Jim Fossel: Pine Tree Power is a risky scheme with disastrous potential

They are so numerous that it would be easy, from now until Election Day, to write every week about the problems with the utility takeover scheme labeled Pine Tree Power. I’d run out of time and column inches long before I’d run out of problems to dissect.

For today, I’ll focus on a few obvious problems that should be readily apparent to anyone who takes a moment to think it all over.

The foremost presumption made by proponents of Pine Tree Power is that changing the ownership and management structure of our utilities would be an improvement. To examine this, let’s take a look at a different scenario: What if Iberdrola decided to sell Avangrid, or just Central Maine Power? Maybe there’s no reason to think they’d do that, but if they did, what would your initial reaction be? If you’re one of the many people who’s been disappointed with CMP over the years, it might be understandable if you’d celebrate. After all, change could improve things.

The problem is that there are no guarantees in life. If CMP or Versant Power changed hands, everything they’re doing wrong right now could get worse. If that were the case with selling the company privately, one has to consider it a possibility with the selling of the company to Pine Tree Power. Indeed, that’s even more of a shot in the dark; if the utilities were sold to another private company, we’d at least have a track record one could research.

Pine Tree Power doesn’t have one because it doesn’t yet exist.

Pine Tree Power supporters might cite analysis showing publicly owned utilities performing better than privately owned ones, but that wouldn’t necessarily be the case here. It would be just like some random billionaire buying the company you work for; it might be better, it might be worse. Until it happens, there’s no way to know. Just ask the employees of Twitter.

Moreover, there are reasons to be skeptical of the proposed ownership structure of Pine Tree Power. Unlike most state boards, there wouldn’t be any guaranteed bipartisan balance: Seven of the 13 board members would be elected; the rest would be expert members appointed by the elected members. That might sound balanced, but it’s not: It’s circuitous and self-serving, with the power of the board truly resting with the elected members. Those elected members wouldn’t have to know anything about utility policy, either, one of the more complex areas of public policy that government addresses. Indeed, they wouldn’t even have to know how to screw in a lightbulb. They’d just have to win an election.

They’d represent truly massive districts, too, equivalent in size to five Maine Senate districts. So, although they might be elected, it would be from large districts with a long, six-year term in office. All of that combined means that the concept of Pine Tree Power being answerable to and owned by the people, rather than by shareholders, is more of a marketing gimmick than a reality.

While it’s a nice slogan, entrusting politicians to run our electric utilities makes about as much sense as an NFL team letting fans choose the plays instead of a head coach. Sure, it might be more entertaining – there wouldn’t be any field goals – but it probably wouldn’t be a great formula for a Super Bowl appearance. Do we really want to trust people to run our electric utilities just because they won a popularity contest? Is that a sure-fire way to create a more efficient, more effective utility? Or a risky scheme with the potential for even greater disaster?

The problems with Central Maine Power and Versant aren’t solely because of the owners and ownership structure, it’s because they don’t operate in a competitive environment like other private companies. That’s why the utility industry is so tightly regulated by government at all levels: It isn’t checked by consumer choice. Changing the owners will never change that fundamental fact.

The supporters of Pine Tree Power can’t guarantee that their proposal would fix any of our problems. They can’t guarantee they’d lower costs, respond to storms better or help the transition away from fossil fuels. What they can promise is a lengthy legal battle that could cost taxpayers millions. Rather than taking that costly, risky and perhaps fruitless step, we need to work hard to ensure that regulators hold our utilities accountable. It may not be the flashiest answer, but it’s both affordable and realistic.

Jim Fossel, a conservative activist from Gardiner, worked for Sen. Susan Collins. He can be contacted at:
jwfossel@gmail.com
Twitter: @jimfossel