The plan adopted by Governor Mills’ Climate Council is a milestone in Maine’s effort to achieve a low-carbon future.
Under the leadership of Hannah Pingree, the Council proposed a bold and achievable plan that will capitalize on Maine’s unique assets of abundant clean energy, our spirit of innovation, and sheer Yankee ingenuity.
The plan relies heavily on “beneficial electrification.” Powering our transportation, heating and industrial processes with fossil fuels has damaged out climate. The plan proposes to replace petroleum with cleaner grid power from renewables such as wind, solar and hydro.
Most Mainers only think about the grid when their power goes out. The plan challenges us to reimagine the grid as the backbone of our beneficial electrification efforts while still meeting the basic need of safe and reliable power.
The original purpose of state electric grid policy was simply to foster the availability of service to all parts of the state. For safety and logistical reasons, lawmakers decided to forgo the benefits of competitive markets and instead gave one company the exclusive right to serve a territory. In exchange for this monopoly -- in theory -- the government protects consumers by strictly regulating the quality of service as well as the rates and profit paid to utility investors.
Fast forward from the era of the Model T to the days of the Tesla. While some utilities are struggling to fulfill the original purpose of just keeping the lights on, the Climate Council plan makes clear that society is adding a critical new purpose to the electric grid: facilitating the transition to zero-carbon power.
This new public purpose is not only essential to the Climate Council plan, it also creates new jobs and supports an abundant economic future for Maine. It is just as compelling as the original purpose of universal electrical service.
Existing investor-owned utilities have been slow to integrate renewable energy, and in general have not embraced this new purpose. But it should be a public decision not left to far-away investors. As private companies, they own the poles, wires, and transformers, but they don’t own a permanent right to the monopoly they currently enjoy. They should not be the ones to decide how to prioritize the public purposes such as those in the Climate Council plan.
And we should learn from history. Over the decades, lawyers and lobbyists with a deep network of connections across the political spectrum have bent the regulatory system to serve the interests of investor-owned utilities. The result is that ratepayers pay utility investors a “risk premium” even when nearly the entire financial downside of procuring and delivering utility services is passed through to ratepayers.
As Maine grapples with the decision of how to finance version 2.0 of the grid, we should learn from that record, and whether Maine would be better served by following ownership precedents such as MEMIC, the Maine Turnpike Authority, and a number of successful consumer-owned electric and water utilities.
The utilities will push back. We should not be surprised when a company wants to retain a business model that offers many benefits and few risks.
But reevaluating the role of private utilities is just good policy, and not government overreach. It is the continuation of a vision articulated by Nebraska’s Republican Senator George Norris – that some public functions are too important to entrust to remote decisionmakers. Norris’ vision prompted numerous communities across the country to create consumer-owned utilities that respond to their customers rather than exploit them as a cash cow to benefit far-away investors.
This path will save money. Experts say that consumer ownership will reduce the cost of beneficial electrification by as much as $9 billion. When Long Island NY chose consumer ownership, rates dropped by 20 percent. Even utility-friendly consulting firm London Economics International recently reported that Maine ratepayers will benefit from a new approach.
Maine now faces a decision. Should we pay out-of-state investors unnecessarily high prices for every new pole, wire, and transformer? Or will we re-vision our grid to reach our climate goals in a way that Maine can afford?
The answer to this critical question will determine if Maine can achieve the Climate Council’s bold vision of beneficial electrification while there is still time.
By: John Brautigam, Former State Representative & Sierra Club Maine Executive Committee Member.