Under fire from all sides, CMP losing the power of its word

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Maine’s largest electric utility has lost the trust of thousands of its customers.

Never before in Central Maine Power’s 119-year history has the company been under assault from more directions. CMP is facing a storm of attacks for how it treats and bills its customers and whether it’s telling the truth about problems at the utility.

State regulators have launched investigations into storm response, rate charges, company earnings and a proposed transmission line. Attorneys for ratepayers are seeking a class-action lawsuit over extraordinarily high electric bills. They are even alleging corporate fraud – saying CMP trained its workers to blame spiking bills on customers, rather than the company’s faulty billing and metering systems, a charge CMP strongly denies.

The company’s new president and CEO, Doug Herling, acknowledges the firestorm, saying “we’re probably the most mistrusted company now.” But his explanation for the public relations nightmare sounds like an alternate reality to CMP’s many detractors.

Herling blames social media, news coverage, suspicion of CMP’s foreign ownership and opposition to company initiatives as primary reasons for that mistrust.

Critics aren’t buying it.

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“They need to stop blaming the customers and acknowledge that customers are being overcharged and they will put a stop to it,” said Lauren Loomis, who administers the CMP Ratepayers Unite Facebook page.

The group, which now has 5,634 members, was formed in the wake of an October windstorm that left 450,000 customers without power, thousands of whom complained about CMP’s response and ensuing high bills. Billing complaints continue to stream in, Loomis said, despite assurances from CMP that problems are being fixed.

Herling says he’s working on it.

During a recent interview with the Portland Press Herald/Maine Sunday Telegram, Herling was both defensive and thoughtful about his company’s predicament. A 55-year-old Maine native who has spent much of his adult life working for CMP, he admitted being stung by the ugliness of the public criticism.

PRAISING METERS SEEMED TONE-DEAF

He even found himself personally at the center of one recent controversy, a misstep that to CMP’s critics underscores how tone-deaf the company has become.

In July, CMP issued a news release to note steps it had taken to harden and back up its smart-meter network, which was hobbled when power was off for days during the big storm. But before listing the upgrades, Herling thought it was important to praise the meters’ performance.

“At the height of the October wind and rain storm,” Herling said, “the smart meter system gave us excellent data on the scope of damage, and as repairs progressed, it allowed us to confirm restoration more efficiently.”

Excellent data?

It took 10 days to get everyone back online. Two days after the storm, CMP couldn’t retrieve information from roughly half of the meters. And 10 months later, thousands of customers are still stewing over poor communication and sky-high bills that they think are the result of malfunctioning meters or bad billing software.

Against that backdrop, Herling’s statement didn’t ring true to the company’s critics, and they pounced.

In early August, the state’s public advocate, Barry Hobbins, said it sounded to him like CMP was in denial. An adversary in the Legislature, Rep. Seth Berry, D-Bowdoinham, said the company should admit its mistakes to regain public trust. A resident who frequently posts criticisms of CMP on social and mainstream media was more blunt: “Doug Herling lies like a rug,” Nancy Sosman wrote.

In the end, a story intended to restore confidence in the company turned into another chance to bash CMP.

Herling cited an irony: Compared with most Maine corporations, CMP is very transparent. It’s heavily regulated by a state agency that controls its earnings, orders its managers to testify and can ask to see all its email.

“And yet, we’re probably the most mistrusted company now,” he said.

Viewed in a larger context, CMP is under siege at a pivotal time.

The growing, worldwide imperative to reduce carbon dioxide emissions is prompting a gradual transition away from fossil fuels, in favor of an economy powered by renewable energy. Climate change also appears to be producing stronger storms. Both trends argue for strong, well-supported electric utilities with robust distribution networks.

“The question is, are we creating the utility we need for the future?” said Tony Buxton, a Portland lawyer who focuses on energy matters.

Buxton said he’s “reluctant to indict” CMP. But he stressed how important it is for the company to quickly solve its billing and smart-meter problems.

“Electricity is the ultimate technology,” Buxton said. “It doesn’t wait around. It doesn’t forgive mistakes. You have to be sure things work. And when they don’t, you have to have a way to correct it.”

To regain customer trust, both CMP and the Maine Public Utilities Commission need to be more transparent, according to David Littell, a former PUC commissioner whose term expired in 2015.

“The public, taxpayers and ratepayers paid for CMP’s smart-meter system and its billing system,” said Littell, who’s now a principal at the Regulatory Assistance Project, an international group working to advance clean energy.

“These systems are integral to a modern grid. Yet what has emerged is that the public does not have access to information on how well the meters and data management systems are working.”

THREE FACTORS IN ‘PERFECT STORM’

Herling is the public face of CMP in a TV ad campaign that began Aug. 13, perhaps the company’s most visible response to the crisis. In it, Herling personally apologizes for not responding well enough to billing concerns and pledges to do better.

It’s a good ad, but coming too late, according to Felicia Knight, a public relations expert and president of the Knight Canney Group in Portland.

“CMP does seem to realize that it needs to rebuild the public’s trust,” she said. “That’s never easy and it’s never immediate. An ad is a way to begin that public conversation, but that can’t be all there is.”

In the interview, which took place prior to the ad campaign, Herling discussed the reasons he thinks CMP is taking so much flak and whether some of it is self-inflicted.

In Herling’s view, three issues have put a target on CMP’s back:

One is net metering, the arrangement by which people with solar-electric panels are compensated for the power they generate. Net metering has been a flash point in the Legislature and at the PUC. Reflecting a nationwide debate, CMP is at odds with solar installers and environmental groups over the level and shape of compensation. Media coverage, Herling said, has portrayed CMP as a villain that’s against solar, when the disagreement is really over whether net metering is an obsolete subsidy. That debate is playing out in the Legislature, the PUC and in court.

CMP also faces growing opposition to plans to build a new transmission line from Quebec through Maine to bring hydropower to Massachusetts. New England Clean Energy Connect beat out 41 other proposals in a multibillion-dollar competition. But the losing energy companies and their lawyers are now ganging up with environmental groups, Herling said, to hamstring CMP at regulatory proceedings in Maine and Massachusetts.

Herling said CMP also suffered from a “perfect storm” in October. After CMP planned for years to switch its billing system from an old mainframe computer, an intense wind and rainstorm struck precisely during a critical, four-day changeover period. Brutal cold and an increase in energy supply rates followed, leading to high bills for many customers and incorrect bills for others.

The outrage has been fanned by CMP’s detractors, especially on social media. Even last week, months later, disgruntled customers were complaining about bills they don’t understand on the CMP Ratepayers Unite page.

From Chelsey Sawyer: “Mine’s usually $140-$170, they’ve been around $300 every month since November. I’ve paid $1,500 somehow I’m still behind $700. I didn’t even use the ACs this summer because of how high the bills were without them.”

Sawyer got this reply from Michelle Emerson: “Mine was $190 this month and is usually $115 to $130. Ridiculous.”

A fact-trained engineer, Herling began work at the Wyman power station in Yarmouth in 1985. He has struggled to comprehend a realm where truth and fiction are opaque. He says he was caught off guard and is frustrated by the raw power of social media to shape the public narrative.

Herling said CMP’s news release on the smart-meter upgrades was his idea. It was a way to counter the negative press, by assuring customers that CMP was working to make things better.

Critics say it was the wrong move to declare the meter problem fixed, when many people still are wrestling with bills they don’t understand.

Herling disagreed. What most people don’t realize, he said, is that the meters worked fine immediately after the storm, until backup batteries died. They provided crucial data on outage locations. They sped up first-day response time. He wanted customers to know that.

RESPONSE ‘REASONABLE,’ PUC SAYS

Herling also stuck by statements he made last spring after an early internal audit found no explanation for spikes in customer bills, although the cause remains under investigation. And he defended CMP’s outage website during the storm, which failed to provide accurate information on where and when power was restored. That stance might grate on some people, who – seeing on the website that power had been restored to their streets – returned home from hotels only to find that the lights were still out.

Two weeks ago, the PUC’s staff concluded that CMP’s response to the storm was “reasonable,” although the case is not over.

Herling is one of three presidents in Avangrid’s Networks division, which has eight electric and natural gas utilities serving 3.2 million customers in New York and New England. He was named president of CMP last January.

A Maine Maritime Academy graduate trained in marine engineering, he has spent 35 years in various management roles at CMP and headed up the company’s $1.4 billion transmission system upgrade. In 2016, as part of the Avangrid merger, he became responsible for utility electric operations in Maine, New York and Connecticut.

Based in Orange, Connecticut, Avangrid issues publicly traded stock. Any statements from CMP that could have a material impact on trading have to be cleared at the corporate level. That has made CMP less nimble in reacting and communicating during breaking news stories, Herling acknowledged. The delay has given adversaries time to shape public opinion.

On the other hand, he said, customers benefit from the combined resources of a bigger company. It’s not much different, he suggested, from how CMP was formed a century ago from dozens of small electric companies.

But as time has gone on, the company also has gotten leaner. Under its new corporate structure, CMP no longer shares employment figures, although a recent job-listing page says the company has more than 1,100 workers.

To the company’s unionized workforce, staff trimming in recent years has left CMP less able to make timely appointments with customers and respond to emergencies, according to Dick Rogers, business manager for IBEW Local 1837.

“I don’t fault the current management at CMP,” Rogers said. “The decisions aren’t being made locally. They are being made in Connecticut or Spain. That has handcuffed them quite a bit, in my opinion.”

The harms of consolidation are amplified, for some, by foreign ownership. CMP operates as a 3-year-old subsidiary of energy services company Avangrid and its Spanish corporate parent, Iberdrola.

BLISTERING SOCIAL MEDIA ATTACKS

To rally opposition to CMP, some critics are tapping into the national vein of nativism that runs through today’s politics and culture. They are aided by Mainers’ historic suspicion of things and people “from away.”

For example: On a Facebook page for CMP opponents and in online postings of media stories, some people refer to the company as “Central Spain Power.” They post statements that are inflammatory and sometimes inaccurate.

From Tony Campbell on March 24: “Keep in mind that we are not fighting CMP, a local utility within the control of MPUC. We are fighting IBERDROLA, one of the largest power providers in the world. It’s estimated that they control power for the majority of Eastern Europe and in the last 10 years or so have taken over much of the East Coast of the US.”

From Jhophyde on Aug. 4: “A foreign holding company should not be allowed to own a monopoly on a public utility. People are choosing between buying groceries and paying their overinflated CMP bills with no relief in sight. The over billing continues while the MPUC gladhands the Spanish scammers.”

From “Seth Berry for Legislature” on Aug. 4: “CMP is owned by Avangrid, which is owned by Iberdrola, which is owned by international shareholders. They hold a monopoly – the keys to our homes and our power – because we give it to them. If basic trust is not restored soon, it may be time to take away the keys.”

Sosman, the resident who often posts criticism of CMP on social media, referred to Iberdrola in a post as “the foreign conglomerate that is wreaking havoc on Maine.”

Asked about the reason for highlighting CMP’s overseas connections, Sosman said it counters the notion that the company has the best interest of Mainers at heart, when in fact, it’s really just an investment. But upon reflection, she agreed to rethink whether using this loaded language is necessary.

“When you’re in the pit, fighting the good fight, sometime you take low blows,” she said.

FOREIGN-OWNED, BUT NOT ALONE

Herling said he sees xenophobic comments as just another way for CMP’s opponents to demonize the company. People don’t cast aspersions on other major Maine employers with foreign ownership, he observed, such as Hannaford Supermarkets, part of a chain in the Netherlands, or South African-based Sappi Fine Paper. Notably, Herling makes a point in his TV ad to mention that he’s a native Mainer.

Herling hopes a renewed effort to satisfy customers will work. He said he has instructed customer service representatives to focus on resolving billing disputes, even though many calls can take an hour.

“It’s winning back customers one at a time,” he said.

Having a chief executive take responsibility and become the public face of a company in crisis can be an effective response. It has worked in the past for CMP.

Steve Ward, who served as Maine’s public advocate from 1986 to 2007, recalls former CMP chief executive David Flanagan speaking directly to Mainers after the 1998 ice storm, which was Maine’s electric outage storm of record until last October. Flanagan helped convey the sense that CMP and its lineworkers were doing all they could to get the lights on fast.

“The ice storm was really his triumph,” Ward said. “It caused many people to feel positively about CMP, maybe for the last time.”

Doug Herling, Central Maine Power president and chief executive officer, and a native Mainer, says mistrust of the state’s largest electric utility is linked to snowballing social media attacks, unfavorable news coverage and skepticism of CMP’s foreign ownership. The 119-year-old company operates as a subsidiary of energy companies Avangrid and its Spanish parent, Iberdrola. (Joe Phelan/Kennebec Journal)

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