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The Natural Resources Council of Maine on Wednesday backed the ballot measure to replace Central Maine Power and Versant with a consumer-owned utility in another show of support from the environmental community for that campaign.
In a blog post, NRCM laid out its reasons for supporting Question 3, which will appear on November’s ballot and has also received the support of the Sierra Club. As the Maine Morning Star previously reported, the referendum will ask voters whether they want to buy out Maine’s unpopular investor-owned utilities, CMP and Versant, and instead create the Pine Tree Power Company, a consumer-owned utility that would provide power to most of the state.
While opponents of the referendum have said the campaign is an expensive gamble with Maine’s energy future, proponents have argued that the measure would allow the utility to reduce energy costs and prioritize investments in the electric grid and transition to clean energy because, as a consumer-owned utility, it wouldn’t have to focus on the profits of shareholders.
That point around the shift to clean energy is what NRCM focused on in its endorsement of the Pine Tree Power referendum.
“Adopting a consumer-owned utility model for Maine gives us our best chance for the leadership, low-cost financing, and properly aligned utility incentives we need to accelerate the clean energy transition,” Rebecca Schultz, NRCM’s climate and clean energy senior advocate, wrote in the blog post.
Specifically, Schultz laid out three core reasons the group is backing Question 3. The first is that NRCM believes transparency and local accountability will help speed the transition to clean energy. Rather than being beholden to distant shareholders (CMP is a subsidiary of Avangrid, which is owned by a Spanish multinational corporation, while Versant is owned by the city of Calgary in Canada) Schultz said the Pine Tree Power Company would be truly accountable to the people of Maine. She pointed out that if created, the organization’s board would be made up of residents of the state, some of whom would be elected and some of whom would be appointed based on their expertise on key issues.
“The effect of this shift in governance away from the interests of multinational corporate boards and large ownership stakeholders based abroad toward local concerns here in Maine should not be understated,” Schultz said. “The clean energy transition necessitates public trust.”
The second reason NRCM is backing Question 3 is because the “low-cost financing available to consumer-owned utilities would be a major benefit in making an equitable and affordable clean energy transition a reality,” Schultz wrote, arguing that this provides a huge advantage for public power companies over investor-owned models like CMP and Versant.
Having access to low-cost financing could also free up funds to create programs ensuring that people from marginalized communities can access the clean energy transition and obtain efficiency upgrades such as weatherization, heat pumps, solar, and zero-emission vehicles, Schultz said.
The third reason NRCM is endorsing the Pine Tree Power campaign is because of the business model of investor-owned utilities like CMP and Versant, which Schultz wrote are guaranteed by regulators a 9%-10% rate of return on “all expenditures for building and maintaining the poles and wires and everything else used to deliver electrons to homes and business across Maine.”
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The requirement of investor-owned utilities to generate profit for shareholders leads to a strong incentive to spend on capital projects that aren’t necessarily the most efficient use of resources in the face of the challenges created by the climate crisis, she said.
In contrast, Schultz said consumer-owned utilities operate very differently.
“The COU business model eliminates the preference for building utility-owned infrastructure, saves ratepayers that 9-10% additional cost on investments, and unlocks an alternative incentive structure that can help precipitate collaboration, transparency, and third-party participation for the grid of the future,” she wrote. “Without reorienting our utilities’ incentives, regulators and advocates will continue to have to work within a regulatory structure built for another era to meet the challenges we face today.”
In her post, Schultz did acknowledge that there are still some questions about how exactly the shift from the CMP and Versant to the Pine Tree Power Company would function in practice. Given that, she said strong partnerships with and oversight from regulators and the public will be crucial elements of making the transition work. But despite potential challenges ahead, Schultz believes moving to the Pine Tree Power Company would ultimately help spur significant progress toward tackling important environmental issues.
“Over the long arc of reorganizing our economy and our society to solve the climate crisis, public power would be a giant step in the right direction for Maine,” she said.
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