AUGUSTA — The Maine Senate on Wednesday narrowly approved a bill that seeks to set up a consumer-owned power utility to purchase the assets of Central Maine Power and Versant Power.

The 19-16 vote in the upper chamber of the Legislature followed a 76-62 approval by the House late Tuesday night. The bill will face at least one more vote in each chamber.

But it faces the prospect of a veto by Gov. Janet Mills, who has voiced serious concerns about the measure, and the number of House and Senate supporters isn’t large enough to meet the two-thirds margin needed for a veto override.

Sen. Rick Bennett, R-Oxford, the Senate’s lead sponsor of the measure, said Maine ratepayers have been mistreated for too long by electricity companies that are largely controlled by overseas shareholders, including government entities.

“For too long our utilities have been governed by foreign governments and foreign boards that do not understand or care about the needs of Maine people,” Bennett said. “This ownership model has been a disaster, leaving Maine with the 10th-highest utility rates in the nation and dead last when it comes to reliability with the most and longest outages in the country. These foreign powers do not care a wit for the people of Maine. They have repeatedly lied to us about billing problems, about outages, about metering, about their commitment to clean energy and now about this proposal before you today.”

Bennett also has spearheaded a bill that would prohibit foreign-owned companies from contributing to ballot question campaigns in Maine, saying the practice is an affront to the state’s right to govern itself.

The takeover bill, which has been driven in part by ongoing problems at Central Maine Power and controversy over the utility’s effort to construct a 145-mile powerline through western Maine, has divided members of both major political parties in the state while creating unlikely allies and adversaries in the Legislature.

Senate opponents of the measure included all but one of Bennett’s Republican colleagues in the Senate, as well as five Senate Democrats.

Opponents said they were not defending CMP, but they believe the shift to a publicly controlled electric utility would be too costly, take too long to implement and would jeopardize the state’s clean energy goals by putting at risk ongoing private investment in the state’s electricity grid.

“I would submit to you what we are really talking about here is a classic example of government overreach,” said Sen. Trey Stewart, R-Presque Isle. “This is nothing more than a socialist take over of privately owned companies in the state of Maine. I can’t frame it any more simply than that.”

Beyond the ideological disagreement over whether the nonprofit entity the bill seeks to create would amount to socialism or even communism – as some lawmakers have stated – Stewart said there are technical problems with the bill, adding that many of them have been noted by Mills and her administration.

The measure calls for a board of elected officials to run the nonprofit but it doesn’t require they have any expertise in managing a public utility, Stewart said. “Leaving the whole dynamic open to questions about legitimacy and questions about competency,” he said.

Mills has not directly said she will veto the measure – stopping just short of that in her remarks recently. But she has offered sharp criticism of the legislation.

“First of all there is a lot of passion behind this issue, a lot of passion,” Mills said Wednesday morning in a talk at the Portland Regional Chamber of Commerce. “Some of it is just animosity with the current providers and some of it is a passion for climate change issues and clean energy issues.”

But Mills said after reading the bill numerous times, she still has significant reservations. Mills could allow the bill to become law without her signature and will have 10 days to contemplate her options once the bill hits her desk.

Mills’ comments at the chamber event echoed points her chief of staff, Jeremy Kennedy, detailed in a memo to lawmakers Monday.

The memo highlighted the potential loss of an estimated $90 million in property tax revenue paid to municipalities by CMP and Versant Power. That $90 million dollars represents 3 percent of all the property taxes paid in Maine.

The bill actually calls for Pine Tree Power to make payments in lieu of taxes to counties or municipalities “in the same amount as those taxes would have been if the investor-owned transmission and distribution utility had continued to own the utility facilities or utility property.”

But Kennedy asserts in his memo that ” it is doubtful that the governing entity could be required to make any such payments.”

Mills reiterated that point in her comments to the chamber. She noted that attempts to make tax-exempt nonprofit entities pay a fee in lieu of taxes has never been achieved in legislation in Maine.

“You can’t make a tax-exempt entity pay something that looks like a tax, acts like a tax, sounds like a tax and is tax by just not calling it a tax,” Mills said. “That’s a serious, serious concern I have about this. I don’t want our cities and towns to lose out on a substantial property tax revenue base for their people.”

Among the other “serious concerns” noted is the ripple effect the revenue loss would have on the state’s public school funding formula, which calculates the amount of state revenue local school districts receive based on the total property value of the cities and towns in the district.

“Those towns conceivably would be collecting the same revenue but would appear to be “poorer” in relation to surrounding towns for purposes of revenue sharing and education funding, creating serious new inequities across the state,” Kennedy wrote.

Sen. Nate Libby, D-Lewiston, among the Democrats opposing the measure, said he did so not because he was defending CMP. Libby said CMP was among the top six property taxpayers in Lewiston. “There’s significant risk for a community like mine,” Libby said. “There’s risk in everything we do and it’s really a question of how much can we tolerate.”

Like Bennett, the bill’s primary House sponsor, Rep. Seth Berry, D-Bowdoinham, has been a steady critic of CMP and an opponent to an ongoing $1 billion powerline expansion through western Maine by the company and its partners, including the Canadian owned power giant Hydro-Quebec.

Berry hailed the bill in a floor speech in the House chamber ahead of its passage, saying the creation of Pine Tree Power would lower energy costs for Maine consumers and establish a more reliable system set up to serve customers and not a corporate board of directors and stockholders.

“Every month, the 800,000 captive combined customers of CMP and Versant pay monopoly rent for the use of a monopoly grid,” Berry said. “With Pine Tree Power, we will pay a lower monthly bill. Equally important, it will no longer be a rental payment, but a mortgage payment. We will save money, invest in and improve the grid, and build our own equity.”

But House opponents to the bill said the system Berry and Bennett want is nothing short of a government takeover of two private businesses and nothing less than socialism.

“We are not a communist state. We do not take businesses over, against their will, and drive them out,” said Rep. Bruce Bickford, R-Auburn. “Why don’t we take over supermarkets? We don’t like the price of meat right now. Let’s take over the supermarkets, withdraw their licenses, not let them renew any more licenses.”

The bill, L.D. 1708, would need support from at least 101 of the 151 lawmakers in the House and 24 of the 35 state Senators to overcome a veto by Mills.

In his memo, Mills’ chief of staff, Kennedy, said the notion that the issue would ultimately be settled by voters is ill conceived even though they will have the final say if the bill passes.

“The suggestion that the Legislature should ‘just let the people decide,’ does not absolve the Legislature of its duty to evaluate the pros and cons of such a consequential bill,” Kennedy said in his memo to lawmakers. “The Legislature needs to perform due diligence and understand the variety of impacts, before asking the voters to weigh in on such a complex and significant measure.”


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