Why Pine Tree Power? A Conversation with Economist Richard Silkman, PhD

The Case for a Consumer-Owned Utility
by Robert Stevens and Suzanne Watson

If the existing power delivery companies in Maine have their way, it is all too likely that we will continue with the same inadequate electric infrastructure we currently have and the same dismal record for consumer satisfaction.

Both CMP and Versant have shown that they don’t prioritize the rebuilding of our power infrastructure to meet the needs of the 21^st century.  For consumer satisfaction, CMP has been ranked second to last out of 145 utilities in the country, while Versant follows right behind with third to last!

These foreign-owned entities don’t dispute these facts but instead offer us fearful nightmares about the dangers of consumer-owned utilities: astronomical costs; elected officials who can’t be trusted or lack the expertise to properly run a state-wide utility; a government takeover.

We have looked at these fears being pumped up by Pine Tree Power’s opponents, and while we acknowledge change can be scary and that all change carries some risk, we believe that the risks are overstated and that the threat to our planetary health from doing nothing is so great that it is well worth making this change.

Analysis by Richard Silkman PhD shows that the cost of purchasing the facilities from CMP and Versant will likely be significantly lower than the high number used to scare voters and that the cost can be paid without raising utility rates.  Additionally, utility rates will be lower because consumers will no longer have to be charged rates that provide an 8 to 12% return on investments to shareholders.  And furthermore, access to capital will be available at low non-profit bond interest rates, again saving the consumer money.

As far as the expertise argument goes, Pine Tree Power Company’s democratically elected Board will, by law, appoint 6 members who must collectively possess expertise in several areas, including utility law, management, planning, operations, regulation, finance, electricity generation, storage, efficiency and delivery. The Company will contract with a non-governmental entity to manage operations.  And as for it being a government takeover, 7 members of the board, each representing five of the State’s thirty-five Senate districts, will be elected for 6 year terms by the voters. The most likely pressure they will be subject to is to do everything possible to improve the grid to accommodate the varied sources of energy generation needed.

Right here in our state there are long-time success stories of citizen-owned power supply operations. Kennebunk Power & Light was established in 1893. It is one of eight such consumer owned, not-for-profit utilities in Maine. These utilities are successfully working not only here in Maine but in the nation as a whole and have for decades.

Climate change can only be addressed if we are willing and able to change the way we have done things in the past. The current utility system worked reasonably well for us for over a century, but it must see significant change to accomplish turning from the old fossil fuel regime to the fully electrified grid delivery system. Investor-owned electric utilities care about increasing their shareholder profits not the citizens’ interests in a more resilient and clean electric infrastructure.

With the power of our own vote, we, the brave and venturesome people of Maine, can take back our own local power. Let’s decide we care enough about the future of our planet to bet on what has been successfully done in the past and can be done here in Maine – implement a citizen-owned utility. Let’s lead again and show how it is done. The nation will follow.

Robert Stevens is a retired attorney and leads FreeportCAN’s Solar and Buildings Group.

Suzanne Watson was the Policy Director for the American Council for an Energy-Efficient Economy (ACEEE) for over twelve years. She founded the Maine Environment & Energy Center (E2Center) here in Maine in the late 90s. Currently she works as a private consultant to the US Dept of Energy and the University of Maine.

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