Maine regulators on Wednesday accused Versant Power of dragging out a state-ordered audit over rate increases and other unspecified concerns and threatened the utility with the possibility of financial penalties and a contempt citation to force it to cooperate.  

“Rather than consistently paying audit invoices in a timely manner as required, Versant has raised questions about the cost of the audit,” Public Utilities Commission Chairman Philip L. Bartlett II said.

Versant has paid the consulting firm performing the audit $554,025, which is $144,025 more than the original contract price, the utility told the PUC in a Feb. 14 letter. Ratepayers will pay for the audit unless the PUC disallows some or all of the costs and shifts them to Versant.

Bartlett partly blamed the escalating price on Versant, which serves 165,000 customers in northern and eastern Maine.

“In this case it appears that the costs of the audit have increased beyond original expectations in significant part because of Versant’s conduct disputing and delaying responses to the auditors’ information requests as well as due to the scale and scope of the issues uncovered,” he said at the PUC meeting.

Versant spokeswoman Judy Long said in an emailed statement that the utility has “worked diligently” to answer 369 requests for data with 887 questions, including numerous duplicative requests. The utility also made 26 staff members available for interviews and answered 141 additional pre-interview questions, she said.

“As a relatively small, rural utility with a limited number of staff sharing overlapping responsibilities, we have worked extremely hard to balance the requirements of this audit with our day-to-day responsibilities to our customers, employees, regulators, policymakers and other stakeholders,” Long said.

Versant’s request to clarify the terms of a contract for which customers are responsible was a “prudent, reasonable request and was made weeks before payment was due,” she said.

Versant told the PUC in its Feb. 14 letter that it hopes regulators will provide clarity about how to amend the fixed price contract, the basis for paying more for the “originally agreed upon and contracted scope of work” and confirmation from the PUC that the costs were appropriately incurred and that the invoice should be paid.

Bartlett said failing to pay invoices “seems to follow a reluctance to cooperate with the audit.” Such “questionable management decisions” may require more regulatory proceedings, he said.

“Versant’s failure to comply with the commission’s directives is inexplicable and could subject the company to administrative penalties … or to a finding of contempt,” Bartlett said. The extent of financial penalties and sanctions would be determined in hearings.

Bartlett and Commissioners Patrick Scully and Carolyn Gilbert ordered Versant to pay the invoices by Feb. 28.

The PUC last May ordered the audit of the state’s second-largest electric utility, citing unspecified “questions and concerns” related to rate increases and other actions. It cited four cases before the agency, including two for distribution rate increases that Versant says are needed to improve service and bolster operations.

The other two cases the PUC cited were Versant’s request in 2019 to reorganize with its new parent company, Enmax, a Canadian energy company, and another that resulted in reliability benchmarks that tie electric rates to the quality of service provided.

Regulators will use the audit to examine the effectiveness of Versant’s senior management and its board of directors in managing operations, customer service, credit and collection, metering, billing and the management of its transmission and distribution system.