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New bill could incentivize Maine utilities to invest in reliability and meeting climate goals

Central Maine Power utility lines are seen, Wednesday, Oct. 6, 2021, in Pownal, Maine. A tug-of-war over the future of Central Maine Power is continuing behind the scenes with a pair of proposed referendums next year.
Robert F. Bukaty
/
AP file
Central Maine Power utility lines are seen, Wednesday, Oct. 6, 2021, in Pownal, Maine. A tug-of-war over the future of Central Maine Power is continuing behind the scenes with a pair of proposed referendums next year.

Maine's electric utilities are pushing back on a proposal that could potentially link their profits and revenues to specific performance goals.

The new measure would direct the PUC to create a framework to enhance the state's standards for utilities. Those standards could also be connected to goals such as cost-effectiveness and meeting the state's climate policies. The commission could then look at ways to tie utilities' performance in those standards in the rate-setting process.

The bill's sponsor, Democratic Representative Gerry Runte of York, said at a public hearing on Tuesday that traditional utility regulation was designed for the rapid buildout of the electric grid, while his measure would allow the state to place new priorities -- such as climate resilience and grid modernization -- at the forefront.

"It promises to improve the efficiency and reliability of our utility services. And contribute to the environmental and climate objectives of the state," Runte said.

The approach, called "performance-based" ratemaking, received support from several of Maine's environmental advocacy groups. Sean Mahoney, with the Conservation Law Foundation, noted that while Maine voters handily defeated a proposal to create a consumer-owned utility last year, the issue made clear the need for more accountability for Maine's utilities.

"We did not support the referendum, but we felt that there needed to be significant new action, new steps taken, to increase the level of accountability and performance of our utilities. LD 2172 is a very good step in that direction," Mahoney said.

Two years ago, the state passed a lawcreating minimum service standards for large electric utilities, with potential penalties for repeated poor performance.

Given that law, several opponents of the new measure questioned the need for new legislation, and Central Maine Power said that the company was already working on issues such as climate change and collaborating with other stakeholders on the issue.

James Cote, speaking on behalf of Versant Power, said that if metrics aren't applied correctly, it could lead to utilities underinvesting in certain areas, and overinvesting in others.

"If we get that calculus wrong, then I think you see costs, that people do not want to see invested in the grid, added on to the backs of customers," Cote said.

Advocates say 17 states have adopted some form of performance-based regulation.

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