Richard Bennett, former chair of the Maine Republican Party, outlined in the Sun Journal (May 24) the brutal legal offensive unleashed by Central Maine Power and its U.S. parent, Avangrid. Bennett noted CMP “has filed suit against its customers to deny them the right for self-determination in a citizens’ initiative” and that this “is a shocking development in the CMP corridor debate.”
These outlandish actions are supported by its board of directors, including John Baldacci, former governor of Maine. Baldacci earns $200,000 per year as Avangrid’s vice chair while employed as senior adviser at Pierce Atwood, the lobbying firm. Last year CMP paid Pierce Atwood $3.2 million to represent CMP’s interests at the Maine Public Utilities Commission.
This may be business as usual, but it is not business in the interests of Mainers and our future.
The suit comes quick on the heels of a blistering marketing campaign that said, if I don’t vote for the corridor, I am going to be directly responsible for the further demise and hard times of the lobster fishery and the blueberry crop. Not allowing a transmission line to dissect Maine’s western mountains will wipe out lobsters in Cutler.
The suit and the campaign are designed to pave the way for CMP’s U.S. parent, Avangrid, itself 81.5% owned by Iberdrola of Spain, to reap significant profits by selling hydro power from Quebec into the Massachusetts market.
As former Republican state Sen. Tom Saviello wrote (Sun Journal, May 3), the use of hydro energy from the vast region of northern Quebec increases greenhouse gas emissions. Saviello notes the corridor will benefit Avangrid to the tune of $60 million annually for 20 years. Hydro Quebec will earn revenues of nearly $500 million per year.
Hydro Quebec, 100% owned by the Provincial Government of Quebec, pays a yearly dividend to the Province, which totaled $1.7 billion in 2018.
The transmission line will generate significant profits for CMP, Avangrid, and Iberdrola, while leaving a mess in Maine.
It is important to note that Iberdrola books 81.5% of these profits. Avangrid is merely a pass-through conduit for cash heading to Spain. This flow of money out of Maine is sanctioned by the Maine Public Utilities Commission.
The business of regulated electric utilities in Maine is a piggy bank owned by foreign shareholders and filled by robbing Maine ratepayers.
Iberdrola loves the profitability of CMP. CMP’s net income margin is around 15%, Iberdrola’s, around 9%. The child outperforms the parent. That may be why Iberdrola sent its man from Spain last February to get the kids in line. As reported then, Pedro Alvarez Blazquez, chief development officer of Iberdrola and Avangrid board member, pleaded with Mainers to forgive and forget and move on.
His comments were patriarchal and condescending, “Let’s forget about what has happened. We just need to move on. We are very happy with CMP.”
Happy until now, and they sue us. CMP fills Iberdrola’s coffers and we have the cheek to question a transmission line that will profit the parent and leave the child with power outages.
If Mainers want to meet the challenge of Gov. Janet Mills’ Maine Climate Council, we need to own our grid, plow our profits back into the network, and access growth capital at much lower rates.
Electric utilities operate under the authority, and at the discretion, of the people of Maine and its PUC. A diverse coalition of Mainers are working to create the Maine Power Delivery Authority and to place the assets of both CMP and Versant into a consumer-owned utility, thereby lowering costs, improving service, promoting renewables, and keeping profits in Maine.
If we ditch the investor-driven model, we can keep Maine power for businesses and Maine people.
Sam May is a former Wall Street analyst with significant experience in both Silicon Valley and Hong Kong. He lives in Portland.