If Maine voters approve a publicly owned power company to replace the two dominant utilities, they’ll hand over thousands of miles of transmission and distribution lines to an as-yet-unknown operator.

The Question 3 ballot measure on Nov. 7 would authorize a takeover of Central Maine Power Co. and Versant Power by Pine Tree Power, the name of the proposed public utility. The new utility’s board of elected and appointed officials would hire a third-party operator to run Maine’s transmission and distribution system.

Backers say they can hire a contractor to do the work of the two investor-owned utilities. Opponents are less certain.

“There are thousands of good people out there,” said John Clark, the retired general manager of Houlton Water Co., a municipally owned utility providing electricity, water and wastewater services to Houlton. “This isn’t rocket science.”

Mike Doyle, senior equity analyst for utilities at Edward Jones, said he’s not aware of any utility management operations running transmission and distribution at other utilities – one of the scenarios supporters of Question 3 present.

“Whether that happens in public power, I’m not aware of that,” he said. “I can’t think of an example of that (happening in the corporate world).”

The question of who will manage the grid in Maine lies at the foundation of the effort to ditch the state’s two investor-owned utilities. Arguments over management capabilities, credentials of overseers and, most especially, politics have made it a volatile discussion since the citizens’ initiative was filed.

The territory and assets at stake in the question are significant. Versant’s service area covers 10,400 square miles, its transmission lines snake across 1,265 miles, and its primary distribution lines extend across 6,300 miles. CMP operates 661,000 distribution structures, about 55,000 transmission structures, approximately 22,300 miles of distribution lines and 2,700 miles of transmission lines.

Maintenance of the network is a major issue. Forests cover about 90% of Maine, a larger share than in any other state, according to the U.S. Energy Information Administration, using 2021 data. The sweep of forests and intensity of winter weather with heavy snowfall and high winds often lead to extensive outages.

That means a third-party operator will have to have broad experience in line maintenance and repairs.

If approved by the voters, the new law will require Pine Tree Power to solicit bids to contract with one or more companies to operate the utility.

The third-party operator would be required to hire most non-executive CMP and Versant employees. The legislation requires awarding retention bonuses as an incentive to employees to stay with the new operator.

A FITNESS TEST

Also, the legislation establishes a fitness test for prospective operators, including customer satisfaction measures and outage response times, under which neither CMP nor Versant would be eligible to bid on managing the state’s T&D system. Pine Tree Power also would seek an operator that would place the needs of customers and workers – and align its policies with Maine’s climate goals – over shareholder returns.

“I understand Joe Purington would not be hanging around,” said Philip Shapiro, former board chairman of ISO-New England, the region’s grid operator, referring to CMP’s chief executive officer.

Shapiro is a Massachusetts resident who will not vote on the Maine ballot proposal. But he said whoever runs the transmission and distribution business must know Maine and its electric systems.

“The person showing up on Day 1 really has to know what they’re doing. And maybe they will,” he said.

Other transmission and distribution operators in New England include Boston-based Eversource; Unitil, headquartered in Hampton, New Hampshire; and London-based National Grid. Representatives at National Grid and Eversource declined to comment on whether they would consider bidding on Maine’s contract if Question 3 passes.

Spokesman Alec O’Meara said Unitil does not run transmission and distribution systems outside its corporate operations, “and that is not a business structure we are either considering or pursuing at this time.”

Unitil has natural gas operations in Maine, and its electric business is in New Hampshire and Massachusetts, O’Meara said.

Richard Silkman, CEO of Competitive Energy Services, a Portland energy management consulting company, said any power company in the U.S. could bid for the Pine Tree Power contract.

“Every utility has the capability to put together a management team,” he said. That team would then manage the existing CMP and Versant workforces.

Silkman, a supporter of the Pine Tree Power initiative, said a reason backers are looking to establish a publicly run utility is to replace “incompetent management.” Popular anger at the utilities helped fuel the drive to replace the companies, according to backers. CMP ranks poorly in customer service. It also botched a rollout of a new billing system in 2017, and it’s under fire from renewable energy advocates who accuse it of delaying large solar farm connections.

Seth Berry, a former Democratic state representative working to win passage of the Pine Tree Power proposal, said the winning bidder or bidders may be not-for-profit groups or individuals with management experience.

“We expect great interest, in part because these teams of professionals do not need to be backed by billionaires,” Berry said. “They only need to be one or more small teams of experienced, energetic professionals who are excited to live and work (or stay and work) in Maine, and are hungry to prove themselves.”

More than one operations team may be hired for different functions, such as billing and payroll or for different service areas, Berry said.

POLITICS AS USUAL

Willy Ritch, a Portland consultant heading up the anti-Question 3 campaign, said the political taint of the proposed 13-member board of Pine Tree Power could scare off possible contenders to run the transmission and distribution system.

“(Would they be) reluctant to operate a grid that has elections to be on the board?” he said.

In announcing her opposition Question 3 on Sept. 20, Gov. Janet Mills questioned the point of selecting an operator of Maine’s transmission and distribution systems while getting rid of the two utilities that serve 97% of Maine.

“And what would this governing board of politicians be in charge of?” Mills asked. “Well, they would be required to contract with an operator to run the transmission and utility’s assets. An operator that has ‘familiarity with the systems to be administered.’ So, somebody who looks a lot like CMP and Versant.

“So what we are really talking about here is adding a layer of bureaucracy and politics and partisanship over the existing structure of CMP and Versant, and I just don’t see how this improves anything,” the governor said.

Charlotte Warren, a former Democratic state legislator who opposes the public utility proposal, minimized Pine Tree Power’s status as a nonprofit. “We’ve heard a lot about how bad for-profit operators are. Pine Tree Power will be hiring a for-profit operator.”

BOARD CREDENTIALS QUESTIONED

Critics also have questioned the knowledge and experience of prospective Pine Tree Power board members, who would be expected to understand wholesale energy markets, infrastructure demands, regulatory and legislative requirements on the state and federal levels, and more.

The enabling legislation says the six appointed members of the board must have utilities and energy industry knowledge, but the seven elected members need only to geographically represent the state.

Warren also is a trustee of the Greater Augusta Utility District. She said at a recent League of Women Voters forum in Augusta that Question 3 provides no guarantee those elected to the board will have “any type of credential in running a grid, in knowing about electricity. ”

Shapiro, the former grid chair, questioned whether those elected to Pine Tree Power’s board of directors would be qualified to oversee a utility.

“It’s very naive. Why would you take this kind of a gamble?” he said.

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