CMP and Maine near settlement over lawsuit over utility's overspending on power restoration

Central Maine Power Co. and the state's Office of the Public Advocate have reached a tentative agreement on state charges that Maine's largest utility spent excessively to quickly restore power following the storms in order to improve its image at the expense of taxpayers.

Jared S. des Rosiers, an attorney for CMP, told the Public Utilities Commission in mid-May that the two sides had reached a “tentative settlement”; Representatives from OPA and the utility met behind closed doors with state regulators to finalize the deal.

Public Advocate William Harwood and a CMP spokesperson said they would not comment during settlement negotiations.

Harwood accused CMP of spending “recklessly” 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 their travel plans two days before Christmas. He said the PUC should prohibit CMP from recovering from taxpayers nearly $54 million in storm-related costs, which overall amount to more than $125 million.

Prudence is a standard of review used to judge the performance of a utility and its decisions. If regulators judge a utility acted prudently, they will allow the company to recoup its costs from ratepayers. If a utility has acted recklessly, regulators say, it won't be allowed to charge ratepayers and may have to exploit its profits, which could anger shareholders.

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

Harwood said that as storms increasingly knock out power, utilities need to do a better job allocating resources to restore power. Utilities and regulators must strike a balance between restoring power and keeping it affordable, he said. And he accused the CMP of spending millions of dollars more than necessary on a public relations effort aimed at convincing voters against a proposed public power company.

The public power proposal was overwhelmingly rejected during last November's elections. But this decision was motivated by the dissatisfaction of customers who accused CMP of excessively long outages and high monthly bills.

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

“In doing so, CMP's performance was consistent with utility best practices and the expectations of customers, local and state officials, and first responders around the world.
company’s service territory,” the utility said.

Transcripts of PUC hearings between the public defender's office and CMP show how both sides sometimes struggled to find a way to quickly restore power without significantly increasing costs.

In an exchange at a March 28 meeting, Jared des Rosiers, an attorney representing CMP, questioned Jesse Houck, of the public defender's office, about his recommendation to dismiss the charges. Houck said adjustments to the total number of line crews could account for an average of crews during a storm, which could reduce the time it takes to restore power while increasing the ban.

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

Houck said he justified the recommended denial on the grounds that more crews had been held back than the plan called for. Questioned by des Rosiers, he said he did not know the details of the work and did not have knowledge of the quality, productivity and efficiency of the work of a particular contractor.

Under questioning by Gerald Petruccelli, an attorney representing the Maine Chamber of Commerce, Helmuth Schultz III, a consultant for the Office of the Public Advocate, said CMP was paying for
part of the work, but “the question arises whether all the costs are borne” by the paperwork.

Schultz said he questioned the number of crews based “on the fact that the documentation doesn't prove they were there and performing services.” Under questioning by Petruccelli, he said he had not observed the damage caused by the storm or assessed whether enough crews or too many crews were at work.

“I'm just saying the documentation doesn't support the level of crews that were there,” he said.

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