Advocates Urge PUC to Protect Ratepayers
September 16, 2024 (Augusta, ME) — The plan to take Maine’s largest utility private is raising serious concerns about the impact on electricity customers and the role of utilities in helping the state meet its clean energy goals.
Iberdrola’s $2.5 billion buyout of public shares of Central Maine Power’s (CMP) parent company Avangrid will be considered by the Public Utilities Commission (PUC) at its September 17th meeting. According to state law, the PUC must sign off on utility acquisitions.
Maine’s Public Advocate Bill Harwood along with the state’s leading environmental advocacy group, the Natural Resources Council of Maine, have repeatedly called on utility regulators to fully investigate the impact on ratepayers. However, CMP and Avangrid have petitioned for exemption from review, asking the PUC to waive its approval authorities.
“The deal would result in an enormous loss for public transparency, making it even harder for citizens, reporters, and regulators to hold our utilities accountable and understand how the needs of Maine customers may or may not be taken into account by one of the biggest energy companies in the world,” said NRCM clean energy expert Rebecca Schultz.
Spanish giant Iberdrola is proposing to acquire Avangrid’s remaining 18.4% public shares, consolidating its control as the sole 100% owner of the company and its Maine subsidiaries, which include CMP and Maine Natural Gas.
For example, CMP’s parent company, Avangrid, would no longer have to file detailed financial information with the U.S. Securities and Exchange Commission, substantially reducing the public’s ability to scrutinize the company’s business activities, including spending, profits, risk, and executive compensation.
By eliminating public shareholders, the deal would also eliminate the only check on Iberdrola’s otherwise unfettered authority.
Recent changes to the law in question require the PUC to apply a higher “net benefit” standard to reorganizations that involve a change in control and ownership of a public utility or its parent, such as what has been proposed by Avangrid. Whether the Commission will apply the higher standard to safeguard the interests of Maine customers is one of the issues the PUC is expected to rule on Tuesday.
The extreme weather and flooding Maine has experienced in recent years heightens the concern about the company “going dark,” advocates say, because CMP’s owners appear to be focused on profit-driven corporate maneuvers rather than bread-and-butter utility operations to improve resiliency, strengthen the grid, and rapidly bring on new clean energy across CMP’s service territory in Maine.
“Negotiated at the above-market price of $35.75 per share, the buy-out already represents the interests of investors. What has not been taken into account so far are the interests of Maine customers, especially low-income families,” said Schultz.
“Instead of focusing on improving utility operations and investing in the resilient clean energy grid we need, CMP’s parent companies are playing financial games, consolidating power and profits at the top. Our regulators need to make sure the interests of Maine ratepayers are served by this latest corporate maneuver.”
