Transmission and distribution utility accountability signed into law by Governor Mills

Governor Janet Mills signed into law LD 1959, An Act To Ensure Transmission and Distribution Utility Accountability. This was arguably the most significant piece of legislation worked on by the Joint Standing Committee on Energy, Utilities and Technology (EUT) this session. The Governor’s signature on this legislation comes after a rocky path forward this session, but one where agreement was made in the final hours of the 130th Legislature. LD 1959, when reported out of committee, had these three reports:

• Report A: The “Ought To Pass As Amended” report was signed by Senate Chair Mark Lawrence, Sen. Eloise Vitelli, Rep. Melanie Sachs, Rep. Scott Cuddy, and Rep. Paige Zeigler.
  
• Report B: The “Ought To Pass As Amended” report was signed by House Chair Seth Berry, Rep. Nathan Carlow, Rep. Nicole Grohoski, and Rep. Chris Kessler.
• Report C: The “Ought To Pass As Amended” report was signed by Sen. Trey Stewart, Rep. Steven Foster, Rep. Chad Grignon, and Rep. Nate Wadsworth.

 
Report A, the Governor’s version of the bill, passed through the Senate back on April 19 with a vote of 19-15. As it made its way to the House, where this bill had some tense moments, it appeared that the majority could not reach an agreement. Report A was voted on in the House and failed by a vote of 51-83. The House Chair of the EUT committee, Rep. Berry, then moved forward Report B, his version of the bill. That report failed by a vote of 36-98. Rep. Berry then moved to table LD 1959, and his tabling motion failed by a vote of 36-98. There was then a motion from the Republican Leader in the House, Rep. Kathleen Dillingham, to indefinitely postpone LD 1959, which passed by a stunning vote of 100-34. In the end, LD 1959 was placed in non-concurrence between the two legislative bodies, as it made its way back to the Senate.

The drama around LD 1959 continued when it returned to the Senate, where a motion was made for senators to “recede and concur” with the House’s action to indefinitely postpone the proposal. This motion was made by Sen. Trey Stewart, who serves as the Republican lead on the EUT committee. This motion initially passed by a vote of 18-16, which would have defeated LD 1959. However, some members of the Senate democratic caucus realized they had made a mistake, so Sen. Cathy Breen, who was on the prevailing side of this vote, asked the Senate to reconsider. Her request was successful. LD 1959 was then tabled to see if an agreement could be reached.

It was at this point that most Democrats were finally able to come together and reach an agreement on LD 1959. A floor amendment was introduced after everything had transpired to try to get more legislators supportive of the measure. The floor amendment sets forth that, by October 1, 2022, the Public Utilities Commission shall initiate an inquiry to assess the use of competitive procurement methods for purchases by transmission and distribution utilities.

Along with this amendment, there were some additional improvements made to the legislation before it was passed and signed into law by the Governor. At a high level, this legislation requires Maine’s two electric utilities to submit report cards to the PUC based on a number of performance metrics for standards. If the utility does not meet the standards for one year, a $1 million fine will be imposed. The timeframe for penalty in the original draft of LD 1959 was based on a failure to meet the standards for two quarters. The Maine State Chamber expressed its concerns to this as we did not feel it was an adequate period of time. Therefore, we appreciate the change to LD 1959 to increase the time period. The law also states that, if the utility consistently does not meet these standards, the PUC may force the sale of the asset – a point that still concerns the Maine State Chamber. The final legislation also has a new section on integrated grid planning, which attempts to protect the grid from any climate change effects and help new energy come online without any issues.

The Maine State Chamber of Commerce testified at the public hearing “neither for nor against” the legislation. To summarize, we wanted to make sure that the metrics being used for service quality are objective and not subjective. We also felt that it should be a longer period before a potential fine from the PUC. Two quarters is not a long enough period to be graded, especially in a climate like Maine’s. We would have liked to see a longer period or rolling average during a 12- to 18-month span. And lastly, forcing a company to be sold should raise concerns for the whole business community.

The language needs to clearly define what would cause an adjudicatory proceeding from the PUC. Because the language was vague, we asked the committee to carefully consider guidelines for this. Our electrical infrastructure is critical to Maine businesses that rely on the transmission utilities every single day to bring electricity to their business so they can operate. We recognized this legislation targeted two specific Maine companies, but in the future, it could be any other sector of Maine’s business community. It is important to also highlight that the sale of an asset would be conducted through the PUC, with no plan for shareholder compensation. It is just and fair that, if the state is forcing a business to be sold, the business should be the one conducting the sale – not state government or, in this case, the PUC.

While the outcome of LD 1959 was an improvement from the original form, there remain some concerns about the impact this could have on Maine ratepayers when they continue to struggle with high electric costs. While the legislation is better, it is far from perfect. For more information about energy legislation, please contact Ben Lucas by calling (207) 623-4568, ext. 111, or by emailing [email protected].