Governor Janet Mills unveiled legislation that significantly reforms and strengthens the State’s approach to the oversight and accountability of Maine’s electric utilities.
The Governor’s bill, An Act to Ensure Transmission and Distribution Utility Accountability (PDF), protects the interests of Maine ratepayers, improves the operation and service of Maine’s electric utilities, and increases oversight and accountability of them.
The legislation requires that the Maine Public Utilities Commission (PUC) establish minimum standards of service that utilities must deliver for Maine ratepayers. The legislation also empowers the PUC with enhanced authority to crack down on utilities that do not meet these standards by imposing harsher penalties and, if necessary, even forcing the sale of the utility for inadequate service.
“Whether it’s poor customer service, billing problems, or extended power outages, the issues experienced by Maine people over the past several years have made clear that Maine doesn’t have the tools it needs to hold our utilities accountable. It’s time for that to change,” said Governor Janet Mills.
“With this bill, we are shifting our approach to Maine’s electric utilities. We will empower the Maine Public Utilities Commission to design improved standards for service and finally give the Commission the tools it needs to ensure that utilities deliver on those standards or face new, harsh consequences. Maine people deserve nothing less than safe, reliable, and affordable service on a strong electric grid. My Administration will work with the Legislature, the Public Advocate, and the Public Utilities Commission to see that happen.”
If these quarterly reports determine that a utility is consistently failing to meet this standard, then the legislation requires the PUC is to impose new, higher administrative penalties – up to $1 million or 10 percent of the utility’s annual revenue – to force the utility to improve service.
This new approach establishes an ongoing system of review by the PUC that is a transparent and an alternative accountability mechanism to traditional utility oversight.
The legislation also establishes a process under which the PUC determines whether an electric utility is unfit to provide safe, adequate, and reliable service at just and reasonable rates to Maine ratepayers. If the PUC determines that sale of the utility is necessary to protect the interests of ratepayers, it will then invite bids from qualified buyers and select the purchase proposal that provides the most benefits to customers in the form of better service and lower rates at a fair purchase price.
Additionally, the legislation stipulates that, in the event the PUC invites bids from qualified buyers, it must also consider a bid to create a consumer-owned, quasi-municipal corporation for the purpose of purchasing the utility. This creates a mechanism whereby the PUC could evaluate whether an investor-owned utility or a consumer owned utility is in the best interests of the State.
The legislation provides for periodic audits for Maine’s distribution and transmission utilities to ensure that the utility’s cost of providing service are consistent with the estimates used to set rates. Whenever Maine’s utilities have gone more than five years without a rate case, the legislation requires the utility to make a filing with the PUC comparing its current actual expenses to the estimates used in previous rate cases.
If the discrepancy is greater than 10 percent, the PUC may conduct a financial audit. This new mechanism allows the PUC to review the utility’s financial books and records outside of a traditional rate case.
The legislation requires transmission and distribution utilities to submit every two years to the PUC a 10-year plan for protecting the utility’s assets and operations from the expected impacts of climate change, the first time in Maine history a report of this manner would be required.
The PUC will then review the plan and, with input from stakeholders, may order the utility to take necessary action to protect Maine ratepayers. This new process ensures that utilities are prepared as much as reasonably possible for worsening storms, flooding, fires, or other climate related catastrophes that may impact the utility’s assets, operations, and delivery of service to Maine people. ■