AUGUSTA — Augusta Mayor William Stokes told lawmakers Monday there’s no question in his mind that Central Maine Power Co. is backing a bill to change where the company registers hundreds of vehicles to punish the city for the way it handled a natural gas contract.
“I did receive a call from the president of CMP myself, and it was not a pleasant conversation,” Stokes told members of the Taxation Committee. “So I have my view as to why this bill is before you now.”
After some discussion, legislators tabled the bill that prompted a dispute between the city of Augusta and CMP officials that would cost the city about $200,000 a year in lost excise tax revenue. The legislation, which is backed by Augusta-based CMP, would require utilities to pay excise taxes where their vehicles are located, not where the company is headquartered. As it is now, CMP pays about $300,000 a year in excise tax to the city of Augusta on nearly 500 company vehicles.
Sen. Doug Thomas, R-Ripley, took umbrage at Stokes’ contention that the city knows what motivated CMP to change its position and support the bill it opposed three years ago.
“I get upset when people assign motives to others,” Thomas said. “I’m not going to look at motives. I’m going to look at the fairness of the policy. I’m insulted that educated, reasonable people would try to influence us (by speaking about someone else’s) motives when they have no way of knowing what they are. I’m insulted.”
Rep. L. Gary Knight, R-Livermore Falls, said he thinks the bill is before the committee for political, not policy reasons, but said he “didn’t want to get caught up in the fight between the two entities here.”
Knight said, putting politics aside, he thinks the bill proposes a fairer way of utilities paying excise taxes, by having them paid where vehicles are kept. He said when the law was put in place decades ago, it could cost utilities a substantial amount of money to pay excise taxes on vehicles at municipal offices across the state, and those costs would be passed on to ratepayers. However, he said, technological advances have lowered those costs to the point it is no longer necessary to have utilities pay all their excise taxes in one location if their vehicles are spread across the state. He said he’s leaning toward supporting the bill.
Stokes said CMP’s motivation for backing the bill was to penalize Augusta for how the city treated Maine Natural Gas last year when Augusta sought proposals from companies to provide natural gas to city and school facilities. CMP and Maine Natural Gas are both owned by Iberdrola USA.
The city selected Summit Natural Gas as a gas provider after Maine Natural Gas withdrew its proposal because the city allowed Summit to change its prices after the bids were submitted. Stokes said both Summit and Maine Natural Gas were given opportunities to change their bids.
Stokes said even before the bid process, CMP President Sara Burns personally called him to urge the city strongly not to procure natural gas through a public bid process and, instead, to give the contract to Maine Natural Gas. He said that call is one reason he’s convinced CMP is backing the excise tax change, which company officials testified against in 2011, in an effort to get back at city officials by paying much of its excise taxes elsewhere.
A CMP lobbyist told the Taxation Committee at a public hearing last week the company backs the change because it would distribute CMP’s excise tax payments more fairly to the municipalities where those vehicles spend the most time on local roads.
Stokes said utilities pay excise taxes for their vehicles statewide in one location because having to pay them in each municipality where they are located would cost more money, and that cost would be passed on to ratepayers.
Private utilities pay excise taxes to the municipality where their vehicles are kept if they have a permanent place of business there.
Sponsor Rep. Lance Harvell, R-Farmington, said he was asked to sponsor the bill by a CMP lobbyist. He said he sponsored it because municipalities such as Farmington, where CMP keeps about 20 vehicles, should get the excise taxes on vehicles that drive on local roads.
Joel Harrington, manager of government and community relations for CMP, said last week the proposed law change would bring tax equity to the more than a dozen communities across the state where CMP keeps vehicles. He said the tax revenue would go properly to the municipalities where CMP vehicles contribute to the wear and tear on local roads.
Stephen Langsdorf, Augusta’s city attorney, filed a 10-customer complaint last week with the Public Utilities Commission, alleging CMP improperly used CMP resources, potentially at ratepayer expense, to wage its battle of retribution against the city on behalf of its partner company Maine Natural Gas.
Ralph St. Pierre, the city’s finance director and assistant city manager, testified last week the bill would cost the city $200,000 in excise taxes from CMP, a big hit to Augusta, while providing comparatively little in new revenue for the other municipalities, each of which would get only a portion of that $200,000.
Harrington, in written testimony, said CMP has 490 vehicles and, if the bill passes, would pay excise taxes on 114 vehicles in Augusta, 97 in Portland, 46 in Lewiston, 35 in Fairfield, 34 in Brunswick, 29 in Alfred, 24 in Rockland, 21 in Farmington, 21 in Bridgton, 19 in Skowhegan, 18 in Dover-Foxcroft, 14 in Belfast and eight in Rumford.
Keith Edwards — 621-5647 [email protected] Twitter: @kedwardskj