What should Maine’s energy future look like? In April, residents packed a public hearing on legislation to replace the for-profit Central Maine Power with a consumer-owned utility that would, in the words of the bill’s title, “restore local ownership and control of Maine’s power delivery systems.”

Not only would a consumer-owned utility put Maine residents in charge of determining their energy future, bill supporters said, it also would benefit the state economically by keeping Mainers’ money circulating in local communities longer while keeping electricity rates low.

At the hearing, Associated General Contractors of Maine – a trade association with close ties to CMP – raised concerns that replacing the for-profit utility would reduce the state’s tax revenue. However, a recent report by the American Public Power Association found that consumer-owned utilities like the one proposed actually give more back to the community in the form of “payment in lieu of taxes” than investor-owned utilities do in taxes (about 33 percent more of their operating revenues).

Payment in lieu of taxes can include a range of payments and services, but it is often equivalent to a property tax as well as to free or reduced-cost services, such as engineering assistance or discounted electricity to other public institutions. For example, in Nebraska (a fully public power state), the Omaha Public Power District gave back $34 million in equivalent tax payments and services in 2018.

By definition, investor-owned utilities are established to continually generate increased profits for shareholders concerned only about their return on investment, often in the short term. Case in point: In February, a Maine Public Utilities Commission investigation concluded that CMP was making more than the just and reasonable returns as an investor-owned utility, particularly given that “CMP’s performance has significantly and consistently fallen below standards reasonably expected.”

Moreover, for-profit utilities and energy companies are notorious for evading taxes. According to expert testimony for the Maine Department of Environmental Protection by Garnett Robinson, an assessor for 14 Maine towns, CMP has a history of overestimating the value of projects during permitting but underreporting their value when it comes to property tax declarations. Corporate behavior of that nature hurts communities and punishes everyone who pays property taxes.

It is also worth thinking about where those revenues are going. Right now, CMP’s returns are mostly headed to Spain, where CMP’s owner, the multinational conglomerate Iberdrola, is based. They are also headed into the pockets of lobbyists and political candidates in order to weaken regulations and boost corporate profits. For instance, in 2016 CMP strategically contributed to then-Gov. Paul LePage’s political action committee, securing his support to kill a renewable-energy bill that the utility didn’t want. Finally, those revenues are headed into the bank accounts of senior executives. Investor-owned utilities pay their CEOs millions of dollars (substantially higher than the wages of CEOs of consumer-owned utilities) as they fail to reinvest in the grid, keep rates low for customers or increase compensation for line workers. For example, the CEO of Iberdrola makes about $6.7 million per year.

Consumer-owned or public utilities do not have the same incentive to maximize and extract profits because they have no faraway shareholders and do not have to continually worry about their stock price. Instead, the shareholders would be us, the residents of Maine. Any returns made by the public enterprise would be reinvested in better service quality and lower prices or redirected back into the general fund of the state or municipalities it serves. In fact, you could even earmark additional revenues for specific programs in the state to help alleviate energy poverty, invest in grid reliability or help build out public transportation.

The result is stronger, healthier local economies. In short, this is the type of utility that will help build the economy that Mainers want.

Copy the Story Link