Climate crisis needs all solutions, including nuclear

 

Gordon L. Weil

A U.S. Open Tennis Tournament match was suspended so a climate protester, who had glued his bare feet to the ground, could be removed.

Though his means of expression was extreme, his protest was valid.  The U.N. group tracking progress in halting global warming issued its report almost the same day.  The world is not getting there.

Most countries have set the net emissions goal for greenhouse gasses (GHG) at zero by the middle of the century – just 27 years from now.  With massive understatement, the report says that achieving that “goal requires broad and rapid changes in existing practices.” 

Can anyone seriously believe the net zero goal for GHG – mainly resulting from carbon-producing fossil fuels – will be achieved by then?  The U.S. struggles to cut emissions and begins to try taking carbon out of the air.  Meanwhile China, the next largest producer, keeps adding coal-fired power plants.

Energy to fuel cars, heat homes and run offices and factories will come largely from electricity.  Electric power will have to come from wind, solar and even hydro to make a serious dent in the use of fossil fuels.  Sustained efforts at efficiency, which means using less, are essential but unlikely to cover the gap left by renewables.

There are good reasons for restrained enthusiasm about renewables.  They depend on the weather, which is far from being under human control and perhaps shouldn’t be.  They also are not always available just at the time they’re needed.  Continuous power supply from renewables will require electricity storage that is not yet fully developed.

Ending global warming is a matter of economics.  Oil companies talk a better game about renewables than they play.   Renewables may produce long-term savings and new jobs, but the transition may raise costs and reduce jobs.  And a new world economy increases demand for energy. 

Renewables won’t be enough.  Focusing heavily on them avoids talking about the elephant in the room.  It does not produce carbon. Its technology is available now.  It reduces dependence on questionable energy suppliers like Russia and Saudi Arabia.  It is nuclear power.

Apprehension about nuclear power has two main causes.  The first is the destructive power of the atom revealed by the two bombs that ended World War II.  The second is the demonstrated failure of some power producers to understand how or where to build a nuclear power plant, which caused accidents or even disasters.  Think Chernobyl.

The fear has been so deep that some people want to dismantle nuclear power.  Before it was closed, the Maine Yankee nuclear power plant faced no less than three referendums and prevailed in all.  For some politicians, nuclear power has become an automatic no-no.  The U.N. report, aware of political sensitivities, never uses the word “nuclear.”

Government and industry are learning that building a nuclear generating station is not the same as a traditional oil or coal unit.  In New England, that lesson was learned at the Seabrook plant in New Hampshire.  A unit was put into service only after an experienced nuclear expert replaced the local utility managers.

Industry hasn’t been helping enough.  Discharges of water from the Japanese Fukushima plant may be as harmless as claimed, but they have set back the use of nuclear power.  Many people will not trust a company that hosted a nuclear disaster.  The plant’s name should have been allowed to fade into relative obscurity.  There had to be a better way, even if it cost more.

Concerns are met by government regulators, but the process is slow.  Industry may resist and neighbors may worry.  A more uniform regulatory review process could help.  Federal regulators are developing it, but it remains to be tested in practice. 

The US, UK, Japan and other countries are working to aid the development of nuclear fusion power plants.  Fusion reactors produce little radioactive waste and require small amounts of fuel. U.S. federal aid goes to commercial developers, who seem to be the most advanced.

Even with efficiency, renewables and now nuclear in the works, much needs to be done. New generators and lines must be built. Auto charging points must work faster and be more available.  Storage, from car batteries to wind farms or hydro reserves, must be created. Like nuclear power, they can face local opposition and impose new costs – the price of reversing global warming.

Obviously, the world cannot cling to fossil fuels or bet on a single solution to the climate crisis.   There once was a song, “Wishing Will Make It So.”  Nice kids’ song, but bad public policy.

The problem is that human civilization is now being transformed by climate change. All available solutions must be used.  Renewables, efficiency, and nuclear all impose costs.  So does doing nothing.

 

 

China's claims, presidential race, Maine campaign -- all use fake numbers

Americans have an almost religious faith in numbers.  When people believe in statistics, that helps politicians.

People keep their faith despite the truth of that old saying, “Figures don’t lie, but liars figure.”

Nowhere is that more accurate than in political campaigns.  It’s evident now both in Maine and on the national and world scene.

In the campaign waged by for-profit CMP and Versant against the proposed non-profit Pine Tree Power, the two current companies say that it will take $13.5 billion to compensate them for selling their property.  That sounds daunting enough to overwhelm any other issues.

The simple answer is that the exact cost cannot now be known.  As in virtually all cases of this kind, the two sides don’t agree on a price and a court decides.  The PTP proposal even recognizes that a Maine court will decide.

Beyond that, the inflated amount results from one of the basic reasons why a lot of numbers and polls are much less reliable than they may seem.  They are based on the assumptions used.  For example, the two utilities paid for the study that yields the high number, so it’s expectable that its assumptions would help them.

In addition, there is a recent utility acquisition in Maine that could influence a court.  In 2020, Versant bought its utility from Emera.  It paid the audited value of the property plus a premium of about 21 percent.  If that same approach were used in the PTP takeover, the cost would be less than $7.5 billion.

Finally, the customers of those two utilities now pay for their poles and wires and they would continue to be responsible.  They are now paying off about $5.4 billion, so that would not be a new cost.  Somewhere in the heated and costly campaign, these facts, undermining the $13.5 billion claim, get lost.

The numbers in the presidential match-up between Biden and Trump are just as dubious. The average of major national polls has them even. The media pushes the story of a dead heat between the two seeking another four years in the White House.

There are a lot of problems with this conclusion, even if it seems to be based on the poll numbers.  The most obvious is the failure to take account of the 11 percent who did not pick either candidate.  Where will they go or will they stay home?  What about the people who refused to answer?  They are certainly enough to swing a national election.

These numbers might have some small interest if there were a national presidential election decided by the popular vote.  But there isn’t.  There are 51 separate elections (the states and DC).  To have a better view of who’s leading would require knowing about the presidential race in each state.  But polls simply do not yet exist for many states.

Timing also matters a lot.  The polls, limited as they are, are conducted 14 months before the elections.  The candidates have not yet been selected and campaign developments can affect the final result.  Court cases and potential third party participants will affect the results just as will the size of the turnout.

In short, the numbers that supposedly inform people of the likely outcome of a presidential election offer little useful guidance. They may even be biased by the way questions are asked or the voters choose to answer.  Voter beware.

Finagling the numbers doesn’t stop at the border.  China wants to show the world that the Communist Party’s version of economics is superior to the U.S. free enterprise system.  That’s a key part of its effort to attract the developing countries, turning the Southern Hemisphere into China’s sphere of influence.

According to its numbers, its economic growth looked unbelievably good. But don’t believe China’s economic data, because they have been lying.  When it became clear that its economy did not match its claims, the Director of the National Statistics Bureau there admitted that, “fraud and deception happen from time to time, in violation of statistics laws and regulations.”

Number crunchers have been recalculating when China might pass the U.S. as the world’s largest economy.  Because of its huge population and proclaimed growth, it looked like it could happen this decade. In fact, it may never happen.

The reasons are both its slower economic growth and a declining population caused by limiting family sizes plus an aging population.  Lies about the size of the Chinese population are now being revealed.

The message? Be skeptical of other people’s numbers. The real effect on you of electric rates or presidential elections or the rivalry with China matter more than the often phony numbers designed to impress or confuse you. Number One is still the most important number. 

Supreme Court has too much power

Gordon L. Weil

The U.S. Supreme Court will come back in a couple of weeks, and it will again be making politically charged decisions on whether laws passed by Congress are allowed by the Constitution. 

Such decisions are among the most controversial it makes.   They give the Court a power greater than Congress, which makes the laws.  This is the power of “judicial review.”  When the Court’s decisions appear excessively partisan, it looks more legislative than judicial.  Anger with it may run high, leading to proposals to “pack” it by adding more justices.  

As the U.S. Supreme Court gets under way, the world is already being treated to an open national battle over judicial review. Crowds of demonstrators have taken to the streets of Israel.  This week, its Supreme Court began hearings on a legislative attempt to reduce its review powers.

The Israeli court has assumed the responsibility for making final judgments about whether laws are constitutional, just as has the U.S. Supreme Court.  In 1803, the justices here decided that they alone could say “just what the law is.”  That way, their dying political party could shape the law even after congressional control had gone to the opposition.

In Israel, the government, under pressure from some parties that provide it enough support to stay in power, wants to give the Israeli legislature – the Knesset – the last word on what the laws are.  Israel has no constitution, and its Supreme Court has protected its “basic laws,” deciding if new laws meet a test of “reasonableness.”

The government’s logic is that the Knesset, an elected body, should determine the law and not a court composed of appointed judges, some of whom have been on the bench far longer than the current government.  After all, the legislature reflects the people’s will, it claims, not the judges.

Even if that logic may seem sensible, it infuriates a lot of Israelis.  Many Americans might agree.  They worry that democracy itself is likely to be threatened when the court’s moderating hand is taken off constitutional decisions.  Of course, they may simply prefer a court they see as a partisan ally.

Foreign governments usually try to stay out of the internal affairs of other nations, but the U.S. has expressed concern about changes in Israel that could lead to complete control of the law by a bare majority of the 120-member Knesset.  It would also pick the judges.

Yet Israel’s proposed form of judicial review is not unique.  It is called “parliamentary sovereignty.”  It exists in several democratic countries, including the United Kingdom.  With no written constitution as a reference, the U.K. Supreme Court usually rules that laws passed by Parliament must be enforced and may overrule earlier laws or court decisions.

The U.S. system is based on the Court alone deciding what the written Constitution means and if Congress has acted in line with that meaning.  The last word comes from nine appointed justices and not from the legislators who make the laws. 

The U.S. Supreme Court can be as politically slanted as the Israeli courts, because its majority may be named and approved by members of a single party even if congressional control has later shifted to the other party.  That’s how today’s Republican-appointed Court majority overturns laws earlier passed by Democrats, even if once approved by the Court.

When the Court reverses its views thanks to the appointment of new justices, it looks like a partisan legislative body rather than a neutral and nonpartisan panel operating above the political battles.  As it increasingly appears to be an uncontrolled political player, it loses popular respect.

A possible solution could be to couple judicial review with oversight by the lawmakers in Congress.  Without eliminating judicial review or undermining confidence in the Court, Congress has the ability to modify review, strengthening the checks and balances that are supposed to exist among branches of government.

The Supreme Court’s constitutional decisions could have to face congressional review.  Congress would vote on whether to overrule the Court.  If it did, the Court’s decision would be suspended and a second vote would be required following the next congressional election. The possibility of a presidential veto might make necessary a veto-proof, two-thirds majority vote. 

This procedure would introduce legislative involvement, but it would go less far than the British system.  It might bring the voters themselves into the process of deciding if a law is constitutional

Even if Court decisions were not reversed, the process would focus attention on it. The Court would become more accountable, and judicial partisanship might be reduced.

The time has come to begin talking about how unchecked judicial review undermines checks and balances.  The Court’s role should be part of the political debate.  Otherwise, unlimited political power will keep moving toward a Court majority of five unelected justices.

  

Maui’s utility crisis – it could spread

 

Gordon L. Weil

Maui matters. It matters to Maine and probably many other places.

That’s because Hawaiian Electric, the utility that serves the island, has become the focus of concerns that it was a major cause of the fires that disastrously swept a part of that Pacific island. The utility’s downed wires probably caused extensive fires that were not doused quickly enough.

Electricity customers almost everywhere get periodic warnings not to touch wires that are off the poles, usually as the result of a storm. Wires carry electricity from power generators to customers for use in heating, machinery, lighting and many other devices. If they touch the ground, they may remain live. If a person touches a live wire, it can cause injury or death.

Anything an energized line touches receives electricity. In Maui, lines were downed and set off uncontrolled fires on the ground. The fires took what may prove to be hundreds of lives. Critics claim it could have cut off power sooner.

One reason why the threat of downed lines exists is because most electric wires are thin and bare and not protected by an insulating covering. That means that if they come under the weight of a tree limb or fallen tree, they can break more easily than would a more substantial, insulated wire.

Where lines are relatively often broken or grounded, power to customers is interrupted. These “outages” lead to a loss of reliability.

Like Maui, Maine may be unusually vulnerable. More of its surface is forested than in any other state. Utilities claim that trees are the reason why Maine has among the highest rate of outages of all states. Central Maine Power and Versant are among the least reliable electric utilities in the country.

But there’s a lot more to this story. There have always been trees in Maine, and the utilities should have considerable experience with them. Central Maine Power has existed since 1910, 113 years ago. Couldn’t it have learned to deal with trees at some time?

The Maine Public Utilities Commission and similar regulators in other states have belatedly come to require “vegetation management,” reducing outages. The rates utilities are authorized to collect include the costs of vegetation management. If a utility scrimps on tree trimming, it can keep for itself as profit some of that allowed income.

That may have happened on Maui and in other utilities across the country. It can be detected in states where there are both high outage rates and lots of trees.

Unless regulators keep a sharp eye on utility tree trimming, outages can be excessive, making the system unreliable. A few years ago in Maine, the PUC finally required CMP to adopt a program of vegetation management to keep trees away from the lines and increase reliability. In other states, other utilities were doing the same.

“We decided that we needed to get very serious about doing tree trim along every mile, along every span of our distribution system, so we started that in 2008 and gradually over the years – since the program started –we’ve been seeing more and more of a reduction in outages caused by trees,” said CMP.

CMP took credit for what it was finally required to do, only 98 years after the utility was founded. And still its outage rates are among the highest.

There’s another solution that yields maintenance savings: protect the wires. Wires can be insulated and supported by metal cable, avoiding expensive underground lines. But that investment may be less profitable for the utility than building major transmission lines.

Maine, only the 39th state in size, is supposedly too large to use protected wires. But about half of the state’s territory is unorganized with virtually no utility electric service at all.

Non-profit utilities have no incentive to skip tree trimming to boost their revenues. Admittedly, Nebraska has few trees compared with Maine, but it’s also the only state with no for-profit utilities. It is ranked as the most reliable state for electric service just about every year.

The issue may be less about the trees than about the utility. For example, Louisiana joins Maine at the bottom on reliability and it has above average tree coverage. It is dominated by a leading for-profit utility. In contrast, Maine’s non-profit utilities are more reliable than the state’s two for-profits.

A disaster such as occurred in Maui can happen elsewhere. Look at California, where PG&E’s lines have caused major forest fires. The risk exists in Maine and almost any other state.

The answer is either regulators getting much tougher on for-profit utilities and requiring them to install protected wire or giving the responsibility to non-profit utility management, accountable only to its customers for their safety and reliable power.

Donald Trump: the ultimate wedge issue

Gordon L. Weil

Us versus them.

That may be the core of American politics these days.  It often becomes a “wedge” issue.  That’s a single, polarizing cause, usually focusing on social concerns, which gets translated into a political war.

Candidates make a wedge issue the focus of their campaigns.  If they can gain support on the strength of their position on that single issue, they expect their voters to give them free scope to pursue most other policies when in office.

Wedge issues have been around for more than a half-century.  The idea is thought to have been first applied effectively by Kevin Phillips, an advisor to Richard Nixon in his 1968 presidential campaign.  He wanted Republicans to encourage Southern Blacks to become Democrats.  Then, he said, “the Negrophobe whites will quit the Democrats and become Republicans.”

Under Democrats, led by President Lyndon Johnson, civil rights and voting rights laws had been passed in the 1960s.  That would drive many Southern Democrats to the GOP, which had opposed those new laws. 

Bitterly, Johnson said that if you could convince a white man that he was better than any Black man, “he won’t notice you’re picking his pocket. Hell, give him somebody to look down on and he’ll empty his pockets for you.”  Johnson had explained the essence of the first effective wedge issue.

Though the Democrats sometimes try to make wealthy people their polarizing target, the Republicans are the party of the wedge issue.  This was not a surprising move for the GOP,   concerned about possibly losing support.  Such issues might peel away Democrats, as in the South, and could inspire potential supporters who had been on the political sidelines.

While race would remain a divisive issue, two major, new wedge issues arose – abortion and guns. 

As laws easing access to abortion were adopted, supporters of traditional limitations organized.  The battle lines became sharper after the U.S. Supreme Court’s 1973 Roe v. Wade decision recognized a federal abortion right.

At the same time, lines were hardening on gun control.  In 1968, the Gun Control Act was passed with the support of the National Rifle Association, an organization then focused on recreational firearms use.  By 1977, the NRA was taken over by activists who opposed any limits on gun ownership.

On both issues, opposition was focused either on the Democrats or on a liberal Supreme Court.  It was natural for the Republicans to align their party with the opponents of increased abortion access or gun control, especially as they became more politically active and focused solely on a single issue.

Their support gave successful Republicans the backing they needed for other policies. President Nixon could warm up to Communist China with little controversy, while relying on the support of conservative voters who cared almost exclusively about race, guns or abortions.

Wedge issue constituencies could be added to one another. Catering to gun control opponents did not conflict with also seeking support from abortion foes.  It became increasingly clear that the GOP should try to collect special interest constituencies into a coalition to offset any voter losses to the appeal of Democratic economic and social polities.

It has made progress using wedge issues to block the treatment of transgendered people and ban books in school libraries. But, in attempting to find new wedge issues, the GOP does not always succeed.  Its efforts to outlaw burning the American flag or same-sex marriage failed.  Its war on “woke,” a sentiment favoring repair of past legal injustice, is still fought but may be fading. 

Quite possibly, the greatest wedge issue is not a policy but a person.  The Republican Party’s support for Donald Trump reflects both the emotional appeal of an issue like gun control and the political realism of cultivating support to form a coalition that can win elections.

Trump’s appeal seems to withstand the effects from his bravado about groping women to his facing four criminal indictments and a host of other legal complaints.  His support for wedge issues has made him their embodiment.  Trump retains deep-seated political immunity resulting from habitual and pragmatic loyalty among a majority of Republicans.

The exploitation of Trump’s wedge-issue status could make sense.  Couple it with the ability of the GOP’s minority of popular voters to control a majority of electoral votes and its efforts to suppress access to the polls for likely Democratic voters, and Republican hopes to control the federal government may be realistic.

Ardent Democrats seem to believe that the American people will come to their senses and halt this divisive push.  They may be encouraged by support for abortion rights shown in conservative states after the Supreme Court nullified Roe v. Wade. 

The Democrats may need to strengthen their own links to wedge issue groups, especially among women, and get out their vote. 

Power corrupts: the coming of one-person rule in America

 

Gordon L. Weil

Political chatter focuses these days on whether we risk trading democracy for authoritarian rule.   But the record shows we are well past that.

These days, many critical government decisions are made by a single person.  In a democracy, such a person is too powerful. Not that a single person controls our entire government, but one-person rule keeps growing in all three branches of government.  Lord Acton, a British leader, once concluded: “Power corrupts.”

The prime example right now is U.S. Sen. Tommy Tuberville, an Alabama Republican.  He blocks the appointments of all top Armed Forces leaders, trying to force the Defense Department to change its abortion policy.  He places a “hold” on nominations, abusing the power of delay accorded to each senator. 

When the people elect senators, they may think that all are equal. After all, each has the same vote. But the senators willingly turn their power over to a single person.  Because each of them may someday want to exercise the same power, they willingly allow Tuberville excessive clout. Who cares that this naked exercise of power endangers the country?

More broadly, the Senate Majority Leader, a single person, controls the Senate agenda and which appointments can be decided.  When serving as the GOP majority boss, Kentucky Sen. Mitch McConnell denied a presidential Supreme Court appointee even the slightest consideration.    The nomination would have failed anyway if it came to a vote, but individual senators would have been accountable.

Why shouldn’t all senators adopt their own agenda?  Why not do away with the “hold”?  Why not require confirmation votes?

When the Constitution was written, the Framers worried about giving the president the powers of a king.  Some even suggested a committee should run the executive branch.  Believing that George Washington, sure to be the first president, would set the tone for executive restraint, they placed few limits on presidential power.

The presidential veto reflected almost the same independent power of the British king with only the high hurdle of a two-thirds override by each house of Congress.  That made the president the equal of Congress in the legislative process.  Merely threatening a veto gives the president power to make the laws. 

Congress could force vetoes to be issued rather than yielding to threats.  That way, decisions would be made in the open and reduce the sense of government by backroom deals.  The president would be more accountable.

Facing more complex issues, Congress has transferred more of its control to the executive branch.  Presidents can spend vast sums and issue governmental rules.  Congress could recover some of its responsibilities by spending more time on policy and less on campaign fund-raising.

Presidents should also refrain from acting like judges. They take on the authority to sign new laws, while saying they will not enforce parts of them, because they are not constitutional.  The Constitution clearly does not give the president such a power.

Like presidents, governors also have veto power.  In Maine, a governor has vetoed a bill that would simply ask the voters for their decision.  In effect, she substituted her judgment for giving the people their say.  If something was amiss in the resulting law, the Legislature could fix it.  Vetoing popular choice goes too far.

The courts may carry one-person rule to the greatest extreme.  In 2000, by a one justice majority, the Supreme Court determined the winner of the presidential election.  The action of five non-elected judges, when the Constitution sets up a process for the Congress to decide (and the result would have likely been the same), was a pure and historic  power grab, harming the Court’s reputation.

A single U.S. district court judge, sitting alone in a small city, can issue an order blocking actions of the federal government across the country.  One judge in Amarillo, Texas, banned nationally an approved practice for distributing abortion medication.   That this is absurd should be obvious, but the judicial system, giving itself more power, allows it.

Some judges sit alone on the bench in a small area, so random selection of judges becomes a myth.  Plaintiffs can sue to halt federal actions in any district court, so may select a solo judge likely to rule favorably.

These actions are all inroads on the power of the people and of their elected representatives, essential players in a democratic republic.  No matter how divided people are on specific issues, they might find some common ground in protecting the procedures that are supposed to ensure that government does not disdain the people and roll over them.

Now Donald Trump promises to bring the federal government almost entirely under his personal control if he is returned to the White House.   It would be all about his power not the people’s.

Here’s Lord Acton’s full warning:  “Absolute power corrupts absolutely.”

Can a utility be owned by its customers? -- Maine’s upcoming historic vote

 

Gordon L. Weil

Maine will hold a rare and possibly historic vote in November.

The U.S. is increasingly focused on the role and rights of consumers, who drive the economy.  The upcoming vote on the future of the state’s largest electric utilities will not only affect Maine but could send a message across the country.

Voters will decide whether to transfer the property of two electric utilities from ownership by their investors to ownership by their customers, who would gain ultimate control of their own electric service.  Votes like this referendum occur across the country from time to time, but seldom on this scale

The transfer would be from investor-owned utilities (IOUs) to a consumer-owned utility (COU).  The difference between the two is significant.

IOUs are financed by investors and borrowed funds.  They are responsible to their investors.  Customers pay both their investors’ profit and their lenders’ debt service.  Regulators balance the company’s financial needs and customers’ service needs.  Most news reports about electric rate cases and consumer issues relate to IOUs.  

Non-profit COUs are generally either municipal utilities or cooperatives.  They raise all their capital by borrowing and their customers are responsible for debt repayment from rates. There are no investors.  Because the customers bear responsibility, they own the utility.  COUs are subject to regulators, but they also self-regulate.

The difference between the two is illustrated by their management. Top IOU executives report to a board chosen by shareholders.  COU managers report to boards chosen, directly or indirectly, by their customers.  Maine’s existing COUs are governed by publicly elected boards.  They are either cooperatives or municipals.  The proposed COU would be akin to a municipal.

The combination of the investors’ profit and the market cost of debt are part of the rates paid by IOU customers for utility property.  In COUs, the equivalent cost is usually the tax-exempt interest rate for their borrowing.  The costs to be passed on to COU customers are lower than the IOU costs, producing lower rates. 

In Maine, IOUs and COUs own the wires but do not own power supply, which is provided by others.  Customers may choose their own power supplier.   Residential delivery rates, the utility charges for the wires service, are lower for COUs.  For example, CMP’s rate is 11.4 cents per kilowatt-hour, while Madison Electric, operating in the same service area, has a 5.8 cent rate.

An IOU like CMP serves a large area, including rural reaches.  The Eastern Maine Electric Cooperative serves a vast, sparsely settled area and its delivery rate is 9.0 cents.

Are COUs as competent as IOUs?  There are over 2,800 municipal and cooperative COUs and 179 IOUs in the U.S.  The COUs supply 25.8 percent of electric customers nationally.  The largest is Los Angeles.

Overall, using service outages as the measure, the COUs are more reliable than the IOUs.  Reliability matters when residential customers use electricity for lighting, heating or cooling and for business and industry that depend on steady power for their operations.

COU municipals and cooperatives have national and regional organizations that provide them support services in common. As a result, even small utilities have access to full services that meet the same industry standards as the larger IOUs.

Because no electric utility in Maine relies on its own generation but transmits power provided by others, each could transmit power from the same resources, especially renewable. 

A comparison between the existing IOUs – Central Maine Power and Versant – and the proposed Pine Tree Power COU reflects the recognized differences between the two forms of utility ownership.  However, the proposed acquisition of the IOUs’ property in Maine raises two important issues.

First, would PTP operate competently? To reassure Maine customers, the legislation requires it to operate in much the same way as the IOUs and with all the current operating personnel who wish to continue to work under their existing labor agreements.  PTP would be subject to enhanced PUC COU regulation.

Second, would PTP customers have to pay a high price for the acquisition?  The IOUs seek a premium above the actual value of facilities.  The amount will finally be set by a court.  The last major transaction in Maine, the sale of Emera Maine to create Versant in eastern and northern Maine, was priced at the existing value of the property plus only a minor premium.

Today, paying the cost of the existing property of the two IOUs is already included in electric rates that are being paid by their customers.  Thus, the actual premium above that cost, if any, is what would matter, not the balance transfer. It would be far less than what is claimed and could be offset by lower COU costs.

The voters’ decision could affect Maine’s electric rates and influence the push for consumer choice across the country.

Disclosure: I have advised and represented electric customers and COUs since 1973 and support the PTP proposal.