Rep. Seth Berry on the Movement for Publicly-Owned Power in Maine — Episode 140 of Local Energy Rules

I’m John Farrell, director of the Energy Democracy Initiative at the Institute for Local Self-Reliance and this is Local Energy Rules, a biweekly podcast sharing powerful stories about local, renewable energy. This episode was originally published on ILSR’s Building Local Power podcast in August 2021.

Joining me today is Representative Seth Berry, he’s in the House Chair of the Legislature’s Joint Standing Committee on Utilities, Energy and Technology in Maine. He’s been working on some terrific legislation that we’ve been following and I’m so glad that he can join me today. Seth, welcome to the program.

I think other abiding interest from me that led me to this, and it really intersects with all three besides energy, I’m also very interested in social equality and economic equality, and spent 20 years in public education in a large part for that reason. Huge believer in the transformative value of education as well. And then closely related of course, democracy, and just having a very strong democracy. I spent some time as an intern in Congress as a young person and was very interested in the democratic process from an early age. So for me, the issue of customer control, consumer control of our monopoly energy utilities is really a place where all three of those things intersect. I think for me the overriding concern is the climate catastrophe that is upon us and that we need to take immediate action to prevent, but right there with it is economic equality, how we make this transition and adjust in equitable fashion. And also democracy because these decisions will impact all of us and we should all have a say in them. So obviously this is all very closely related to your work, it’s been great to have ILSR as a partner in this effort so far. Looking forward to what comes next.

Now, I saw that when I first came into the legislature back in 2007, and we’ve been fighting them on that ever since. They’ve been the 800 pound gorilla. They almost successful repealed net meter, actually did successfully repeal net metering under a previous governor and then we managed to restore it when Governor Mills took office back in 2018. So, this constant battle over the efforts of folks to have a little bit of local control through things like rooftop solar and efficiency. And then stepping back further, just an atrocious job of doing their job, the basic things that we expect of a utility. You keep the lights on, you keep the bills low, you answer the phone when a customer calls. They have failed to do any of those things well. In fact, we have, as a state, the worst reliability in the nation, bar none, that means the longest and most frequent outages, worst reliability. So they’re not keeping the lights on, we have the 10th highest rates in the nation, so they’re certainly not keeping the bills low. In fairness, we are restructured, so some of that is the competitive supply market and it’s hard to disaggregate the rates in comparing state to state. But more than half of our bill is simply the delivery, which is all that they were in charge of. And that portion of the bill has increased and increased. So 10th highest lowest reliability and satisfaction, are the customers happy? Absolutely not, worst customer satisfaction in the nation for CMP three years running, in fact. That’s on the JD Power Survey which is the industry recognized standard for customer satisfaction, it’s affiliated with consumer reports. And Versant, third worst in the nation.

So there’s 142 large and mid sized utilities across the country, consumer and investor owned, and we have the worst and the third worst in the nation. So there’s no question that the people of Maine are fed up with these utilities and their poor performance. And I believe the people of Maine also understand what’s really driving it, which is some larger economic and governance issues that we can talk about more.

These small consumer utilities in Maine are far more reliable, have for better customer satisfaction and far lower rates than or investor run utilities, and that same comparison holds true if you look across the country, especially at munis. Obviously co-ops are very, very rural and have some significant cost drivers, so it’s a little hard to compare there. But here in Maine, the two investor run utilities charge 58% more than our non consumer run utilities, which serve part or all of 97 towns. 58% more, that’s a very significant thing, especially for our lower income Mainers who pay one in four of their meager dollars on energy. Very significant for our industrial sector, we have businesses like paper mills are very traditional here. Our larger paper mills’ costs go up a penny per kilowatt hour, and they’re paying two million more per year. We have a large ship building facility here, Bass Ironworks, costs go up a penny per kilowatt hour, they’re paying a million dollars more per year.

So from the point of view of business prosperity and job creation and certainly from the point of view of economic inequality, we’ve got to get this right if we’re going to shift ourselves onto a total dependence on electricity. The plan is to electrify everything, that’s how we decarbonize, the only way we decarbonize really is we electrify everything. We switch to electric vehicles, we switch to heat pumps to heat and cooL our buildings, we switch to electricity to power our factories, and we make sure that that electricity is renewable. But the grid is a monopoly. The wires running down your streets have to be a monopoly, it’s the only safe way to get it to you. You can’t have two sets of wires on the street. So that monopoly can be owned and control for the customers and by the customers, or by and for someone else far away. And increasingly, we’ve seen that that someone else is farther and farther away and less and less caring about the needs of the customers. So consumer ownership is proven nationally 13% lower rates, twice the reliability, far better customer satisfaction if you’re looking at munis in particular which is what we propose. And our proposal is to create the Pine Tree Power Company, which would be a large municipal hybrid serving the 800,000 customers here in Maine who are currently served by investor run utilities. We would buy them out, the bill proposed is a referendum component, so first it goes to the people and once the people have ratified the proposal, we move forward with the process. Then the first step after ratification is another election where we elect the board of the utility and that seven member elected board chooses some additional expert advisory members, they hire staff, they do some additional due diligence and business planning, and then they make their first move of course which is the initial offer to purchase the utility. That price is either negotiated, or if necessary litigated, we have a process for that. And then once the switch is made, a private operator, who is competitively contracted, takes over the operations of the grid.

So we’ve been working on this for three years. We’re very excited about the opportunity that it presents to really but Mainers in charge of our energy future, to have a democratic energy sector. That platform, that monopoly platform that delivers all of the solutions, whether they’re efficiency or demand reduction or aggregated demand reduction, which there’s some fascinating opportunities once you involved internet of things, clean energy future, obviously more generation, obviously more storage. We need all of that, we need a huge competitive, innovative set of solutions to bring that clean energy to us. And the grid stands between us and those solutions. So having it be noncompetitive, having it be not for profit, having it be democratically governed, it’s all incredibly important to making that democrat affordable clean energy future possible.

There is this state regulator thing, we do have state regulators and they can exercise some control over rates, so I want to be clear that this is not the kind of monopoly that can absolutely wreak havoc unrestrained, but let’s remember too that state regulators were actually established by the utility industry. It was in the early 1900s when Samuel Insull, the heir to the Edison empire, decided that he was going to pitch to all of his colleagues and competitors at the National Electric Lighting Association annual meeting the idea that they restrict themselves to fully monopoly territories and in order to justify that monopoly in the age of antitrust they said, “We’ll create state regulators. And we know that we will be able to work to do quite well within that model, we’ll have guaranteed profits, let’s go out and do it.” And they sure did. They went out and they convinced legislatures across the country to create public utility commissions and public service commissions to “regulate.” But for the last 120 years, they’ve basically rigged the regulatory system, and these state regulators are everyday more and more puny with respect to the massive multinational monopoly corporations which own and control these state by state utilities. So Maine’s situation is very similar to the situation of others. Avangrid and Iberdrola own several other utilities here in the Northeast, for example. They’re looking to buy a utility in New Mexico right now, P&M, which is also in part of Texas. And they have some very big plans for that region. So yeah, there is an incredible consolidation that has happened in the industry. Maine is now less than 2% of Iberdrola’s holdings, and our regulators are really the mouse where Iberdrola is the cat. The tables have turned, if they ever were right side up to begin with, and the game of cat and mouse is inverted so that there’s so many ways that they can escape meaningful regulatory intervention, whether it’s by hiding the ball or by lawyering up and threatening to sue or clever engineering and clever work of the tax code. They’ve really got us right where they want us, and the only way we break free of that is to change the business model.

Hey, thanks for listening to Local Energy Rules. If you’ve made it this far, you’re obviously a fan and we could use your help for just two minutes. As you’ve probably noticed, we don’t have any corporate sponsors or ads for any of our podcasts. The reason is that our mission at ILSR is to reinvigorate democracy by decentralizing economic power. Instead, we rely on you, our listeners. Your donations not only underwrite this podcast, but also help us produce all of the research and resources that we make available on our website and all of the technical assistance we provide to grassroots organizations. Every year ILSR’s small staff helps hundreds of communities challenge monopoly power directly and rebuild their local economies. So please take a minute and go to ilsr.org and click on the donate button. And if making a donation isn’t something you can do, please consider helping us in other ways. You can help other folks find this podcast by telling them about it, or by giving it a review on iTunes, Stitcher, or wherever you get your podcasts. The more ratings from listeners like you, the more folks can find this and ILSR’s other podcasts, Community Broadband Bits and Building Local Power. Thanks again for listening. Now, back to the program.

So we’re stuck and the utilities have perverse incentives just by virtue of doing their job, which is to maximize return to shareholders. They will say no or actively fight against certain innovative solutions, especially in the distributed space, especially those that reduce their ability to justify new overbuilding of the grid, new expenditures and big centralized systems, whether it’s transformers or very lucrative high voltage lines, sub stations. And in the case of utilities that own generation, big new centralized plants. That’s the traditional model they’re comfortable with. Some of it, of course, is just institutional inertia, where it’s the way we’ve always done it and we’re going to keep doing it that way. So we need to shake up the system for that reason as well, but a lot of it is this perverse incentive and lack of democratic governance that really leads to these kinds of behaviors to prejudice the utilities against the kinds of solutions that we’re going to need for a just and equitable transition.

So we believe Maine is an optimal place because of the frustration with our utilities, because of their historic resistance to renewables, because of their just incredibly lackadaisical attitude towards improvement and the frustration that’s palpable across the state of Maine. We believe that Mainers will see the need to take back our power and to have a say in this critical moment as we shift to clean energy and become dependent entirely on this monopoly grid. So we’ll be collecting signatures this fall, the Our Power Coaliltion is very interested in collaboration and support with others, but we are primarily just, entirely actually, just a Maine based coaliltion right now. We have a growing membership list of people signing up at this moment to circulate petitions and gather signatures this fall. We plan to bring it to the voters in November of 2022, and there’s a process that you have to go through leading up to that. You turn in the signatures, you get a hearing, and at the state house there’s an opportunity for the legislature to vote. But our plan would be to get it directly to the voters, and we’re very confident that that will be possible and that the outcome will be favorable.

And it’s not the same effort at this time, but these two efforts are really converging I think around what are the networks of our future going to look like? And they do come together, and I mentioned earlier the internet of things, they really come together there. There’s a need in managing an efficient and secure and environmentally sensitive energy network to have information flowing rapidly across the net so that dishwasher can come on when it’s advantageous for them to come on or not, so that heating and cooling systems can be controlled in an aggregated way. And there are massive implications around the security of our information, around the opportunity there to bring down cost add make for a more equitable transition around democratic governance and transparency and how those decisions are made. It is, I think, an uncertain future, but it’s clear where we’re heading, and we really need to make sure that that’s democratic governance as we do move in that direction. One last thing I’ll say is, as I mentioned, the utilities need to have communications infrastructure themselves. They are already stringing fiber on their poles for their own purposes to manage their own grids, and those fiber lines, as I mentioned, have incredible spare capacity, so there’s no reason that some of that capacity couldn’t be shared much more than it is today for the purpose of municipal fiber networks or other locally owned broadband utilities. So I’m very excited about that opportunity and I think we haven’t fully even begun to understand just where all the opportunities are there, but we know that there’s gold in them there hills.

And I want to offer some hope to folks that may feel that way. If you look at the six cities in the nation that arrived at 100% renewable electric first. Those six places were all served by consumer utilities. I can name them for you. Georgetown Texas, Greensburg Kansas, Burlington Vermont, Aspen Colorado, Kodiak Alaska and Rockport Missouri. Four of those, by the way, conservative areas, conservative communities that got to 100% renewable electricity first. And you know what John? This is going to blow your mind, all six of those are served by consumer owned utilities, all six. And what are the chances of that? As I mentioned COUs only serve one in three Americans, so the chances are pretty astronomical that all six of the first communities to get to 100% would be consumer run utilities. But there it is, those six were the first, all of them before 2016, by the way, before Trump was even elected. And look at large utilities, look at the nation’s leading large utility in the race to 100% renewables. It’s SMUD, it’s the Sacramento Municipal Utility District. And don’t you love that name, SMUD? It just has a ring to it. SMUD has seven elected board members, it has a pretty large service area, 1.5 million customers, many of them in rural parts outside of Sacramento, a couple different counties. They’re going to get to 100% renewables by 2030. And this isn’t a goal, this isn’t aspirational. They have a plan, they’re actually clear that they will get there. And that is the kind of game changing leadership that we need.

Now, SMUD and those other six communities I mentioned, they already had consumer ownership, they didn’t have to fight for it like we do. But if Maine can actually, first state since Nebraska in the 1930s, to actually change the whole business model of the state to 100% consumer owned utilities and through that to have democratic governance, to get to a just and rapid transition, we believe Maine can be the first state to get there with this business model, then I think that’s going to bring hope to others as well. We’re going down a path that is understood. These other communities have done it. But to do it with the change of a business model, to do it with an actual breakup of the rigged, regulatory monopoly system that we have now, and to take back our power, that is what we’re proposing to do here in Maine, we need support. Because I’m going to tell you right now, the Edison electric empire, there’s a large trade association called EEI, they’re very concerned. They’re watching, they’re listening to this podcast, they’re getting ready to spend hundreds of millions of dollars to oppose our effort. And we believe we can stand up to that. We’ve seen communities stand up to that kind of pressure before. I mentioned Winter Park Florida, Jefferson County Washington. This can be done, but on this scale, at this time, for all the reasons we’ve talked about, the stakes could not be higher and we really would love to have support from other parts of the country. If folks want to get in touch, they can go to ourpowermaine.org and check it out. Sign up, donate. We’re going to need all of that and then some. Move to Maine, help us collect signatures. It’s a great place to live in the winter time. And what I hope for from others is that you can help us, yes, but also that we can help you. We really want to be an example and be, they talk about the states as the crucibles of democracy, opportunities to innovate and to try new policies and see what works. And we think that Maine can really be an important opportunity to learn and potentially to learn about a transformative path that more communities and states can take in the near future.

Local Energy Rules is produced by myself and Maria McCoy, with editing provided by audio engineer Drew Birschbach. Lisa Gonzalez edited the original Building Local Power podcast. Tune back into Local Energy Rules every two weeks to hear more powerful stories of communities taking on concentrated power to transform the energy system. Until next time, keep your energy local, and thanks for listening.