The Maine Public Utilities Commission will investigate Versant Power Company’s management and performance after an audit found that customers are facing increasing rates but not increased service, the commission announced Tuesday.

Investigators will review Versant’s compliance with previous PUC orders and its performance metrics, “as well as broader issues related to the company’s management and service delivery,” the commission said.

The decision to investigate came after a monthslong audit by Overland Consulting, which found multiple areas of concern and offered recommendations for how to address them, the commission wrote in its order, dated Tuesday.

“Among these issues is what appears to be a lack of meaningful oversight of Versant by its corporate parent Enmax,” the PUC said in the order. Enmax, based in Canada, bought Versant in 2020.

That recommendation came as a surprise, said Judy Long, senior manager for communications and brand at Versant. Before Enmax finalized its purchase, stakeholders and the commission agreed to more than 20 conditions intended to keep the company focused on Mainers and local needs, Long said.

Those conditions included giving Maine representation on the company board, Versant pursuing a credit rating separately from its parent and prohibiting Enmax from conducting some affiliate services for Versant, she said. Enmax could directly operate only certain services, such as overseeing payroll.

“So we are a little bit puzzled by that recommendation,” Long said on a phone call Tuesday. “They’re suddenly demanding more direct (engagement).”

The PUC also argued that Versant customers are “shouldering significant regular increases in their rates” but have yet to see a meaningful improvement in service and reliability.

Long said price rate increases have reflected increased costs of labor and materials — from lumber for poles to transformers — as well as years of “delayed or deferred” maintenance and improvements. She added that Versant has charted incremental but consistent improvement over the last five years, though “there have been blips,” such as heavy storms last year that took down infrastructure across the state.

“We’re a rural utility. We have a big, big system but not a lot of customers on it,” Long said. “To try to make each dollar we spend equal improvement in customer service is difficult.”

The audit by Overland began in May, the PUC said. Regulators charged in February that Versant was attempting to delay and extend the audit process, including by failing to pay audit invoices on time. Versant denied that it attempted to delay proceedings and had requested more details on the amount it owed in a letter Feb. 14.

In a written statement, PUC Chair Philip Bartlett said the report “raised a number of questions regarding the judgment of Versant’s management.”

“Through this investigation we will review any other relevant evidence to determine whether there are any deficiencies and, if so, what action should be taken to address them,” Bartlett said. “We are committed to holding utilities accountable for meeting their statutory obligations to their customers.”

The utility, in an emailed statement, said it agrees with several of the audit’s findings and “has already been working on improvements in certain areas” but was concerned about the cost of some of the commission’s recommendations.

“This report recommends tens of millions of dollars in suggested new spending on personnel, software and corporate initiatives at Versant Power while claiming this could somehow achieve $1.5 to $4 million in customer savings per year,” Versant said in a written statement.

The statement went on to say the company has received mixed messages from policymakers and regulators.

The audit argues that Versant has struggled to effectively disconnect customers for nonpayment and “has not allocated sufficient resources to its credit and collection” processes, resulting in a significant increase in the number of customers who are months overdue and still receiving and being charged for power.

But Long said that recommendation is in direct conflict with pressure from some legislators to be more flexible with overdue customers. A law enacted last year requires the PUC to establish rules against utilities shutting off a customer’s service in cases of extreme heat or humidity — on top of other rules barring wintertime disconnections.

“This audit makes all kinds of recommendations of new spending, which is in conflict, frankly with all the other recommendations,” Long said.

Versant is the second-largest electricity provider in the state, serving roughly 165,000 customers in northern and central Maine.

This story will be updated.