Gov. Janet Mills is preparing a bill designed to crack down on electric utility performance issues by using the threat of steep financial penalties or even a forced sale of assets to another company or a consumer-owned entity.

Her administration declined to discuss it Tuesday, but the proposal could have the effect of blunting interest in an ongoing campaign to replace Maine’s two investor-owned utilities with a consumer-owned power authority.

The bill hasn’t been filed, but the Portland Press Herald obtained a draft copy Tuesday.

Central Maine Power and Versant Power are not mentioned by name, but the legislation is clearly aimed at Maine’s two large transmission and distribution utilities. It would require the Public Utilities Commission to establish a quarterly performance report card with minimum standards. It would create a score with which to measure reliable service and other metrics including customer complaints, billing, storm restoration and interconnecting new energy generators such as solar farms.

A utility that fails to meet a standard for two consecutive quarters could be fined up to $1 million or 10 percent of annual revenue, with the money going to reduce energy costs for low-income customers.

A utility also would be required to submit a report to the PUC that compares actual costs with cost estimates used to set rates. If the PUC finds a difference of more than 10 percent between actual costs and the estimates, the agency can require an audit or disallow cost recovery in future rate cases.

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FORCED SALE POSSIBLE

The bill also would set up a formal process at the PUC around the potential for forcing a utility to sell all its Maine assets. The agency would determine whether an asset sale is warranted for a company that “consistently fails to meet the requirements” or “is unable to fulfill its statutory duties as a public utility because it is financially impaired.” 

If that determination were made, the PUC would consider proposals from qualified buyers or proposals to create a “consumer-owned quasi-municipal corporation to acquire the utility or its assets.”

A five-member committee, appointed by the governor and the state’s public advocate, would be set up to develop a proposal on behalf of a potential consumer-owned entity. In this way, the PUC could evaluate the merits of an investor-owned utility versus a consumer-owned one.

The bill also requires utilities to prepare a first-ever plan with the PUC for addressing expected impacts of climate change, such as more severe storms and flooding. It also would strengthen whistleblower provisions, such as protecting utility employees from retaliation if they provide information to the PUC or Legislature.

The bill is being prepared because Mills is concerned that Maine doesn’t have the right tools to hold utilities accountable and assure ratepayers have safe, reliable service, said Dan Burgess, who heads the Governor’s Energy Office.

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“That is why she is preparing to introduce bipartisan legislation to establish standards for improved utility service and impose enhanced penalties for failure to meet those standards,” Burgess said, “all with the goal of improving Maine’s ability to hold our utilities accountable.”

CMP has been briefed on details of the bill. In a statement Tuesday, the company said the PUC already has the necessary authority to protect customer interests.

“CMP is committed to our customers by investing in our system to improve reliability, responding quickly and safely to storms, and continuing to offer the highest level of customer service,” the company said. “We hold ourselves accountable and measure our performance in these areas daily.”

CONSUMER POWER ALTERNATIVE?

Word of the governor’s proposal comes two weeks after the campaign promoting a consumer-owned electric utility in Maine acknowledged that it wasn’t able to gather enough signatures for a ballot initiative in 2022 and will continue to collect names for a 2023 attempt.

Our Power, the group promoting the campaign, blamed the impact of the pandemic, winter weather and millions of dollars in opposition spending by CMP’s parent company for coming up short last year.

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Our Power said it had collected nearly three-quarters of the roughly 63,000 required signatures within three months.

Critics have been working since 2019 on efforts to replace Maine’s two investor-owned utilities with a nonprofit, consumer-owned company. They have been promoting Pine Tree Power, a proposed utility that would be run by a board elected by Mainers and managed by a private-sector operator. It would issue debt against future revenues to purchase the assets of CMP and Versant. How much that debt would impact rates, and for how long, is under debate.

Pine Tree Power is being promoted as an antidote to the high costs and reliability problems plaguing CMP and Versant, according to supporters. They began collecting signatures last summer after Mills vetoed a bill that would have teed up a similar referendum question. It was the second time such a bill failed to make it out of the Legislature.

Now, the proposal being readied by Mills may present a competing alternative for lawmakers.

A co-chair on the committee that handles energy matters said Tuesday that he was approached to co-sponsor the measure, and that attempts are being made to line up broad support from both Democratic and Republican leadership.

“I think it’s a very serious effort on behalf of the governor’s office to deal with the problems we’ve seen with electric utilities in Maine,” said Sen. Mark Lawrence, D-York. “It’s an attempt to get a global solution, a bipartisan solution, to the issues.”

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Asked if the proposed law could blunt the consumer-owned power campaign by presenting a less-divisive alternative, Lawrence said he didn’t think it was intended that way. But it might address a lot of the issues raised by critics, he added.

“The time has come to take some serious steps in terms of utility accountability,” Lawrence said.

The bill also won support from a key lawmaker, Rep. Seth Berry, D-Bowdoinham. A staunch CMP critic and a prime force behind the consumer-owned power movement in Maine, Berry said that he planned to co-sponsor the bill.

“Is this the bill I would have written? Of course not,” Berry said in an email Tuesday night. “But every transformative undertaking begins with a single step forward.”

The PUC is charged with regulating utilities, but many of its statutes are outdated, said Tony Buxton, a lawyer who represents industrial energy consumers. The agency has never held a proceeding to consider revoking the franchise of an electric utility, he said. Perhaps the harshest measure was meted out two years ago when the agency imposed a record, $10 million penalty against CMP for its mishandling of billing issues.

To electrify Maine’s economy and phase out fossil fuels, Buxton said, Maine will need strong, capable utility service.

“We can’t solve climate problems unless we have a strong utility,” he said. “I don’t know if the steps (in the bill) will be enough.”

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