Consumer advocates urged state regulators Thursday to implement strict standards as they develop a system for rating the state’s electric utilities on the quality of their service.

After some high-profile problems in recent years, from billing to restoring electric service after storms, the Maine Public Utilities Commission is developing the standards to regularly measure how well the utilities conduct their business. Those report cards would give the PUC a way to assess how the companies are doing beyond the reviews conducted when utilities seek rate increases, and to impose financial penalties if they fall short.

The PUC, which held a public hearing on the rating system Thursday, is still formulating the standards and also weighing whether the investor-owned utilities in the state – Central Maine Power Co. and Versant Power – and smaller, consumer-owned power systems would be held to the same standards. The report cards are expected to assess a wide range of utility operations, from customer service to how well the companies respond to power failures.

At a public hearing Thursday, a spokeswoman for AARP urged Maine regulators to look at what some other states have done in developing their own systems for reviewing utilities’ performance.

Barbara Alexander, a consultant for the organization, noted that Maine is still weighing how to rate the utilities for their ability to restore power after storms hit and whether the response to particularly severe storms might be exempted from review. She noted that Maryland has a sliding scale for measuring its utilities’ reconnection times based on the severity of storms, and she urged Maine to consider a similar system.

Phelps Turner, a lawyer with the Conservation Law Foundation, suggested that the PUC review past performance of the utilities as they start the reviews and also that Maine’s electric companies be compared with similar utilities in other states.

The standards under consideration, he said, “fall well short of what’s needed” to make sure that CMP and Versant are providing clean and reliable electric service, adding that the PUC needs to consider measures that could force the utilities to reduce their greenhouse gas emissions and meet other environmental yardsticks.

In their statements to the PUC, representatives of the utilities said that by and large, they don’t object to most of the standards the PUC is developing, although they urged regulators to consider unintended consequences of some of their actions.

For instance, Arielle Silver Karsh, a lawyer for Versant, said some of the measures for response times to customer calls could force the utility to outsource that work to large, out-of-state call centers. Versant’s customers, she said, prefer to deal with a local call center where the workers know the territory and the issues that their customers face.

And both Versant and CMP asked the PUC to consider a rating system that’s not merely focused on penalizing utilities if their performance falls short. The PUC should also think about ways to reward the utilities if they go above and beyond in trying to improve service, they said.

“All stick and no carrot is just not good public policy,” Richard Hevey, a lawyer for CMP, told the commission.

But Public Advocate William Harwood said the public is in no mood to see utilities rewarded for doing what they are supposed to be doing.

“They don’t need that additional incentive,” Harwood said, “a stick is plenty of incentive.”

Holding electric utilities accountable by measuring the quality of their service is not a new idea. Both CMP and Versant Power have operated under so-called service-quality indexes, with metrics such as reliability and customer inquiry response times measured and subject to financial consequences.

But the issue has come into sharper focus in recent years, reflecting the frustration felt by some customers and politicians about the status quo.

One response has been movement to replace the state’s two investor-owned utilities with a consumer-owned distribution company. A campaign to put the issue before voters fell short last year, but organizers continue to collect signatures with the aim of securing a ballot initiative in 2023.

Also in play is a proposal from Gov. Janet Mills to crack down on subpar electric utility performance by using the threat of steep financial penalties or even a forced sale of assets to another company or a consumer-owned entity. That bill remains before lawmakers, but its fate is uncertain after a legislative committee last month couldn’t agree on the details.

Thursday’s hearing at the PUC stems from a line of inquiry that began in 2020. After feedback from both investor and consumer-owned utilities, clean energy interests and the Office of Public Advocate, the process led to a rulemaking proposal that could modify the existing performance standards and mandate reporting requirements for customers. The PUC is considering changes in seven general areas – service reliability, quality and storm restoration; customer service; field services; affordability and cost control; distributed energy resources and interconnection; grid modernization, and energy and environmental policies.

Based on written comments, the PUC found that most stakeholders support the development of some form of metrics to measure and create incentives for utility performance. The exceptions were Maine’s small consumer-owned utilities, such as Houlton Water Co. and Eastern Maine Electric Cooperative. They said their size, customer ownership and self-governance would make some of the requirements burdensome and not useful.

The Office of Public Advocate, however, said some level of  reporting on customer satisfaction, billing and service interruptions should be required of small consumer-owned companies, to provide safeguards for all utility customers. It also said overlapping issues in both the PUC’s proposed rules and Mills’ accountability bill might require a new public hearing to address specifics in the bill, if it becomes law.

The public advocate also took note that the PUC’s proposals didn’t include financial penalties for failures to meet the new benchmarks.

“Nevertheless,” the public advocate said, “the OPA wishes to state our position that persistent and substantial failure to satisfy these minimum standards should result in penalties.”

The PUC will continue to take written comments on the issue until late this month and then move onto considering what measures to implement and how to operate the system.

Staff Writer Tux Turkel contributed to this story.

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