Mark Isaacson

The Central Maine Power Company has lost its way.

Every business exists to make a profit, but great companies do so with a strategic vision of how the world is evolving and the role they will play in shaping that evolution. One hundred years ago this would have been a good description of CMP. Today, CMP exists only to maximize the immediate return to its owner in Spain.

During my career the role of the electric utility has progressed from important to critical. We are now at the point where the response of the electric utilities to climate change and the demands of beneficial electrification (think electric vehicles and heat pumps) is the single most important factor in the survival of human civilization.

To preserve our civilization, we need to decarbonize it fast. The only means at our disposal to accomplish this goal is electricity from non-carbon sources:  renewables and nuclear. To decarbonize in Maine, we will need to generate three times as much electricity as we consume now, and the utilities must move that electricity from where it is generated to where people live and work.

CMP’s unreliability and poor response to its all too frequent outages, its hopeless billing system, its terrible customer service, and its plodding approach to solar deployment are all enormously frustrating. Whether they constitute sufficient cause for unwinding the company’s exclusive franchise may be debatable. However, its totally predictable and insufficient response to the challenge of beneficial electrification constitutes far more than adequate cause to replace its monopoly. It’s a necessity.

I have worked with and across from CMP for more than 40 years. Some things the company used to do well and some things it has never done well and never will. An example of the first is that it used to be good at responding to fast-moving emergencies like the 1998 ice storm. An example of the latter is that it has never upgraded the grid with the urgency and creativity now required.

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CMP’s corporate culture will not triple the size of the grid over the next 30 years as we need it to do, and the company’s go-slow approach will still be enormously expensive. CMP will spend a lot of our money without accomplishing our fundamental purpose.

Some say that private companies are models of efficiency while nonprofits are the opposite. This is simply not true. The culture of any organization reflects its leaders. An agency led by intelligent people whose vision aligns with the needs of the times will produce good results. The same is true for a private company.

However, it is nearly impossible for a regulated monopoly to respond efficiently to these needs. Regulated monopolies operate under perverse incentives: the more they spend, the more they earn; rewards to their personnel are asymmetric — screw up badly and you get fired, produce brilliant results and you get only a pat on the back; the company overbuilds with ratepayer money to avoid situations where it could make a mistake, and so on.

CMP’s “vision” is simply one of persuading the Public Utilities Commission to let it spend as much of our money as possible.

Tripling the size of the grid will cost billions. No one knows how many billions, but we do know that the carrying costs for all that debt will be less than half if undertaken by a consumer-owned utility with its lower interest rates than if done by CMP with its market interest rates and dividend payments to its shareholder. Anyone who thinks that CMP’s “efficiency” will make up this discrepancy has not been paying attention: no capital-intensive business is that efficient, and certainly CMP is not.

Anyone who thinks that putting this debt on CMP’s books will protect ratepayers from CMP’s mistakes has also not been paying attention. The ratepayers pay for everything, including the utilities’ mistakes. We would be far better served to get the debt service savings that comes with public ownership. Beyond that, a consumer-owned utility might succeed in building the grid we need.

Mark Isaacson of Cumberland grew up in Auburn, and has been in the energy business in Maine since 1980. In the 1980s he developed the 19 MW Worumbo Dam. He was a founding partner of Competitive Energy Services, Kennebec Valley Gas Company, GridSolar, and Beaver Ridge Wind.


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