"Institutional change is hard"

Maine ratepayers are fed up with their investor-owned utility bills.  The Maine Public Utilities Commission announced an 83 percent increase in supply rate prices for Central Maine Power (CMP) customers and an 89 percent rise for Versant Power customers.  To relieve high prices, residents are pushing to replace CMP and Versant with a consumer-owned utility called, Our Power.  Our Power is made up of lawmakers, conservationists and business leaders that support major change to protect ratepayers from significant increases. 

Can a consumer-owned, non-profit utility (COU) bring about the change customers are hoping for?  Susan Faloon, agency spokesperson said “The PUC, not the utilities themselves, determines supply rates for CMP and Versant customers.”  But Mainers are convinced this is the answer to mismanaged resources, frequent outages and poor customer satisfaction.  Gordon Weil, the former state public advocate and a long-time utility expert said, “The proof is if you look at the consumer-owned utilities in Maine, they haven’t had these increases because they don’t operate under the same set of rules or under the same system or even with the same motivations.”

Currently, about 2,900 municipal and cooperative COUs serve 91 million Americans. Of the 9 COUs serving customers in Maine, ratepayers are charged far less on average than Maine’s investor-owned utilities CMP and Versant.  If consumers owned the utility instead of investors, they believe they could finance grid improvements and increase renewable energy options.  Is it really that simple?   Are customers ready to cover the cost of an energy mix transition and upgrades?  "Significant grid and substation upgrades and improvements, energy storage solutions and other novel investments are made by shareholders -- so any risk falls to them," said Catharine Hartnett, manager of corporate communications at Avangrid. "A consumer-owned utility would have to bond or distill this kind of investment into rates and customers assume all the risk,” Hartnett continued.

In response, CMP CEO Joseph Purington stated, “We encourage all customers who are facing challenges in paying their bills to give us a call to discuss an affordable plan and any assistance available.” 

Supporters of the switch in Maine believe COU’s are key to reaching climate goals and that the IOU business model can never deliver the savings provided by low-cost financing. Consumer-owned utilities can create lengthy agreements through the standard offer process, protecting customers from an ever-changing market and sudden price spikes.  John Farrell, co-director of the Institute for Local Self-Reliance and director of the Energy Democracy Initiative said, "Institutional change is hard… Any institution, public or private, is generally resistant to change. We have crappy municipal-owned utilities, investor-owned utilities -- institutional change is hard.”

What benefits are involved with having an investor-owned utilities?  While embracing change, how can utilities increase options and reduce rates?