Television viewers in eastern Maine were treated this winter to an endless stream of “public-service” announcements from their resident investor-owned electric utility Versant Power extolling the company’s character, performance and good intentions. It was part of an extensive public-relations campaign to sell customers on the virtues of private electric power in general and regional provider Versant in particular.
The ads, running nightly for weeks and paid for of course by the captive customers themselves, stressed the supposed friends-and-neighbors nature of foreign-owned Versant, known previously (from 2014 to 2020) as Emera, also foreign-owned, and for decades before the era of international energy buyouts and mergers as the venerable Bangor Hydroelectric Company.
Despite Versant’s current ownership by western Canadian interests, the TV spots depicted a company made up of local people (“We’re all from here”) dedicated to serving local needs and always working to get the power “back on” — a concern because the power is often off, a chronic problem shared by Maine’s other major provider, Central Maine Power Co., or CMP (majority-owned since 2008 by a Spanish multinational), which serves the western part of the state.
Why a sudden mid-winter PR campaign on behalf of a utility monopoly, it might well be asked. The answer is simplicity itself. In the wake of the Maine legislature’s failure in July 2021 to override Democratic Gov. Janet Mills’ veto of a bill buying out Maine’s existing utility companies and creating a consumer-owned nonprofit public-power entity (the Pine Tree Power Co.) to replace them, the state’s private utilities remain free, pending periodic Maine Public Utilities Commission (PUC) review, to continue raising delivery rates to presumed market levels. The hard-sell ad blitz was transparently intended to offset the impact on Versant customers of continued poor service and climbing electricity bills.
Maine’s energy consumers had already been subjected to a spate of rate increases within months of the demise of the legislation creating a statewide nonprofit utility (11.5% in July for CMP customers and 17% in November for Versant customers). Residential rates rose again on Jan. 1 of this year by an average of $30 monthly, prompting the feel-good ad campaign and the PUC’s announcement that the 2022 increase it had approved for consumers (over 80%) was the “best deal” available in light of the surging price of natural gas, the source of half of Maine’s electricity supply.
This conveniently avoided discussing the inherent financial disadvantage imposed on nine out of 10 Maine power consumers by a predominantly investor-owned utility system that guarantees a state-authorized 10% profit for company shareholders. (Maine also has nine small nonprofit electrical cooperatives and municipal-owned utilities servicing a minority of its citizens.)
The American Public Power Association estimates that because they’re able to operate at cost, nonprofit utilities charge electrical users a nationwide average of 12% less than investor-owned companies like Maine’s CMP and Versant. Further, the Maine public-power advocacy group Our Power points out, the state’s consumer-owned utilities charged a third less per kilowatt hour to deliver residential power in 2021 than their investor-owned counterparts.
The latest chapter in Maine’s intermittent century-long battle with its corporate utilities really started a decade ago in the western part of the state, when CMP, recently absorbed by Spain’s energy giant Iberdrola, began to restructure its US operations under a Connecticut-based subsidiary named Avangrid, routinely abusing its Maine customers in the process. Outrages included severe overcharges, unaddressed power outages, failure to respond to customer complaints, staffing cuts, and the maximizing of company profits (up a stunning 133% from 2007 to 2017) — all worsened by an uncommunicative foreign ownership uninterested in its American customer base.
Those concerns produced the first stirrings of a serious public-power movement, beginning in 2019 with the introduction of legislation to create a Maine Power Delivery Authority, the initial step toward disfranchising the state’s corporate utilities. This proceeded in tandem with the widespread negative reaction to the CMP-backed New England Clean Energy Connect, a proposal (also supported by Maine’s company-friendly Democratic governor) to permit construction of a 145-mile, $1 billion high-voltage transmission line through western Maine’s forest to allow Canada’s Hydro-Quebec to deliver power to Massachusetts. The ever-popular CMP was one of Hydro-Quebec’s partners in the project, which Maine voters subsequently voted down in a 2021 referendum, though it remains in legal limbo.
That’s where the fight for public power stands heading into 2022 — stymied for now, but unresolved as advocates of change prepare to bypass Maine’s governor and her veto power by moving to a public-referendum campaign. It’s a unique struggle that pits Maine’s progressive Democrats against a “moderate” Democratic governor and also cuts across party lines, testifying to the proposed measure’s broad popularity and producing anomalous bipartisan co-sponsors of the public-power enabling legislation, a Democratic representative and a Republican senator. Nevertheless, final passage in the Democratic-controlled legislature revived old habits, and despite defections, minority Republicans voted overwhelmingly in the negative.
The bitter-end opposition evoked dispiriting memories of the worst in Maine’s energy past: the unsavory historical alliance between the leadership of the state GOP and the management of the power companies (often one and the same in terms of personnel); the turf war between the private-power utilities and the federal Rural Electrification Administration (REA) and allied electrical cooperatives; and the malign political influence of national power monopolies like the Insull group, onetime owners of Maine’s CMP, whose deep-pocketed successors are now international.
These factors all shaped the present energy system of Maine and not for the better. Mostly, they kept it the domain of corporate utilities, resulting in far higher in-state electric rates than elsewhere in the country; Maine consumers paid the 9th highest rates nationwide in 1947, the 7th highest in 2000, and still the 10th highest in 2021. The more things changed, the more they remained the same.
Regardless, opponents of consumer-owned power make the same tired accusations today as they did a century ago. In 1925, Maine’s reactionary Republican Governor Owen Brewster disparaged public power as being against “American traditions.” In 2021, the primary argument against it (other than transition costs and the loss of some property-tax revenue — 3% at most) was that it represented an un-American “government takeover.” Inertia, it seems, continues to serve the status quo.
Wayne O’Leary is a writer in Orono, Maine, specializing in political economy. He holds a doctorate in American history and is the author of two prizewinning books.
From The Progressive Populist, May 15, 2022
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