After voters reject public power, Maine’s path to utility reform is unclear

Lucy Hochschartner, deputy campaign manager and spokesperson for Pine Tree Power, speaks to the media at Arcadia in Portland Tuesday night after voters rejected Question 3, which would have created a publicly owned utility. She said Wednesday that she will talk to grassroots activists to see what’s ahead for the group. Gregory Rec/Staff Photographer

Mainers have decisively ended debate over replacing investor-owned utilities with a publicly run power company but must still find a way to fix problems highlighted by the unsuccessful campaign.

By a margin of 70% to 30%, voters on Tuesday rejected an attempt to buy the assets of Central Maine Power and Versant Power that together provide electricity to 97% of Maine. With nearly 99% of precincts reporting, Pine Tree Power – the name of the proposed new utility – lost 280,567 to 121,818.

“I think people were surprised at how much of a margin it was,” Rep. Gerry Runte, D-York, a member of the Legislature’s Energy, Utilities and Technology Committee, said Wednesday.

He’s proposed performance-based ratemaking, which links electric utility revenue and profit to specific performance goals. Currently, revenues and profits are linked to traditional rate-setting based on a utility’s capital spending. The practice is getting attention in some states, but has run into opposition in Maine from the backers of Pine Tree Power.

Lucy Hochschartner, deputy campaign manager of the Pine Tree Power campaign, said Wednesday that organizers of the Question 3 campaign will consult with activists before deciding on their next step.

“This has always been a grassroots campaign,” she said of the effort to wrest control of the state’s power distribution systems.

The lopsided result rejected the creation of an alternative utility, but is not generally seen as a vote of confidence in CMP and Versant. Patrick Woodcock, president and CEO of the Maine State Chamber of Commerce, implicitly acknowledged that CMP and Versant must change. The election results, he said, “should refocus all of us to partner with our public utilities to modernize our rate structure, invest in the key infrastructure that are fundamental to our climate requirements and focus on performance.”

David Clough, state director of the National Federation of Independent Business, a small-business advocacy group, said the defeat was a “relief” that spares Maine a “costly and contentious takeover of CMP and Versant.” It’s also important, he said, “to recognize that the need for improved service and reliability remains.”

“A public power authority and politics were not the answer, but the question remains as to how regulators and the power companies will respond to the concerns of ratepayers,” he said.

Even CMP said it’s got work to do. “As we look forward, we must continue to modernize our grid to support Maine’s climate change goals, connect new renewable resources and electrify our communities,” it said in a statement Tuesday night.

However, Versant Power President John Flynn said that by rejecting Question 3, “Mainers have placed their trust in us and we take that responsibility incredibly seriously.”

Advocates of Pine Tree Power had hoped to capitalize on ratepayers’ anger at escalating energy prices, frequent power outages and other troubles. The utilities countered by saying that energy prices are set by global markets and beyond their control. Outages, utilities say, are often the result of Maine’s harsh weather and abundance of trees with limbs that bring down power lines.

Runte said he’s proposed in legislation a standard related to cost efficiencies of the utilities’ operations, long-term investment in infrastructure and other factors. A previous attempt failed in the Legislature, but he hopes it may get a hearing next year.

JURY OUT ON RATEMAKING PROPOSAL

For example, in performance-based ratemaking, regulators could assess a utility’s reliability, telephone response time and other factors when setting rates. But critics warn utilities could manipulate numbers to maximize financial benefits.

With Pine Tree Power “off the table,” Runte hopes legislators with differing opinions will enact performance-based ratemaking.

Former Rep. Seth Berry, a supporter of Pine Tree Power and former House chair of the Committee on Energy, Utilities and Technology, said performance-based ratemaking in some cases is advocated by utilities because it “tends to work in their favor” by making ratemaking more complex, and is more easily understood by utilities than regulators.

“The jury is still out whether performance-based ratemaking accrues to customers,” Berry said Wednesday. “We shouldn’t hold our breath for a more complex scheme to save us.”

The rejection of Pine Tree Power ends, at least for now, an effort dating to 2021 when Gov. Janet Mills vetoed legislation proposing a forced buyout of the two electric utilities. She did not relent in her opposition, urging voters to reject Pine Tree Power. Other foes included the Maine AFL-CIO, which sided with unionized electrical workers who worried they might become state employees and lose the right to strike; the state Chamber of Commerce; and environmental advocacy group Conservation Law Foundation that said Pine Tree Power would not solve Maine’s problems with its utilities.

Backers of Question 3 pointed to support from the Natural Resources Council of Maine, the Maine State Nurses Association, which said reliable electricity is linked to public health; the Sierra Club; Maine Youth for Climate Justice; Maine Climate Action Now and other groups.

Pine Tree Power’s advocates faced deep-pocketed corporations. The owners of CMP and Versant spent more than $37 million to defeat Question 3, as of the most recent report Oct 29. That’s about $132 for each “No” vote, with significant advertising on TV, online and print calling the ballot measure a costly, political “government takeover.” In contrast, the Pine Tree Power campaign spent $1.1 million, a point advocates raised following their defeat.

“Thirty-seven-to-1 is a huge huge spending margin,” Hochschartner said. “We never were on TV. We won 100,000 votes, a third of the state, without ever going up on television.”