July 2, 2021
Governor Janet T. Mills
1 State House Station
Augusta, ME 04333
Re: LD 1708, An Act To Create the Pine Tree Power Company, a Nonprofit Utility, To Deliver Lower Rates, Reliability and Local Control for Maine Energy Independence
Dear Governor Mills:
On behalf of the residents and businesses within our collective communities throughout Maine, we respectfully request that you leave unsigned and veto LD 1708, which bill was narrowly enacted by the Maine Legislature on June 30, 2021. We believe such a veto is in the best interest of all Mainers.
As you can imagine, as a group of mayors representing diverse communities from across the State, there are a number of areas where we do not agree. However, with respect to the pending proposal to take over Central Maine Power and Versant Power and replace these entities with a quasi-governmental authority empowering elected officials to manage our critical electric grid, we stand strongly united in our opposition to this proposal. Many of the reasons for our opposition have been articulated by you and your staff over the past several weeks, and we strongly agree that this legislation has been rushed through and leaves many serious, unanswered questions.
We are particularly worried about the likelihood that this legislation will trigger years of costly litigation, carries a multi-billion dollar price tag associated with taking over CMP and Versant, and has a high likelihood of raising electric rates on Maine businesses, residents, and municipalities. These are not minor risks, and the net effect is that Maine is likely to fall behind on necessary investments in grid reliability, transition to beneficial electrification, and grid modernization needed to interconnect distributed renewable generating facilities.
Closer to home, we are very worried about the very real possibility that critical property taxes paid by CMP and Versant to support essential municipal services will be diminished, or eliminated. As you know, these entities are far and away Maine’s two largest property taxpayers — contributing nearly $90 million per year in 2019, and even more today and into the future as the grid expands. We also understand that LD 1708 was modified on the morning of its final enactment by a last-minute floor amendment that was actually developed much earlier, but never publicly released until the morning of June 30. That amendment provides that the new quasi- governmental authority would be required to pay property taxes as though it was a private company; however, as we are painfully aware, this and any other promise by the Maine Legislature can easily be scaled back or eliminated by future Legislatures as has been our experience with the Legislature’s longstanding failure (until this year under your leadership) to meet the voter-initiated requirement to pay 55% of General Purpose Aid for Education or its frequent actions to slash Municipal Revenue Sharing obligations in order to close state budget gaps.
We believe the risk that property tax promises under LD 1708 will not be met are magnified by the fact that the bill applies to just one, single entity that would, nearly uniquely among government entities in Maine, be classified as taxable. Changing tax policy for a single entity is much easier than changing tax policy for large classes of taxpayers. In fact, such a scaling back of local property tax contributions for a similar power authority is currently in the works in New York with regard to the Long Island Power Authority, which serves as the model for LD 1708. That Authority was required by statute to make payments to local municipalities, but in order to reduce the financial impact on the Authority, the New York State Assembly developed the “LIPA Reform Act” to scale back these local contributions, among other needed changes. The Maine Legislature could readily pass a similar “reform” act in the face of public pressure to lower electric rates, or to meet unexpected financial constraints triggered by a storm or other unexpected catastrophe. With a single stroke of the pen, the promise to pay local property taxes could be eliminated, leaving local taxpayers to make up the difference with tax increases or budget cuts. That is a risk we are simply not willing to take, nor can we ask our constituents to take this risk.
Very simply, LD 1708 represents one of the most significant, costly, and risky pieces of legislation that the Maine Legislature has ever considered, and the decision to move forward should only be done with a full understanding of these risks. Rushing such a monumental bill through that this time, with limited public debate, would be unwise. In this regard, we very much appreciate many of the concerns you and your office have articulated with regard to LD 1708, and we believe these concerns justify the issuance of a veto at this time.
Mayor of Auburn
Mayor of Augusta
Mayor of Biddeford
Mayor of Gardiner
Mayor of Lewiston
Mayor of Saco
Mayor of Westbrook