CMP, Maine near settlement over complaint utility overspent on power restoration (2024)

Central Maine Power Co. and the state Office of the Public Advocate have reached a tentative settlement over the state’s accusations that Maine’s largest utility spent excessively to quickly restore power following storms to buff its image at the expense of ratepayers.

Jared S. des Rosiers, counsel for CMP, told the Public Utilities Commission in mid-May that the two sides had reached a “settlement in principle;” representatives of OPA and the utility have been meeting behind closed doors with state regulators to finalize the agreement.

Public Advocate William Harwood and a spokesman for CMP said they will not comment during settlement talks.

Harwood accused CMP of “imprudently” overspending in response to outages caused by several storms in 2022, particularly one on Dec. 16 and another a week later. The latter cut electricity to 255,000 customers and disrupted travel plans two days before Christmas. He has said the PUC should bar CMP from recovering from ratepayers nearly $54 million in storm-related costs that overall amounted to more than $125 million.

Prudence is a standard of review used to judge a utility’s performance and its decisions. If regulators rule that a utility acted prudently, they will allow the company to recover costs from ratepayers. If a utility acted imprudently, according to regulators, it will not be permitted to charge ratepayers and instead may have to tap its earnings, possibly angering shareholders.

CMP said it “fundamentally disagrees” with the public advocate office’s assessment of its response to the storms and that “no disallowance is appropriate.”

Harwood has said that as storms increasingly knock out electricity, utilities must do a better job allocating resources to restore power. Utilities and regulators need to strike a balance between getting electricity back on and keeping electricity affordable, he said. And he accused CMP of spending millions of dollars more than necessary as a public relations move to sway voters against a proposed publicly-owned power company.

The public power proposal was overwhelmingly rejected at the polls last November. But it was motivated by dissatisfaction among customers who accused CMP of excessively long outages and high monthly bills.

In response to the public advocate, CMP told regulators it restored power “as quickly and safely as possible” after each storm in 2022, with restoration time for most storms below the estimated duration established in its emergency response plan.

“In doing so, CMP’s performance was in accordance with good utility practice and consistent with the expectations of customers, local and state officials and first responders from around the
company’s service territory,” the utility said.

Transcripts of PUC hearings between the public advocate’s office and CMP show how the two parties struggled at times to figure out how to restore power quickly without significantly increasing costs.

In an exchange at a March 28 meeting, Jared des Rosiers, a lawyer representing CMP, quizzed Jesse Houck of the public advocate’s office about his recommendation for a cost disallowance. Houck said adjustments to the total line crews could represent an average of crews during a storm that could reduce the time needed for power restoration while increasing the disallowance.

“We felt that this was a good compromise that could provide … a uniform approach to all the storms,” he said.

Houck said he justified his recommended disallowance because more crews were retained than the plan called for. Questioned by des Rosiers, he said he was not familiar with the specifics of the work and did not have knowledge about the quality, productivity and efficiency of the work by a particular contractor.

Under questioning by Gerald Petruccelli, a lawyer representing the Maine Chamber of Commerce, Helmuth Schultz III, a consultant for the Public Advocate’s Office, said CMP is paying for
some of the work, but “there’s a question as to whether all the costs are supported” by paperwork.

Schultz said he questioned the number of crews based “upon the fact that the documentation doesn’t support that they were there and performing services.” Questioned by Petruccelli, he said he did not observe the storm damage or evaluate whetherenough crews or too many crews were at work.

“I’m just saying that documentation does not support the level of crews that was there,” he said.

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