Earlier this month, Maine’s voters rejected a referendum for publicly owned energy after a disinformation campaign led by the energy lobby. But in the US, ordinary people have beaten these interests in the past, and they can do so again.
A line worker with Central Maine Power transfers power lines from an old utility pole on September 2, 2022 in North Yarmouth, Maine. (Derek Davis / Portland Press Herald via Getty Images)
Earlier this month, the people of Maine decisively said no to publicly owned energy. If they had voted yes on Question 3, which was on the ballot on November 7, they would have authorized their state to take over Central Maine Power (CMP) and Versant, the two major private electric utilities in the state, and replace them with the consumer-owned Pine Tree Power Company. Instead, following a massive propaganda blitz by CMP and Versant, Mainers rejected Question 3 by a seventy-to-thirty margin.
In 2021, Pine Tree Power did not even make the ballot after Democratic governor Janet Mills vetoed a bipartisan bill to put the question to a popular vote.
Opponents of the bill made several assertions in their attacks against Question 3. They argued that the legal wrangling following a successful takeover bid would be costly, that these costs would have to be footed by the taxpayer through a large public borrowing campaign, and that all of this would delay more pressing issues, such as addressing climate change. But ultimately, the lobby against the bill relied on the argument that political control over public energy utilities would lead to corruption and mismanagement.
The fearmongering around public governance of Pine Tree Power reflected a basic hostility toward democracy. Instead of absentee control by Iberdrola (the Spanish energy company that owns CMP) and the city of Calgary, Canada (the owner of Versant), the board of Pine Tree Power, as proposed, would combine popular accountability with industry expertise. The people of Maine and their elected representatives would set rates and decide on how much to invest in conservation and efficiency. Many power systems, including in Sacramento, California; Omaha, Nebraska; and Eugene, Oregon, have had elected boards for decades, with good results for the public.
Debt is a basic part of the utility business model. Power companies borrow money to build and upgrade their systems, and electric rates cover the principal and interest payments. In the case of Pine Tree Power, the people of Maine would borrow money to acquire valuable power systems and pay off the debt over time.
Indeed, Pine Tree Power would save residents money. It would not have to send tens of millions of dollars in dividends annually to the Spanish and Canadian owners of CMP and Versant and, as a public entity, would enjoy an exemption from federal and state taxes, as well as access to lower-cost credit.
The people of Maine have ample cause to be dissatisfied with their energy provision. CMP and Versant are consistently two of the lowest-rated utilities in the United States, according to customer surveys by J. D. Power. Mainers served by the utilities experience among the most frequent and longest outages of all electric customers in the nation. This abysmal service cannot be blamed solely on Maine’s heavily forested terrain and harsh winters. The reliability record of utilities in neighboring states in New England is significantly better.
On top of poor reliability, CMP and Versant charge high rates and burden many customers with unaffordable bills. This spring, CMP and Versant sent disconnection notices for unpaid electricity to more than sixty thousand and thirty thousand customers, respectively.
The status quo in Maine, and much of the country, is sustained by structural factors. CMP and Versant are monopolies, and their controlling shareholders seek higher rates and lower costs, which translate into larger profits and less dependable service. While the two private monopolies are regulated by the Maine Public Utilities Commission, the commission is made up of political appointees with far fewer resources than the massive multinationals they try to oversee. The system facilitates private extraction with a patina of public oversight. Their massive outlay to defeat Question 3 should surprise no one.
Struggles for publicly owned energy in the United States have long been hard fought and not won easily. The recent defeat of Question 3 should be seen in this context. Victories against the giant corporations that control energy across America have, however, been successful, even under the leadership of politicians who were not committed to full public provisioning of power.
The federally owned and operated Tennessee Valley Authority (TVA), founded in 1933, was the product of more than fifteen years of struggle. The development of hydropower on the Tennessee River was a defining political issue of the 1920s: the federal government had started building a hydroelectric dam and fertilizer plant at Muscle Shoals, Alabama, during World War I.
As the war came to a close in November 1918, what, the public asked, was to be done with this project? In the early part of the decade, the industrialist Henry Ford was unable to get his hands on it, and two bills sponsored by Senator George Norris to create a TVA-like power agency were passed by Congress but vetoed by presidents Calvin Coolidge and Herbert Hoover in 1928 and 1931. But Norris and public power ultimately triumphed.
In May 1933, President Franklin Roosevelt signed the bill establishing the TVA. The TVA became one of the largest generators of electricity in the United States and helped develop one of the most backward parts of the nation.
Creating the Los Angeles Department of Water and Power, the largest municipally owned utility in the United States, was not easy. Starting in the early twentieth century, supporters fought for decades to build an all-municipal power system and finally succeeded in 1936 when the city bought out the last private power company serving Angelenos.
Much like how Versant and CMP poured nearly $40 million into fighting Pine Tree Power and greatly outspent its supporters, private utilities a century ago waged a massive propaganda campaign against public power. The “power trust” targeted elected officials, the press, educational institutions, and the public. They even produced a children’s book, The Ohm Queen, to persuade kindergarteners of private utilities’ virtues. The Federal Trade Commission concluded “no campaign approaching it in magnitude has ever been conducted except possibly by governments in war time.” Yet, thanks to popular organizing and determined political leaders, the power trust lost many big fights.
More recently, the New York State Legislature in May of this year passed the Build Public Renewables Act, after a four-year grassroots effort and earlier unsuccessful attempts. Now, the state-owned New York Power Authority, created during FDR’s tenure as governor of the state, can build and operate large-scale renewable energy plants.
As in Maine, not all public power fights ended in victory. In 2011, Boulder, Colorado, initiated a public takeover of its private electric utility, Xcel Energy. But after a decade of fierce resistance from Xcel, voters opted to end the process in 2020. Despite defeat, the city secured important concessions from the utility, including commitments to reducing greenhouse gas emissions.
For supporters of public power in Maine and across the nation, the outcome on November 7 was a setback. But history should give them hope. Pine Tree Power should not be dismissed as a lost cause but embraced as a cause not yet won.Original post