As a former energy lawyer, I have serious concerns about Question 3, which calls for the taking of private property from Central Maine Power and Versant Power to create a public power authority. The Sierra Club’s endorsement of Question 3 is another in a long series of empty promises and virtue signaling. In making the endorsement, Executive Director Ben Jealous said, “A win in Maine would allow for a quicker, more just expansion of the state’s electric grid, all while saving ratepayers billions of dollars and advancing the state’s climate and economic justice goals.” Never have bigger promises been made on fewer facts. The actual experience of eminent domain and public power shows delay, cost increases and diversion from addressing climate change.
First, “quicker”? The history of eminent domain cases suggests litigation could easily run five to 10 years before resolution. The Rangeley Water District acquisition of the Rangeley Water Co. took five years – and less than $500,000 was in dispute! CMP and Versant likely will claim $13 billion in compensation. The only winners will be the lawyers in what is likely to be years-long litigation. The litigation will be preceded by at least a couple of years for election of the board of directors, the creation of new management and the development of a purchase price. All of which suggests that instead of spending the next decade addressing climate change, we will be mired in litigation over the sale price.
In another example, Boulder, Colorado, abandoned efforts to acquire their local public utility after 10 years and $29 million, time and money devoted to litigation instead of to improving the response to climate change. Former Mayor Will Toor regrets the wasted time and money and said, “Our existential crisis is climate change, not business models.”
The second “promise” – “saving ratepayers billions of dollars” – is wholly without merit. Electric bills will include the cost of borrowing upward of $13 billion, the cost to acquire the property. But we don’t know the acquisition cost until the completion of the eminent domain case. It is far more likely, as confirmed by the Maine Public Utilities Commission consultant, London Economics, that costs will rise for customers for at least 10 years after acquisition, and perhaps longer. Maine voters are being asked to approve a purchase without knowing the sales price. Would you buy a car if the dealer informed you that you will be told the price in five to 10 years’ time?
Because the referendum puts management of the electric utility into the hands of a popularly elected board of directors, politicians who are not required to have any expertise or experience, the referendum requires that the public power authority contract out the management of the utility to a third-party contractor. In 2020, London Economics estimated the cost of a private contractor would be $82 million a year! Given inflation, that number today is $148.5 million in additional costs. No savings here!
Finally, what is the support for “a just expansion of the electric grid” and “advancing the state’s climate and economic justice goals”? Nebraska, the only state in the nation with statewide public power, has one of the heaviest reliance on dirty carbon energy in the nation. In 2022, Nebraska obtained 49% of its electric energy from coal, while its neighbor, Iowa, served by investor-owned utilities, obtained 62% of its electricity from clean wind power. Being publicly owned is no guarantee of a commitment to clean energy. In fact, it may well be the opposite as evidenced by Nebraska, where big money interests are increasingly involved in the election of the Nebraska Public Power Board of Directors.
The bottom line, if Question 3 passes, is increased costs, protracted litigation and efforts devoted to electioneering, instead of developing a power grid that will support the increased electrification of all sectors of energy use. I will be voting “no.”
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