has implications for a lot of different municipalities, not just Augusta, and for a lot of utilities and ratepayers,” Stokes said. “It probably needs to be looked at more thoroughly, without the pressure of a short session.”

Augusta officials have said utilities pay excise taxes for their vehicles statewide in one location because having to pay them in each municipality where they are located would cost more money, and that cost would be passed on to ratepayers.

Companies other than regulated public utilities pay excise taxes to the municipality where their vehicles are kept if they have a permanent place of business there.

Keith Edwards can be contacted at 621-5647 or at:

kedwards@centralmaine.com

Twitter: @kedwardskj

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