Should Maine Hold Power Companies More Accountable For Outages?

Nov 9, 2017

State utility regulators said they may look for better ways to hold power companies accountable following the recent storm that left nearly 600,000 Mainers without electricity, hundreds of whom remained in the dark eight days later.

The Public Utilities Commission first needs to get formal estimates from Emera and Central Maine Power on their costs to restore power, commission spokesman Harry Lanphear said.

Maine utilities must report their overall performance to the commission each year, but regulators are considering upping accountability measures in light of the widespread outages.

Accountability for utilities has garnered increasing attention, including in Rhode Island, where the governor demanded a comprehensive review of a power company’s response to last week’s widespread outages, and even for their potential role in the recent California wildfires.

New York’s Public Service Commission, that state’s utility regulator, set up a scorecard in 2013, a year after utilities came under fire for their lack of preparation and response to Hurricane Sandy, which knocked out power to more than 750,000 customers in New York City for several weeks.

The New York system, which measures utility performance after storms that cause power outages for three days or more, uses a 1,000-points scorecard divided into three categories: preparation, 150 points; operational response, 550 points; and communication with the public and regulators, 300 points.

“We don’t have something in place that evaluates a specific storm restoration activity,” Derek Davidson, director of the consumer assistance and safety division at the Maine Public Utilities Commission, said. “Creating a scorecard would be a decision of the Commission. I assume there will be some review and analysis [after this recent storm].”

PUC Chairman Mark Varney and Commissioner Bruce Williamson were not available for comment.

So far, there have been few severe storms in New York to which to apply the new system, Public Service Commission spokesman James Denn wrote in an email.

The scorecard will likely get its first test run rating power outage responses to the March 8-15 snowstorm that blanketed much of the northeast, including western New York state and the Finger Lakes. Gov. Andrew Cuomo directed an investigation into Rochester Gas & Electric’s preparation and response because three days after the storm started, only half of the 100,000 customers who lost power had it restored. The investigation also involves New York State Electric & Gas.

“Overall, the scorecard set a good framework for what to analyze and review … for promoting effective emergency response,” Denn said.

CMP and Emera must submit data annually to state regulators on storm outages and response. The one index shows the number of interruptions over time while another tells the duration of an outage. Davidson said the utilities self-report both numbers, which give annual totals but do not break down specific storms.

CMP, which has many more customers than Emera, had a high of 470,000 customers without power, while Emera had about 89,000 without service at its height.

CMP invested $1.4 billion in a Maine Power Reliability Program to modernize and enhance transmission of its 40-year-old bulk power system in 2012. Davidson said it isn’t clear how much that upgrade contributed to power restoration in the recent storm. But the Maine Office of the Public Advocate, which represents utility customers and regularly checks the program’s progress, said it might have helped.

“It has added to the reliability of the equipment,” consumer advisor Kiera Reardon said. “We probably would have been worse off without it.”

However, William Pentland, a partner at Portland law firm Brookside Strategies LLC, which focuses on utility regulation and energy policy, harshly criticized CMP’s program in a Nov. 5 Forbes opinion piece.

His firm specializes in microgrids and distributed power, which are smaller, localized power sources used by, for example, a campus or industrial park. While still emerging, they compete with large utilities for customers.

“The CMP Maine Power Reliability Program certainly did not keep the lights on in Maine despite the program’s $1.4 billion price tag,” he wrote. “CMP’s incompetence and lack of planning turned what should have been a short power outage into a prolonged and painful experience.”

Rep. Seth Berry, D-Bowdoinham, who chairs the Legislature’s committee overseeing energy and utilities, also held utilities’ feet to the fire on his Facebook page.

“As a CMP customer, you … pay the cost for this week’s storm repairs. You also pay for 100 percent of their transmission infrastructure,” he wrote.

CMP has a $10 million reserve fund established in 2014, with $6 million set aside to cover costs resulting from larger storms and $4 million for smaller storms, the PUC’s Lanphear said.

That money was raised by increasing customer electric rates. CMP holds the reserve fund, but it carries some stipulations.

The PUC’s Lanphear gave an example of how the money would be used for a major storm like the recent one. If the cost exceeds $12 million, CMP would pay $2 million from the reserve fund, its cap for any single storm. The remainder of the cost would be paid through a customer rate hike that the PUC would automatically approve if it found CMP’s storm outage repair costs legitimate, he said.

“The impact per every $5 million of storm costs would be about 35 cents per month for a typical bill,” he said. That’s assuming CMP could recover the costs over a one-year period.

CMP must file its cost to repair damages within 30 days of the storm’s end.

Emera does not have a 30-day filing limit but will try to file as quickly as it can, spokeswoman Allison Gray Doughty said. It does not have a reserve fund but has budgeted for three average winter storms per year. However, if its restoration costs top $1.7 million, which is 2.5 percent of its operating costs, it will consider filing with the PUC to recover some of those costs through a rate increase, she said.

Berry also asked businesses suffering more than 40 percent damage, such as spoiled inventory or structural issues or closures of 72 hours or more, to fill out a survey to help them access federal resources.

Completed surveys should be emailed to business.answers@maine.gov by 10 a.m. Nov. 9. The PUC also has a complaint process and can be reached at 800-452-4699.

This story appears through a media sharing agreement with Bangor Daily News.