Meet the MPUC

The Commission regulates electric, natural gas, telecommunications and water utilities to ensure that Maine consumers enjoy safe, adequate and reliable services at rates that are just and reasonable for both consumers and utilities. The Commission oversees emerging competitive markets for some of these services. 

 

The Public Utilities Commission actively participates in Maine’s legislative activity by submitting bills and by testifying on bills related to energy policy or Maine’s public utilities. The Commission provides information to the Joint Standing Committee on Utilities and Energy, and carries out investigations as directed by the Committee. This web site contains material that the Commission has submitted to the Legislature, as well as information useful to persons wishing to follow utility or energy issues at the Legislature.

 

David Littell, Commissioner

David Littell was appointed to the Maine Public Utilities Commission in August 2010. Until this appointment, he served as the Commissioner of the Maine Department of Environmental Protection for five years starting in 2005, and served two earlier years as Deputy Commissioner. Commissioner Littell was an attorney at Pierce, Atwood from 1992-2003, the last four years as partner. From 1994-2003, he was a lieutenant commander in the U.S. Navy Reserves. Commissioner Littell received his Juris Doctor from Harvard Law School in 1992 and his A.B. from Princeton University’s Woodrow Wilson School of Public and International Affairs in 1989. His current Commission term expires in March 2015.

http://www.maine.gov/tools/whatsnew/index.php?topic=puc-commissione...

 

David P. Littell (From the RGGI site)

David P. Littell is a Commissioner of the Maine Public Utilities Commission appointed by Governor Baldacci and confirmed by the Maine Senate in August of 2010. He previously served as Commissioner of Maine’s Department of Environmental Protection from 2005 to 2010 before his appointment to the Maine PUC.  He has implemented major initiatives ranging from Maine’s Climate Action Plan, including Maine’s implementation of the Regional Greenhouse Gas Initiative, to protections for Maine’s threatened high-value wildlife habitats for wading birds, shorebirds and waterfowl to eliminating toxics in children’s products. Commissioner Littell serves as Chairman of RGGI Inc, the regional entity established by the ten RGGI-states to jointly administer the first market-based greenhouse gas reduction program in the U.S.  He also represents Maine as member of the Eastern Interconnect States Planning Committee, as an executive committee member of The Climate Registry, and is the immediate past co-chair of the New England Governors/Eastern Canadian Premiers Environment Committee and past chair of the New England Governor’s Committee on the Environment.  Governor Baldacci designated Commissioner Littell to represent Maine at the COP-15 talks in Copenhagen where he spoke at four UNFCC side-events. Commissioner Littell received his Juris Doctor from Harvard Law School in 1992, cum laude, and his A.B. from Princeton University’s Woodrow Wilson School of Public and International Affairs in 1989, magna cum laude, phi beta keta.  The University of Maine, Margaret Chase Smith Policy Center, recognized his work on climate change mitigation and adaptation by inviting him to serve as a Distinguished Maine Policy Fellow in 2010. He served as a lieutenant commander in the U.S. Navy Reserves in naval intelligence at South Weymouth and Brunswick Navel Air Stations.  He lives in Portland with two daughters Brickley (11) and Georgia (7) who attend Longfellow Elementary School.  They enjoy cross-country skiing, and hiking among other outdoor activities.

http://www.rggi.org/rggi/board/David_Littell

 

Vendean Vafiades, Commissioner

  

Vendean V. Vafiades was first appointed to serve as a Commissioner on the Maine Public Utilities Commission in January 2007 and then reappointed in March. From 1997 until her appointment, Commissioner Vafiades served as a judge on the District Court, and was appointed as the Chief Judge in 2002. Commissioner Vafiades received her Juris Doctor from the University of Maine School of Law in 1985. Commissioner Vafiades also served as a Chief Deputy Attorney General and Counsel to the University of Maine System. Commissioner Vafiades’ term expires in March 2013.

 

Jack Cashman, Chairman

 

Jack Cashman was appointed to serve as a Commissioner on the Maine Public Utilities Commission in August 2008. At the time of his nomination, Commissioner Cashman was the Senior Economic Adviser to Governor John Baldacci. He served as the Commissioner of the Department of Economic and Community Development from 2003 to 2007. Commissioner Cashman has previously been involved in commercial insurance and real estate sales and real estate development. He also served in the Maine House of Representatives from 1982 to 1992 and the Old Town City Council from 1977 to 1983. He received a Bachelor of Arts Degree, Public Administration from the University of Maine, Orono in 1973. Commissioner Cashman’s term expires in March 2011.

http://www.maine.gov/tools/whatsnew/index.php?topic=puc-commissione...

 

Governor LePage can reshape utility regulation to promote lower customer costs (2/24/11)

 

Gordon L. Weil

 

February 24, 2011

 

 

Gov. Paul LePage's administration seems to be intent on reducing the cost of government and easing the burden on taxpayers.

With more money in their own hands, the theory goes, people can save and spend on their own priorities, and businesses can invest and earn bigger profits.

While the political debate is being waged over which government services are so vital as to resist cuts, the governor and Legislature should look at utility regulatory policy as a way to reduce costs for individual and business customers.

The governor soon will appoint a new member of the Public Utilities Commission and designate a new chairman of the three-member body. The term of Jack Cashman, the current chairman, expires at the end of March.

Too much policy relating to electricity has been based on the long-term view of what is claimed to be good for Maine. Customers often are forced to pay higher costs now for promised benefits later.

The payoffs have usually not happened, but even if they could be realized, they hurt. Maine already has among the highest electric rates in the country, and those high rates undoubtedly discourage economic development.

While the governor cannot dictate regulatory decisions, he can appoint a person with a different perspective from what we have seen in recent years.

So LePage should select a new commissioner who is committed to paying attention to the impacts of regulatory decisions on people in the here-and-now. To be sure, utilities will have to be treated fairly, but simply justifying their spending because, for example, it promotes wind power is a costly and unwise policy.

In fact, LePage and his advisers ought to reshape the energy policies set by Gov. John Baldacci because they are costly and unrealistic.

At the end of his term in December, Baldacci touted his policies of energy independence and offshore wind power development. Yet, accomplishing either will impose new costs on Maine customers for electric transmission lines.

What's more, Maine customers are not guaranteed that they will get any better rates for wind power no matter what it costs to produce it. That's not how the New England market works.

At the same time as he touted energy independence, Baldacci hailed the possibility of power from eastern Canada, claiming that, because Maine was essential to the success of new developments there, it would be able to benefit. However, any such new power supply, if it happens, is likely to be a decade away.

Besides, as Cashman later reminded a legislative committee, there's no reason to believe the Canadians will give Maine any special rates, taking less than they can get in the open market.

Maine should take another look a continued participation in the New England regional power market. The market operator imposes a complex and costly system on the region. And, if this self-perpetuating body errs, federal regulators allow it to collect the costs of fixing the mistake from the very people who were hurt.

Instead of waiting for eastern Canada to come up with a possible alternate regional arrangement, Maine could take the initiative.

Also, Maine consumer-owned utilities now offer lower electric rates. The governor and Legislature should make it easier for new ones to be formed. LePage would do well to have his own independent energy advisers look at ways to cut electric rates. The Legislature has erred in asking the PUC, a judicial-style body, to advise it on state policy.

Also, LePage's regulatory review should take a close look at the surcharges that have been imposed on utility bills.

Telephone bills are loaded with taxes and fees on local services. My phone bill has eight surcharges, at least half of which are imposed by the state. That includes support for Internet service in schools and libraries and 911.

However laudable these purposes may be, they have nothing to do with providing telephone service. They get tacked on the phone bill, allowing the Legislature to avoid paying for them with tax dollars.

Much the same is true for electric service. The charges are not so visible on the bill, but they are there. If anything, they are even worse because they are hidden. Once again, no matter how worthy the expense -- from low-income assistance to greenhouse gas reduction -- they have nothing to do with paying for electric service.

The governor and Legislature, an entirely new political regime in Augusta, have a rare opportunity to reconsider and reform regulatory policy from scratch.

Gordon L. Weil, a weekly columnist for this newspaper, is an author, publisher, consultant and former international organization, U.S. and Maine government official.

 

http://www.kjonline.com/opinion/columnists/lepage-can-reshape-utili...

 

Thomas Welch Nominated as Public Utilities Commission Commissioner

March 14, 2011

Augusta, Maine – Governor Paul LePage announced today that Thomas Welch of Hancock has been nominated as Commissioner of the Maine Public Utilities Commission (MPUC). Welch, if approved, would join current Commissioners Vendean Vafiades and David Littell.

Welch served as Chairman of the MPUC from 1993 to 2005 and played a leading role in the adoption of incentive regulation for Maine’s major telephone utility. Prior to joining the Public Utilities Commission, Welch was Chief Deputy Attorney General for Antitrust in the Pennsylvania Attorney General's Office; in-house counsel for Bell Atlantic; an associate at McCutchen, Doyle, Brown & Enersen; and Assistant Professor at Villanova University School of Law. Most recently, Welch has been a member of Pierce Atwood's Energy and Regulatory practice. Since 2006 he has provided advice to a broad spectrum of participants in the electric, telecommunications and gas industries. Welch is included in the 2010 edition of The Best Lawyers in America for Energy Law.

Welch received his A.B., Phi Beta Kappa, from Stanford University and his J.D. from Harvard Law School

Welch will appear before the Joint Standing Committee on Energy, Utilities and Technology in the upcoming weeks. A date has not yet been scheduled.

The MPUC regulates electric, natural gas, telecommunications and water utilities to ensure that Maine consumers enjoy safe, adequate and reliable services at rates that are just and reasonable for both consumers and utilities. The Commission oversees emerging competitive markets for some of these services. The Commission also regulates water taxis and ferries in Casco Bay, and promotes safe digging through the Dig Safe underground utility damage prevention program.

 

http://www.maine.gov/tools/whatsnew/index.php?topic=Gov+News&id...

 

And let's not forget:

 

April 28, 2010

 

Attorney General Janet Mills

6 State House Station

Augusta, ME 04333

 

Dear Ms. Mills,

 

We are writing on behalf of the Citizens Task Force on Wind Power in asking for your office to conduct a full investigation into the matter of Kurt Adams accepting a grant of “units of equity” from his future employer First Wind, while still acting as head of Maine PUC, which was revealed in reporter Naomi Shalit's piece in the Bangor Daily News and the Sun Journal on April 22, 2010 (enclosed). The timing of these grants, apparently a month prior to Adams leaving PUC to go to work for First Wind, raises serious questions about Adam's impartiality in dealing with wind power issues while still employed as a Maine PUC Commissioner. It also raises questions of whether his conduct violated 17-A M.R.S.A. §605 (improper gifts to public servants”) or 5 M.R.S.A. §19 (financial disclosure by executive employees).

 

We are particularly disturbed by the public statements attributed to Mr. Adams purporting to justify the receipt of “units of equity” while serving as PUC Chair on grounds that the stock interest “had no value at all” at the time. The stock interest clearly was a “pecuniary benefit” by any definition of the term, as used in the criminal statute, and, based on the information in the news article, might well qualify as “income” within the meaning of the disclosure statute. The disclaimer by Mr. Adams, at a minimum, shows insensitivity to the clear appearance of a conflict that invites further investigation.

 

A thorough review of PUC matters related to wind power under Mr. Adams’ tenure is warranted, because his conversations with First Wind about employment no doubt preceded the award of stock options. Typically in employment contracts such as Mr. Adams entered into with First Wind there is extensive fine print, with terms of employment, including job description, performance review and potential for promotion and particulars about compensation and bonuses requiring significant time and back and forth, negotiations and review by attorneys, etc.

 

We believe it is important to know when Mr. Adams began discussing employment opportunities with First Wind, and what, if any PUC matters involving First Wind, such as the approval of an agreement between First Wind at Rollins and CMP for the purchase of future wind generated electricity at rates much higher than current day ahead or real time market rates in Maine, came under review during this time. It is also important to know what other matters involving wind power energy came under his jurisdiction when he had a relationship with First Wind or its predecessor, even if it did not involve First Wind.

 

We are aware of requests for an investigation of First Wind by Hampton Mitchell and also by attorney Lynne Williams, due to concerns about potential improper dealings with government officials in Maine. We are aware that the Attorney General in New York investigated First Wind (then called UPC Wind), for improper dealings with local officials which resulted in the creation of a special Code of Ethics for wind companies in New York.

 

The questions raised by Adams’ acceptance of stock options while still employed by the state of Maine can only be answered by an impartial and thorough investigation by your office. We hope you agree that this is a potentially serious matter, which at a minimum creates the appearance of conflict of interest and thereby undermines the trust of citizens in the government.

 

Thank you for your consideration.

 

Sincerely,

 

Monique Aniel, MD

Steve Thurston

co-chairs, Citizens Task Force on Wind Power.

 

The Public Advocate

 

Office of the Public Advocate Mission

The Public Advocate Office is committed to public service in representing Maine utility consumers in any matter that is covered by the authority of the Public Utilities Commission so that they have affordable, high quality utility services. We who work at the Public Advocate's Office seek to carry out this representation in a principled, diligent and compassionate manner.

Office Profile

35-A M.R.S.A. Section 1702 is the statute that authorizes the Public Advocate Office to represent the interest of ratepayers within the jurisdiction of the Maine Public Utilities Commission.  The Public Advocate, under this statute can request the PUC to initiate a proceeding, if necessary, to protect the interest of Maine consumers. 
Within this statute the Office seeks to perform this advocacy role by:

• Arguing for the lowest feasible level of rates and for the delay of increases when supported by adequate evidence.
• Implementing policy set by the PUC, the Governor and the Legislature.
• Maintaining frequent and consistent contact with ratepayer organizations, individual consumers and their representatives in order to better identify emerging problems affecting service quality for utility customers.
• Pursuing in federal agency proceedings and courts each of these objectives in order to protect the interests of Maine ratepayers.

 

Electricity Service in Maine

·         Industry Structure

• Your Electric service is made up of two parts: supply and delivery. The price for the supply portion, also known as the standard offer, is set by the forces of competition. Delivery is provided by your transmission and distribution utility and remains fully regulated. The regulated rate for delivery consists of three different elements: transmisssion, distribution, and stranded costs. Transmission service, involving high voltage bulk power lines, is regulated by the Federal Energy Commission (FERC) in Washington. The Maine Public Utilities Commission (PUC) in Augusta regulates stranded costs and distribution service. The Maine Public Advocate routinely intervenes in rate cases involving all elements of delivery rates. We are also active in trying to influence the set-up and regulation of the wholesale supply market. It is this market that influences the standard offer rate.
• For more information on state energy policy visit http://www.maineenergyinfo.com/ .

 

The OPA is a member of the National Association of State Utilities Consumer Advocates (NASUCA), an association of 42 consumer advocates in 40 states and the District of Columbia. We have members serving on NASUCA's Consumer Protection, Telecommunications and Electricity Committees.

 

http://www.state.me.us/meopa/about/index.html

 

Richard Davies, Public Advocate

Richard (Dick) Davies earned both B.A. and M.A. degrees in History from the University of Maine, and was awarded a Ford Foundation Fellowship, serving as Staff Historian for the Ford Foundation’s interdisciplinary investigation into the environmental degradation of the Penobscot River in Maine. His Masters thesis was entitled, "An Environmental History of the Penobscot River".

While in graduate school, Dick was elected to the first of four terms in the Maine House of Representatives, representing the town of Orono. During his eight years in the House he chaired both the Committee on Energy (1 term) and the Committee on Public Utilities (2 terms).

In 1982 Dick left the Legislature to become Legislative Director for Governor Joseph Brennan; taking on responsibility for the Governor's legislative program and liaison with several state departments and agencies.

Upon Gov. Brennan's departure from the office of Governor in early 1987, Dick joined the Maine State Housing Authority as director of the development division and, later, as director of governmental and community relations.

In late 1990 he founded Public Policy Associates, Inc., a consulting and lobbying firm specializing in such issues as energy, utilities, housing, education, telecommunications, nonprofit organizations, and economic development.

In 2003, Dick joined the staff of newly-elected Governor John E. Baldacci as a Senior Policy Advisor, with a focus on natural resource issues, housing, energy and utilities. In early 2007, Governor Baldacci nominated Dick to become the state’s Public Advocate, and he was confirmed for this position in March 2007. The Public Advocate represents the interests of consumers of utility services in proceedings before the Maine Public Utilities Commission.

The Office of Public Advocate has, during the past 25 years saved utility ratepayers an estimated $247 million as a result of the arguments and advocacy made by this office. Dick may be reached at his email address Richard.Davies@maine.gov.

http://www.state.me.us/meopa/about/staff.html

 

Legislative Reports

The files below are posted in Adobe Acrobat Reader and Microsoft Word. Adobe Reader files require the free Adobe Reader software. Microsoft Word files require either Microsoft Word or the free Word Viewer software.

• LD 1381 - Report - Resolve 52, "Resolve To Ensure the Success of Regional Climate Change Efforts" PDF :: Word
• Pursuant to Public Laws of 2007, Chapter 317, “An Act to Establish the Regional Greenhouse Gas Initiative Act of 2007” PDF :: Word

http://www.state.me.us/meopa/about/legislative_reports.shtml

 

April-May 2007

 

Maine’s New Public Advocate — Dick Davies

Dick Davis stands next to the governor after being sworn in as ME’s Public Advocate by Ramona du Houx Long after most personnel have left the Statehouse, a light might still be burning in one of the governor’s offices. If so, a calm, reassuring voice would be heard on the phone, and at one point Dick Davies would emerge to get another cup of coffee that would sustain him through the next round of phone calls. As Governor Baldacci’s senior policy advisor, he kept the governor informed, mainly on utility and energy issues. Davies was always on call in case of an emergency, always informed, and always took the time to help everyone. Davies not only could recite statistics and the history of an issue that he oversaw, he would give you insights about the issues that would put everything into perspective. Patient, poised, and pragmatic, Davies works with a dedication and determination that is rare to find. For him, at the end of the day, if he has helped progress what the people of the state need, that’s what matters the most. That’s the reason why Davies decided upon a life in public service. "I’ve been here through the last five governors," said Davies, referring to his time in state government. "Dick Davies has served the state for a long period of time; he has given tremendous amounts of his life and his family’s as a sacrifice," said Governor Baldacci. "I’m grateful for his tremendous service. I know we are getting a great public advocate." When he was a student at the University of Orono, where he earned his BA and MA, he was compelled to run for student government. Ever since then he’s been involved in politics. Davies served in the Maine House of Representatives for eight years and was active in reforming utility laws during his tenure in the Legislature. He chaired the Committee on Energy and the Committee of Public Utilities. "When I was a legislator I was the sponsor for the first law in the nation that eliminated mandatory retirement. It became a model that the other 49 states and the federal government eventually adopted," said Davies, recalling the achievement that is the most memorable for him. "I kicked over the first stone that eventually led to the elimination of a social policy that caused a lot of very talented people being forced out of work simply because they turned 65." It took tenacity to get the law passed, for the governor at the time, Longley, originally vetoed the bill. "But we managed to override his veto." Somehow, despite what many would consider overwhelming obstacles, Davies gets the task at hand accomplished. Governor Baldacci’s chief of staff, Jane Lincoln, witnesses Richard Davis’ appointment to Public Advocate. "Dick has worked with the most controversial issues in state government, in the state of Maine, and has always had the respect of the parties involved, whether they agreed or disagreed with him, which is a great attribute to have," said Baldacci. In fact Davies negotiated the compromise that created the Office of Public Advocate, in 1981. He never imagined that 26 years later he would be sworn in as public advocate for the state of Maine, after a unanimous vote of the state Senate. "The Office of Public Advocate is responsible for representing the using-and-consuming pubic on utility matters. I’ll have a wide array of public utility matters that I’ll be involved in, telecommunications, electricity, ferry service, water districts, and the like. I’m particularly interested in finding ways for consumers to protect their own interests. My office has limited resources, and we can’t intervene in every case that comes along. The degree that consumers know their rights and can advocate for themselves, with whatever the utility that may be in question, means there is less need for an agency like mine to represent them in every proceeding that comes along," said Davies. "I’ll be working to find ways to get them more engaged, whether it’s in publications like Rate Watches, which is a guide that educates people on how to use their utilities, or possibly engaging a community educator that will go out and meet with schools and civic organizations and others, to help them understand how they can play a role in making sure that what they pay and the service they get from their utilities is as good as possible." Before joining the governor’s staff, Davies served as president of Public Policy Associates, Inc., where his clients ranged from a natural gas utility to an association of Community Action Program agencies. Davies’ experience and diplomatic abilities enabled him to successfully help implement the governor’s energy and utility policies. When it came time to showcase state government as an example to follow with sound energy policies, Davies was there, and he ensured that energy issues became a high priority. "The whole effort to make energy a high priority within state government and putting in place a number of measures that demonstrate the state leading by example was probably the most important work I’ve done while working for the Baldacci administration," said Davies. "That included improving gas mileage of the State fleet, adding hybrid vehicles, reducing the amount of commuting that State employees did — by doing more telecommuting — and changing over how the State handles purchasing of electricity. "We bought in more green power, lowered the State’s electric bill by $4 million by bidding out contract long term, put in place the governor’s solar initiative, an energy conservation program for natural-gas customers, and the governor’s omnibus legislation. That legislation did a number of important things. It gave a tax break for using biodiesel, changed the way we handled contracts for long-term power, and how people get their electricity. All these measures are improving energy efficiency and costs to customers." The governor’s omnibus legislation has allowed the recent memoranda of understanding between New Brunswick and Maine, which could lead to an energy exchange between the two countries and lower electricity rates. "The issues that Dick has been working on, his knowledge and experiences are going to be critical to the state. There isn’t anyone more experienced. You couldn’t have a better person in this position," said Baldacci. "He recognizes the challenges we have in the state in telecommunications, energy transmission and reducing greenhouse gas emissions. To have Dick in this position is good for the future of the state."

http://polarbearandco.com/mainedem/dick.html

Public advocate’s independence, focus should be strengthened

 

April 8, 2010

 

Gordon L. Weil

 

In 1981, Gov. Joseph Brennan wanted to respond to rising demands for better consumer participation in utility regulation. I was Maine energy director at the time, and he asked me to draw up a bill for that purpose.

 

The proposal was for a new position in the governor’s office called the Public Advocate. This person with a small staff was to participate in proceedings at the Maine Public Utilities Commission on behalf of “the using and consuming public.”

 

After the bill passed, Brennan asked me to be the first public advocate.

 

The nomination was subject to legislative confirmation. The reviewing committee asked me how I would be able to determine the consumer interest and who would be my boss for such decisions.

 

I replied that I was appointed by the governor, who had been elected by the voters of Maine, and that I would report to him. I said that my own standard would be to adopt positions that brought “the greatest good to the greatest number” of Mainers.

 

Though nobody on the committee voiced the concern, a reasonable question in my own mind was whether the governor might direct me to pursue a position that was not in the consumer interest but reflected some of his other policy goals.

 

I reported weekly to Brennan. I did not have to clear my positions with him. Of course, he could have directed me, but he didn’t. Instead, he told me to make sure that my regulatory advocacy was presented in most politically favorable light. That made sense, and I tried to do it.  I think that he and I both understood that the Legislature had given me a specific task — to protect utility customers — and that his job was to make sure I did that job properly.

 

The position had been created because of outspoken public frustration, and Brennan was committed to an effective response. Other state government departments could support his other initiatives.

 

For some, there now seems to be confusion about how to mesh the public advocate’s role in protecting consumers with being an appointee of the governor.

 

I suggest that the legislative mandate to the public advocate should be made unequivocal on his or her independent role.

 

A second issue arises in connection with how the public advocate defines the consumer interest.

 

My intention was to protect the essential customer interest: the lowest possible rates consistent with reliable service. Others, both in and out of government, could argue for the increased use of renewable resources or more competition among telephone or electric providers.

 

While they were pursing those agendas, it was my responsibility to remind the Public Utilities Commission that the customers pay, that Maine has low family incomes and that rates affect people’s lives and businesses.

 

In other words, my position was focused on short-term rates. I argued against rate increases. I opposed promises that higher rates this year would bring lower rates later, since such promises rarely pay off.

 

For example, rates paid to suppliers of renewable power were raised in the belief that when oil prices rose, the renewable supply would be economical. That made Maine rates both high and noncompetitive, and industry invested elsewhere.

 

More recently, some have advocated paying artificially higher rates to generators to encourage them, thus adding more competitors. But competition is not an end in itself; it is supposed to produce lower rates.

 

The public advocate should blow the whistle on pie-in-the-sky proposals like these. 

 

The investor-owned utilities won’t do that. They are financially responsible only to their shareholders. Amazingly to me, their regulatory advocates can seek higher rates while being paid to do so using the customers’ money.

 

As time passed, some large industrial customers formed a group to protect their interests before the Public Utilities Commission.

 

The group has performed well for its members, and it has not generally adopted positions detrimental to other customers.

 

The vision of the public advocate has changed over time. Instead of being the customer’s gadfly, the office found itself supporting rate increases to pay for meeting long-term policy goals.

 

That is far from the original intent in creating the position.

 

I respect and admire all four of my successors as public advocate. They have performed with integrity and professionalism. But the public advocate — and utility customers — need help.

 

Besides reinforcing the public advocate’s independence, the Legislature should require the public advocate to focus on keeping rates low, consistent only with the need to maintain reliable service.

 

 

Gordon L. Weil, a weekly columnist for this newspaper, is an author, publisher, consultant and former international organization, U.S. and Maine government official.  

 

http://www.onlinesentinel.com/opinion/GORDON-L-WEIL--Public-advocat...

 

You pay utilities to raise your rates; here's how

 

By Gordon L. Weil

 

04/16/2009

 

from the Kennebec Journal

  

Did you know that you pay to support utilities' efforts to increase your rates?

 

Well, you do. Here's how it works.

 

A utility owned by investors must get regulators to approve most major actions, including virtually all that serve to change rates. That includes rate increases to cover operations, to add to major facilities or to insure investors a return on their investment.

 

Utilities owned by their customers, non-profits like municipal water and electric utilities, do not have investors and usually need approvals from their elected governing boards.

 

In a matter involving an investor-owned utility, the regulatory body acts like a judge and determines if the utility can do what it has requested. In Maine, the regulator is the Public Utilities Commission or PUC, a three-member body that has its own independent staff. It can hire experts.

 

Of course, the utility itself is represented, usually by lawyers and experts. They support the utility's request and seek to discredit those who oppose the utility's proposal.

 

Often the utility request is opposed by consumer representatives. In Maine, consumers are represented by the Public Advocate, who also has his or her own staff and can hire experts.

 

Sometimes individual customers take part, but only the largest can afford adequate legal counsel and experts.

 

The PUC is supposed to walk the line between the utility interests and the consumer interests, ruling in accord with what is called the "public interest."

 

On one hand it will try to keep costs as low as possible to protect customers. But it must also make sure that the utility receives enough money to provide reliable service and a profit for its investors. The investors need to make money or they won't provide the funds needed by the utility for its equipment, buildings, vehicles and the like.

 

The utility's legal obligation is not to its customers but to its investors. So, not surprisingly, it will seek to get as much from its customers as it thinks it can in order to reward its investors. That's why the PUC has to make sure that the utility gets what is fair, but not more.

 

In most businesses, how much profit owners can make depends on their costs, the productivity of their workers, their competition and the market. They get no guarantees and may charge whatever they want.

 

Utilities are usually monopolies so they have no competition and lack the economic influence of the marketplace on what they charge. The PUC takes the place of the competition.

 

Here's where things begin to get interesting. The PUC allows utility rates that will recover costs and to earn a profit for investors. The allowed profit, earned if the utility operates efficiently, is a percentage of the amount invested. Though the profit is not guaranteed, it is a lot more secure than most other businesses get.

 

What's more, the PUC or any similar regulator allows an additional amount to cover the income taxes the utility will have to pay on its profit. In other words, the allowed profit is an after-tax amount. In effect, that makes the possible profit even greater.

 

These days, during hard times, the utility continues to have the right to earn this profit, even while other businesses are failing or losing money. The theory is that utilities provide essential services and cannot be allowed to fail. And nobody wants to hear that more utilities should be owned by their customers and not require a profit at all.

 

All this may be known by some readers and entirely sensible to most others. But let's get back to the regulatory proceeding where the rates are set.

 

The costs of the PUC and the Public Advocate are paid from the proceeds of a surcharge attached to utility rates. Fair enough. Customers pay their own way.

 

What about the utilities? Since they are trying to boost their profits, do they pay their own way? No. Their costs are included in the rates they charge and which customers may oppose. That can encourage high regulatory spending by utilities.

 

So, customers pay the costs of utilities to raise their own rates, and investors get the benefit.

 

Isn't it time to fix that? For-profit utilities should pay their own regulatory costs. That might even make them think twice about asking for higher rates.

 

http://kennebecjournal.mainetoday.com/view/columns/6201234.html

 

 

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