Maine Regulators Move to Stop Emerging Community Choice Movement

The Maine Public Utilities Commission has rejected a bid by local and county governments to offer "Community Choice" to their residents and businesses. In a proposed ruling on the state's "standard offer," the commission refused to allow local governments to "automatically aggregate," claiming it would cause instability in the marketplace by making power companies uncertain of their market share if communities aggregated themselves after bids had already been received.

The Commission's proposed ruling threatens plans by Cumberland County and local governments in southern Maine to offer "Community Choice" for electric service to their residents and small businesses. Eleven cities and towns there, among them Portland, have passed resolutions supporting the plan. The county has formed a task force to study intermunicipal aggregation of their communities as an option when the market opens in 2000. Several communities in Cumberland County, including Portland, support the concept of bringing users together to seek a better rate.

Like many states, Maine has provided that the majority of consumers who don't find suppliers on their own will receive power from a central pool, the "standard offer." "Most of us think that competition means uncertainty for the suppliers," said Richard Rudolph, a pro bono consultant to the Community Choice effort. "But regulators support a stratified market that protects the power companies, cheap power for big business and the "standard offer" for the rest of us: this is competition for big business only. For the rest, nothing changes. We were captive to monopolies before, and to the standard offer now." Rudolph predicts that 85% of consumers may not be able to escape the standard offer without the city-county aggregation program.

Nathaniel Tupper, a leading participant who serves as town manager in Yarmouth, Maine, said he was discouraged by the regulators, but said the "sheer common sense" of the county's efforts maintains his confidence. "If I were a large company or a ski mountain, I might have very attractive offers and people competing to sell me power," said Tupper. "Do you suppose producers are going to cut their own throats in order to get my business as an individual homeowner? Those that don't join a group won't have much leverage in the marketplace."

As new unregulated power companies are already negotiating contracts with large industrial customers, proponents of the county effort were frustrated by the impression that the state regulators are more concerned about power suppliers than about consumers, and distressed that most consumers are being excluded from the deregulated market. "Waiting until deregulation takes effect to sign a contract could mean missing out on the lowest rates," wrote the Portland Press Herald's editor.

Cumberland County Commissioner Carol Granfield said the county and its municipalities would not be discouraged by the ruling, and indicated they would take their cause to the legislature in coming months. "Deregulation is going to take a long time for people to understand, so we view the Commission's decision as an initial setback rather than a defeat."

Copyright (c) 1998 by the American Local Power Project