On Tuesday, Mainers voted down a referendum that would have transformed ownership of the state's investor-owned electric utilities, Central Maine Power and Versant Power, creating a nonprofit entity and directing that entity to acquire the utilities' assets. Mainers voted in favor of a separate referendum question that requires state-wide voter approval for consumer-owned electric utilities and certain other quasi-governmental entities to take on more than $1 billion in debt.
Proposed Public Utility Reform
After public power proponents failed to succeed with a
utility-takeover through an act of the legislature, a
citizen-initiated referendum question asked voters: "Do you
want to create a new power company governed by an elected board to
acquire and operate existing for-profit electricity transmission
and distribution facilities in Maine?" Mainers overwhelmingly
voted no – the measure only garnered support from 30% of
voters.
The Associated Press reported that this
referendum, if successful, would have "marked the first time a
state with existing private utilities discarded them all at the
same time."
How would this have worked?
If passed, Pine Tree Power Company, a nonprofit entity governed by
a 13-member board of directors, would have been created. Pine Tree
Power would have been directed by statute to purchase or acquire
through eminent domain all utility facilities in the state owned,
operated, or held by any investor-owned utility in the state.
Pine Tree Power would have conducted a competitive solicitation to
contract with one or more private companies to
operate the utility, subject to statutorily defined eligibility
criteria. Pine Tree Power would have financed its endeavors,
including acquisition of utility assets, by issuing debt against
future revenues.
As a nonprofit entity, Pine Tree Power's income would have been
exempt from federal and state income taxes, though assets would
remain subject to property taxation. The company would have been
subject to ratemaking and related regulatory oversight by the
state's Public Utilities Commission.
Opposition and Support
Proponents of the referendum advocated that Pine Tree Power would
have removed the profit-seeking motivation held by investor-owned
utilities, provided more reliable utility service, reduced electric
bills, and accelerated the state's clean energy
transition.
Maine Governor Janet T. Mills urged voters to reject the referendum, citing
uncertainty of costs and benefits. While the state's Office of
the Public Advocate did not formally oppose the referendum, the office published an overview of the
referendum, generally stating that the proponents' claims
lacked clear evidence and that legal battles around the valuation
of utility assets could postpone implementation for 5-10
years.
Editorial boards of the two major newspapers in the state, the Portland Press Herald and Bangor Daily News, both came out against the
referendum. The AFL-CIO and an electrical workers union also expressed opposition.
What comes next?
The Associated Press reports that a Central Maine
spokesperson said, "with this referendum behind us, we are
turning the page. 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," and that
a spokesperson for the Pine Tree Power campaign said the
"drive for a consumer-owned utility would continue."
Voter Approval Required for Consumer-Owned Utilities to Take on More Than $1 Billion in Debt
Maine voters endorsed a requirement to make consumer-owned
utilities seek separate, state-wide voter approval to take on debt
more than $1 billion. This referendum asked voters: "Do you
want to bar some quasi-governmental entities and all consumer-owned
electric utilities from taking on more than $1 billion in debt
unless they get statewide voter approval?"
This measure passed with more than 60% of the vote. Had the
proposed Public Utility Reform question not been defeated, this
measure would likely have hobbled Pine Tree Power's ability to
fulfill its proponents' intended purpose.
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