Power companies fight Maine’s proposed non-profit utility

https://www.theguardian.com/us-news/2023/jun/18/maine-state-run-utility-power-companies

by PaulHoule • 3 years ago

251 180 3 years ago

Thank you for posting this, great news indeed!

I get my electricity from a rural coop (NOVEC) and they are honestly the best service, lowest price, efficient, innovative and treat the community so well.

It can be done!

Nifty39292• 3 years ago

How long has NOVEC been around? Can you share anything about how they came to be?

Do they own the grid and wires and whatnot, or just the power? Are there other choices in your area?

AndrewKemendo2• 3 years ago

Since the 1930s and yes they own the fiber

They do a good job explaining here:

https://www.novec.com/About_NOVEC/index.cfm

Loughla• 3 years ago

Flip side - I also get my power from a rural coop in the midwest, and the service is terrible. The price is high. We lose power at least once a week, but that's better than in the past when it was every other day. They have hard limits on what power generation we can do (size of solar panels and no battery backups) and even wade into the situation if you try to install a backup generator - which I understand they want a cut-off to keep from juicing the lines and killing someone, but they want to regulate how large and what kind of generator you can use on your own house.

I know this seems contrary, but I believe people need to understand that a coop isn't a magic bullet. It's a tool, one of many, that if used properly can be great. But if it's not, it's a real pain in the ass.

dghlsakjg• 3 years ago

As a member of the CoOp, presumably you have far more control over making changes to the parts you don’t like…

jacquesm2• 3 years ago

Sounds like you're in a prime position to go off grid.

coleca• 3 years ago

I have a similar experience here in MA. Our town owns the power company as a non-profit and we have amazing service. We never lose power unless someone crashes into a pole or something, and even then it's only out for a short amount of time. When we have a big winter storm and all the surrounding communities on the large providers tend to be dark for days or longer, whereas here any outages are fixed quickly. They actually go around and trim trees off the lines to prevent future outages.

Nifty39292• 3 years ago

Why I don’t see mentioned is: why?

Is it about reliability? Cost? Both? Why not-for-profit?

What controls will be in place to ensure that this one new company will be more responsive to the public than the prior two, smaller companies?

nebulousthree• 3 years ago

Because not-for-profit at least guarantees that the primary incentive is..not profit. Especially not profit over the well-being of the consumer.

Now, does that mean that the primary incentive will be the well-being of the consumer? Time will tell, and only if this initiative even makes it through.

neverartful• 3 years ago

I'm surprised that there hasn't been more of a push for not-for-profit health insurance. A for-profit health insurance company has (IMO) unaligned motives with respect to well-being of the patient.

HPsquared2• 3 years ago

I'm sure the for-profit utilities don't use that as their argument. What is their argument?

msla• 3 years ago

Because not-for-profit at least guarantees that the primary incentive is..not profit.

Look at how much the CEOs of non-profits make and ask yourself if you really believe that.

mcmcmc• 3 years ago

Primarily cost. Oversight includes a democratically elected board and direct oversight by the state public utilities commission. Electric co-ops have been a thing since the 1930s in the US and they tend to work great.

https://ourpowermaine.org/faq/

roughly5• 3 years ago

The great part about this is that, come November, the citizens of Maine can take the total amount of money spent advertising against the initiative, divide it by the number of households in the state, and figure out how much money they could’ve saved by voting for the initiative.

LeifCarrotson• 3 years ago

They can also go to https://s24.q4cdn.com/489945429/files/doc_financials/2022/04... and look at the hundreds of millions in dividends being paid to shareholders out of their utility bills.

I find it humorous that under their estimated $3.8B in utility plant assets they also list $324M "goodwill" assets. GAAP says that goodwill is an intangible asset, but it seems they're spending it rather aggressively...

opportune• 3 years ago

That’s not what goodwill is. It’s the premium paid over NAV for acquired companies

HWR_143• 3 years ago

Goodwill isn't consumer goodwill. It's acquisition goodwill. So if Google buys a company for $1 billion, that might be a great business decision. But the cashflow and projections may only justify an accounting value of 500MM. That doesn't mean it's not a great decision because of a lot of valid reasons. That extra 500MM has to be added to Google's books somehow (they spent $1 billion, and books have to balance), so they have an asset of 500MM of "goodwill" and a corporate asset of 500MM.

metaphor• 3 years ago

CMP's latest FY22 annual[1; starting p. 130] and 23Q1 quarterly[2] financial statements for the habitual numbers sleuthers.

In case anyone else was wondering what the provenance of this $325MM goodwill line item on CMP's balance sheet is, defer to the parent's (Avangrid) latest 10-K filing[3], buried under footnote 7 on p. 123:

Goodwill for the Maine reporting unit is $325 million from the purchase of CMP by Energy East Corporation in 2000.

[1] https://s24.q4cdn.com/489945429/files/doc_downloads/2023/04/...

[2] https://s24.q4cdn.com/489945429/files/doc_financial/Suppleme...

[3] https://www.sec.gov/Archives/edgar/data/1634997/000163499723...

willcipriano9• 3 years ago

If that much meat is left on the bone for a commodity like electricity that indicates to me the market isn't robust enough and we need to lower barriers to entry and increase competition.

forgetfreeman4• 3 years ago

Or we could eliminate profit motive entirely and go back to treating power generation like the public good it is.

conradev• 3 years ago

Texas and Massachusetts have markets where you can choose your own retail electricity provider. The REP is responsible for purchasing/providing the power.

Both systems sit on top of regulated monopolies who own the underlying wires, though.

This Maine utility fight is primarily over who owns the wires, not who owns the generation.

lmm3• 3 years ago

Electricity grids are literally a textbook example of a natural monopoly.

kristopolous5• 3 years ago

If you're willing to have government intervention and regulation to enforce a free market then why not just remove the "landlords" here and go with public ownership to take them out of the cut entirely?

Remember the established assumption here is regulation and intervention is required to enforce the thing. Any argument based on the allergy to public sovereignty over public goods is not applicable. Public governance is intimately involved in either solution

Turskarama2• 3 years ago

Markets don't work well for power distribution because there's fundamentally a natural monopoly.

Unless you think we should allow each distribution company to run their own set of power lines down your street?

0xbadcafebee4• 3 years ago

It is very hard to lower the barrier enough to make it profitable to become an energy provider, either for generation or distribution. You have to already have a favorable market position, like easy access to capital, a huge workforce, expertise, relationships in politics and business, land, infrastructure, etc. That's why they're mostly monopolies, and the only competition is in weird middle-men that use financial trickery to resell energy.

It is honestly really dumb to allow utilities to be private. You waste money paying huge bonuses to CEOs who fail to lower costs or improve service, and then pay out much more from civic coffers when said shit service sets half the country on fire. Regulating and running national infrastructure for the common good is basically what government was created to do, after waging war, regulating commerce, and settling disputes between goat farmers.

tocs3• 3 years ago

We get our electricity from Pedernales Electric Cooperative (PEC) here in central Texas. The do a good job. We pay about $0.09 kw/h.

https://www.pec.coop/

I think there should be more COOPs around. Just having more choice is a good thing.

j-bos3• 3 years ago

I'm also quite pleased with the Coserv coop in north Texas.

Gelob• 3 years ago

Does oncor still provide delivery in these coops?

chadcatlett2• 3 years ago

PEC is amazing. We are on San Marcos's service now, but during the nasty winter storm we never lost power with PEC. Where as other friends else where dealt with downed lines for ages.

piperswe• 3 years ago

I used to be under Bluebonnet Electric Co-op (https://bluebonnet.coop/) when I lived outside of my city limits, and now that I'm in the city I have the public utilities (water, electric, gas, trash; https://www.cityofbrenham.org/city_government/departments/pu...). I've never had substantial issues with either, and they're both dirt cheap. Though I have heard anecdotes about billing issues with Bluebonnet...

tarr11• 3 years ago

I wish California would consider this for PGE

js2• 3 years ago

Santa Clara has its own utility. From my time renting there in the early 2000s it was reliable and affordable.

https://www.santaclaraca.gov/services/utilities

I can't even imagine what would be involved logistically to replace PG&E state-wide.

smilekzs• 3 years ago

It still is. City of SC (silicon valley power) charges $0.13/kWh vs north of $0.4x/kWh from PGE. It's simply impractical to charge EV at home regardless of which plan you pick at PGE, due to aggressive tier limits and the intentionally crippled "EV plan". PGE is legalized robbery.

zbrozek• 3 years ago

We squandered the opportunity presented by PG&E's bankruptcy.

ortusdux• 3 years ago

After the fires a few years back and PG&E's subsequent bankruptcy, Newsom threatened just that if they couldn't get their act together.

https://calmatters.org/economy/2020/02/what-happens-if-calif...

tick_tock_tick• 3 years ago

The state took it over in all but name already.

throwawaaarrgh• 3 years ago

Not give a few executives hundreds of millions of dollars in bonuses for destroying the environment and failing to provide adequate power? That's socialist talk! If a few rich people aren't bilking the public and providing poor services, it's not American.

bell-cot• 3 years ago

Background - one of my uncles was the manager of a small (~2,000 customers) municipal (city-owned) electrical power system in Michigan from ~1945 to ~1995.

It can work, and work very well. But electricity is extremely unforgiving of technical incompetence, and financial incompetence can also kill you (generally in the slightly-longer term). If you can't find and keep good managers on both sides (while the big, for-profit players are trying to hire them away, for obvious reason)...then all the feel-goods and eco-friendly bragging rights in the world won't keep your system afloat.

And your system does not need any interference from an actual for-profit utility to suffer organizational failure. Well-intended idiots and short-sighted politicians can do that themselves, in very short order.

dpc050505• 3 years ago

Québec has the cheapest electricity in North America, Hydro-Québec pays the provincial government a dividend of several billions a year (3.4 last year), the expertise they developed in hydroelectricity is unrivalled anywhere on the planet.

Any business will fail in the face of technical or financial incompetence. Your argument is quite tautological in that regard.

sidewndr464• 3 years ago

I'm still perplexed how anyone thinks it is OK for a public utility to pay "dividends". If a public utility is paying dividends, it must be collecting more income that it's expenses. That obviously comes from ratepayers. In any other world that'd be a tax.

But when it is a public utility doing it is "dividends".

cik• 3 years ago

This is a misnomer. The only reason is because Quebec gets dirt cheap power from an agreement signed with Churchill Falls, Nfld. Quebec buys energy for $0.02 cents per kilowatt hour.

https://www.cbc.ca/news/canada/newfoundland-labrador/quebec-...

cool_dude855• 3 years ago

There are plenty of public employees in the US who know how to run distribution systems. The second biggest city in the country has municipal electricity by way of LADWP.

avgcorrection• 3 years ago

I hope someone relays the message that they need to not be incompetent. Thanks for the concern.

elzbardico• 3 years ago

The problem with for-profit utilities is not even the pursuit of normal profits, but when those utilities are listed companies and then Wall Street almost requires all kinds of magical stuff from said companies because it seems now that every public company should aspire to be a disruptive buy-back addicted unicorn.

HPsquared2• 3 years ago

Ironic, given that interest rates have (until recently) been so low. Utilities have always been very capital-intensive but stable. They should be low-yield but low risk.

sporadicallyjoe• 3 years ago

All basic human necessities should be not for profit.

We all lose when corporate greed meets basic necessities.

ars3• 3 years ago

You're going to have a very very very hard time defining "basic necessity".

Electricity isn't a necessity, neither is internet access. Or maybe it is? Does that mean a phone is a basic necessity?

Is an x-ray machine a basic necessity?

sensanaty• 3 years ago

In what universe is electricity in the year 2023 not a necessity? It's been a necessity for going on a century now

blindhippo• 3 years ago

I'd argue it's not as hard as you seem to insinuate.

If a person wants to be able to live in their own accommodation there are some very key things they require. One of the most basic is a bank account (how do you pay rent without that?). Work backwards from just that one basic concept and you'll quickly see how easy it is to figure out what "basic necessities" are.

Granted, these will vary between economic regions, but it's quite simple to do so.

mynameisash• 3 years ago

I'm not sure if there's a legal definition, but what I found[0] says that

Essential services are the services and functions that are absolutely necessary, even during a pandemic. They maintain the health and welfare of the municipality. Without these services, sickness, poverty, violence, and chaos would likely result.

The listed examples of essential services include things not absolutely, positively necessary to protect life and limb:

* Maintenance of communication infrastructure (e.g., telephone system, radio, internet)

* Maintenance of utilities (e.g., gas and electricity)

* Transportation

* Road maintenance/repair

* Banking

* Payroll departments

* Tax collection

[0] https://www.paho.org/disasters/dmdocuments/RespToolKit_24_To...

Y_Y2• 3 years ago

I'm sure you're being rhetorical, but to some extent the answer is yes.

At least where I live, light and heat are basic rights and those are often most easily and cheaply provided by electrical means. X-ray machines, considered as part of adequate medical care, are similarly guaranteed.

I don't know that the internet is considered a "basic" necessity anywhere, but again we're entitled to education and to engage with the society in which we live, and the internet is a common and effective means for doing those. That said, I'm not aware of state-provided internet outside of libraries and schools.

josephcsible• 3 years ago

Since food is a basic human necessity, should farms and grocery stores all have to be nonprofit?

danaris2• 3 years ago

Yes?

Why not?

You seem to think that those proposing this don't recognize we're pushing for a massive shift in how things work, that will disrupt many areas significantly.

We recognize that just fine. There are ways to mitigate the harm from that disruption.

It's absolutely clear to us that even if we don't mitigate that harm, the system afterward will be much more just and much more kind and humane than the system we have now.

plagiarist• 3 years ago

Sounds good to me. I sure am subsidizing farms with my taxes, not sure why I need giant corporate owners back there making millions off of it all.

forgetfreeman4• 3 years ago

Literally yes.

kevingadd• 3 years ago

We need farms and some sort of food distribution system for everyone to survive, so that doesn't sound like a bad idea.

You could always decide that grocery stores are allowed to be for-profit, or perhaps only things like co-ops or benefit corporations.

We eventually came to accept the reality that our society works better if we ensure universal access to things like mail, so we should be willing to evaluate whether the list of universal goods needs to be expanded

rodgerd5• 3 years ago

If food production operated as, say co-operatives between farmers and customers, what do you think would be worse or better than the current model.

(Note: I get my insurance through a co-op, and the difference between my experience and people who don't is pretty eye-opening.)

cool_dude855• 3 years ago

The US’s first state-run public power company could be created when Maine votes later this year

Salt River Project is a state run public power company.

rodgerd5• 3 years ago

Isn't TVA? Or that federal? Or just a generator?

cool_dude855• 3 years ago

TVA and Bonneville Power are federal. I think they are both also generation and transmission but not sure.

bearjaws• 3 years ago

I get power from a local coop instead of Duke, and to no ones surprise its 38% cheaper for the same damn power plant.

They actually just cut their rates, while Duke raised them.

No surprise to me that Duke is publicly traded and more expensive.

tomohawk• 3 years ago

This sort of thing can have a really bad failure mode. If the government is running the utility who do you go to if service is bad?

Where we live, we used to have the trash collection done by the government. That did not work. Trash was strewn all over. Trash was not picked up on time or at all sometimes. We had a change in party controlling things, and they contracted it out. The contractor does the work and the government proides oversight. It's been several years and this arrangement has been far superior during that time.

Already mentioned in the article, the government, depending on who is in power, can have motives that are contrary to running a utility. To run a utility, you need to be focused on good service at least cost. Improving the physical plant costs sums that are amortized over decades. If the party in power decides to offload the cost of some agenda into the utility, it will have the same effect as raising taxes. California has the highest electricity prices in the country due to them doing this sort of thing. It would be likely much worse if that state also ran the utility themselves.

ipcress_file• 3 years ago

I live in British Columbia and BC Hydro (a government-owned utility, thanks to our right-wing Social Credit party, which bought out a private supplier in 1961) is the best. Service is amazing and rates are great. Apparently, government ownership doesn't have to be disastrous.

P.S.: I know that a party called Social Credit doesn't sound right wing and does sound like a Chinese Communist Party plot. In reality, it was a conservative party run by a small-town hardware store owner. Don't ask.

brewtide• 3 years ago

CMP is owned by avangrid, whom I believe is a company based in Spain. As someone who lives in Maine, I can promise you that their services are lacking and they just raised prices 45% on supply side in January(ish) and are talking about a similar price increase in their delivery side coming up soon.

They are also doing everything they can to combat people installing solar. Alsoz the past few years people have seen 400% increases on their bills, and CMP suggested to the individuals that saw this spike to perhaps limit their consumption, and stuck people with the bills. 2 years later oops, turned out our new billing system wasn't working correctly, hence the insane bills some people were getting.

My friend had a $25 a month typical bill balloon to nearing $400, with nothing broken (ie hot water heater) and no change in usage. Many many people.

The license plate on one of my cars reads Agorist, and I'm honestly STILL learning towards the idea of the state run utility, because AT THE MINIMUM, the state has to deal with the situation they cause if they fuck it up royally.

Spain doesn't have to give a shit.

It's a really terrible company to have as your power company. (The linemen / crews are all super nice typically, it's the corporate side of it that's a nightmare).

glenstein• 3 years ago

If the government is running the utility who do you go to if service is bad?

I also live in Maine and this part.... is not true! The Maine Govt would not run the company. No government would. It would be consumer owned.

Meanwhile, the power companies themselves actually are in large part government owned: Qatar is the largest shareholder of Avangrid and Versant Power is directly government owned, by the city of Calgary.

fallingfrog• 3 years ago

Yeah I live in Maine and we are constantly carpet bombed by ads targeted at baby boomers which complain about “government controlled power.” Which is totally false, they’re going to run it more like a credit union. It’s consumer owned.

Power companies fight Maine’s proposed non-profit utility

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