Bill Summary – FastDemocracy

130th MAINE LEGISLATURE
                     FIRST SPECIAL SESSION-2021
Legislative Document                                                                             No. 1708
H.P. 1269                                                           House of Representatives, May 17, 2021
            An Act To Create the Pine Tree Power Company, a Nonprofit
            Utility, To Deliver Lower Rates, Reliability and Local Control for
            Maine Energy Independence
    Received by the Clerk of the House on May 13, 2021. Referred to the Committee on
Energy, Utilities and Technology pursuant to Joint Rule 308.2 and ordered printed pursuant to
Joint Rule 401.
                                                                                      ROBERT B. HUNT
                                                                                                 Clerk
Presented by Representative BERRY of Bowdoinham.
Cosponsored by Senator BENNETT of Oxford and
Representatives: CARLOW of Buxton, GROHOSKI of Ellsworth, NEWELL of the
Passamaquoddy Tribe, POIRIER of Skowhegan, Senators: BRENNER of Cumberland,
President JACKSON of Aroostook, WOODSOME of York.
                                        Printed on recycled paper
 Be it enacted by the People of the State of Maine as follows:
     Sec. 1. 5 MRSA §12004-G, sub-§36 is enacted to read:
     36.
  Public         Pine Tree Power Company Board                $110/Day and       35-A MRSA
  Utilities                                                   Expenses                §4002
     Sec. 2. 21-A MRSA §354, sub-§5, ¶G, as enacted by PL 1985, c. 161, §6, is
 amended to read:
     G. For a candidate for State Representative, at least 50 and not more than 80 voters;
     and
     Sec. 3. 21-A MRSA §354, sub-§5, ¶H, as enacted by PL 1985, c. 161, §6, is
 amended to read:
     H. For a candidate for county charter commission member, at least 50 and not more
     than 80 voters.; and
     Sec. 4. 21-A MRSA §354, sub-§5, ¶I is enacted to read:
     I. For a candidate for member of the Pine Tree Power Company Board under Title
     35-A, section 4002, subsection 2, paragraph A, at least 300 and not more than 400
     voters.
     Sec. 5. 35-A MRSA §1511-A is enacted to read:
 §1511-A. Fitness to serve
     By January 1, 2024, the commission shall find a transmission and distribution utility
 with 50,000 or more customers unfit to serve and shall require the sale of the utility if the
 commission determines that the utility has, within the previous 5 years been found to have
 met 2 or more of the following criteria for unfitness:
     1. Customer satisfaction. Repeatedly been rated in the lowest decile of utilities of a
 similar size for customer satisfaction on a reputable national survey of utility business or
 retail customers;
      2. Reliability. Repeatedly reported reliability, with or without major event days, in
 the lowest decile of utilities of a similar size in the country; and
     3. Cost. Repeatedly charged its customers residential delivery rates in the highest
 decile among utilities of a similar size in the country.
     Sec. 6. 35-A MRSA §3501, sub-§1, ¶D, as amended by PL 2019, c. 311, §2, is
 further amended to read:
     D. The portion of any municipal or quasi-municipal entity located in the State
     providing transmission and distribution services; and
     Sec. 7. 35-A MRSA §3501, sub-§1, ¶E, as amended by PL 2019, c. 311, §2, is
 further amended to read:
     E. Any transmission and distribution utility wholly owned by a municipality located
     in the State.; and
     Sec. 8. 35-A MRSA §3501, sub-§1, ¶F is enacted to read:
                                        Page 1 - 130LR0043(01)
     F. The Pine Tree Power Company established in chapter 40.
     Sec. 9. 35-A MRSA §3502, first ¶, as amended by PL 1999, c. 398, Pt. A, §86 and
 affected by §§104 and 105, is further amended to read:
      Notwithstanding section 310, any consumer-owned transmission and distribution
 utility, except for the Pine Tree Power Company established in chapter 40, that proposes
 to increase rates, tolls or charges by not more than 15% of the utility's annual operating
 revenues or proposes to decrease rates, tolls or charges in any amount may elect to set rates
 pursuant to this section and section 3503.
     Sec. 10. 35-A MRSA c. 40 is enacted to read:
                                       CHAPTER 40
                            PINE TREE POWER COMPANY
 §4001. Definitions
    As used in this chapter, unless the context otherwise indicates, the following terms
 have the following meanings.
      1. Acquired utility. "Acquired utility" means an investor-owned transmission and
 distribution utility whose facilities or property are purchased or intended for purchase
 pursuant to this chapter.
      2. Board. "Board" means the Pine Tree Power Company Board established in Title
 5, section 12004-G, subsection 36.
    3. Company. "Company" means the Pine Tree Power Company established in section
 4002.
     4. Cost of service. "Cost of service" means the total amount that must be collected by
 the company to recover its costs but does not include any return on capital investment
 unless a return is required as security for debt service.
     5. Customer-owner. "Customer-owner" means a person to whom the company
 provides electricity.
     6. Generating source. "Generating source" means a machine or device that produces
 electric energy by any means.
     7. Utility facility. "Utility facility" means any portion of a plant used or useful in
 providing transmission and distribution utility service and includes, but is not limited to,
 transmission lines, office buildings, equipment and transportation equipment.
     8. Utility property. "Utility property" means any tangible or intangible asset, liability,
 obligation, plan, proposal, share, agreement or interest of a utility; any facility in
 development or planning by the utility as of January 1, 2020; and, without limitation, the
 entire utility and any part or portion of the utility.
 §4002. Pine Tree Power Company established; purpose
                                         Page 2 - 130LR0043(01)
      The Pine Tree Power Company is established to provide for its customer-owners in this
 State reliable, affordable electric transmission and distribution services in accordance with
 this chapter.
     1. Company purposes. The company shall use its access to low-cost capital and its
 ability to manage the electric transmission and distribution system in a manner that is not
 focused on ensuring shareholder profits for the following purposes:
     A. To deliver electricity to the company’s customer-owners in a safe, affordable and
     reliable manner;
     B. To ensure excellence, timeliness and accuracy in billing, metering and customer
     service;
     C. To provide an open, supportive and competitive platform to develop and deploy
     renewable generation, storage, efficiency and beneficial electrification technologies;
     D. To assist the State in rapidly meeting or exceeding the climate action plan goals
     established in Title 38, chapter 3-A;
     E. To improve the State’s Internet connectivity through more affordable access to
     utility poles and other infrastructure in unserved or underserved areas of the State, as
     defined in section 9202, subsection 5;
     F. To advance economic, environmental and social justice and to benefit company
     workers and all communities in the State;
     G. To provide for transparent and accountable governance; and
     H. To support, secure and sustain economic growth and benefits for the State.
     2. Governance; board. The company is created as a body corporate and politic and
 is governed by the Pine Tree Power Company Board in accordance with this section.
 The board is composed of 11 members, 7 of whom are elected, voting members and 4 of
 whom are expert advisory members selected by the voting members. All members must
 be residents of the State.
     A. Each of the 7 elected, voting members must be a legal citizen of the United States
     for at least 5 years, be at least 21 years of age, be a legal Maine resident for at least 1
     year and have lived in the area the member represents as provided in this paragraph for
     at least 3 months. Each elected, voting member must represent 5 of the State's 35 State
     Senate districts, as set out in Title 21-A, section 1203-B, as follows:
         (1) One member represents State Senate districts 1 to 5;
         (2) One member represents State Senate districts 6 to 10;
         (3) One member represents State Senate districts 11 to 15;
         (4) One member represents State Senate districts 16 to 20;
         (5) One member represents State Senate districts 21 to 25;
         (6) One member represents State Senate districts 26 to 30; and
         (7) One member represents State Senate districts 31 to 35.
                                         Page 3 - 130LR0043(01)
     B. The 4 expert advisory members must be selected by the elected, voting members.
     The expert advisory members must collectively possess expertise and experience
     across the following 4 areas:
         (1) Utility law, management, regulation or finance;
         (2) Clean energy and the environment;
         (3) The concerns of utility employees; and
         (4) The concerns of electricity consumers.
     C. Candidates for election to the board pursuant to paragraph A are eligible for funding
     through the Maine Clean Election Act, in amounts and under terms commensurate with
     those for candidates for the State Senate. The Commission on Governmental Ethics
     and Election Practices, established pursuant to Title 5, section 12004-G, subsection 33,
     shall adopt rules to implement this paragraph. Rules must include, at a minimum, the
     procedures for qualifying and certification and for allocation of distributions from the
     fund and other provisions necessary to ensure consistency with the provisions of the
     Maine Clean Election Act. Rules adopted pursuant to this paragraph are major
     substantive rules as defined in Title 5, chapter 375, subchapter 2-A.
 The nomination and election of the elected, voting members of the board are governed by
 the provisions of Title 21-A concerning nonpartisan elections for county office other than
 county commissioner or county charter commission member, except that the determination
 of the elections is governed by Title 21-A, section 723-A. The Secretary of State may
 adopt rules governing the election of members of the board and shall consult with the
 commission in developing the rules. Rules adopted under this subsection are routine
 technical rules as defined in Title 5, chapter 375, subchapter 2-A.
     3. Term of office. An elected, voting member of the board serves for a term of 6 years
 and an expert advisory member of the board serves for a term of 4 years. An elected, voting
 member serves from December 1st to November 30th and an expert advisory member
 serves from February 1st to January 31st. A majority of elected, voting members shall
 declare a vacancy on the board upon the resignation, death or incapacitation of an elected,
 voting member, in the event that a member is absent without leave of the chair for at least
 half of all board meetings held in a 180-day period or in the event of a member's gross and
 continual neglect of duty. If there is a vacancy on the board of an expert advisory member,
 it must be filled within 180 days in the same manner as described in subsection 1 and the
 person selected to fill a vacancy serves for the unexpired term of the member whose
 vacancy the person is filling. If there is a vacancy on the board of an elected, voting
 member, the board shall notify the Governor and the vacancy must be filled within 180
 days in the same manner as for a State Senator under Title 21-A, sections 366 and 381, and
 the person elected to fill a vacancy serves for the unexpired term of the member whose
 vacancy the person is filling. Expert advisory members may be reselected and voting
 members may be reelected.
     4. Quorum and chair. Four elected, voting members of the board constitute a
 majority and a quorum. The board shall elect from its elected, voting members a chair and
 a vice-chair. The vice-chair shall serve as acting chair in the absence of the chair.
    5. Voting. Except as otherwise provided in this Title, all decisions of the board must
 be made by a majority vote of the elected, voting members of the board. Whenever
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45
 possible, the board shall attempt to achieve consensus among voting and nonvoting
46
 members.
     6. Bylaws; due diligence. The board shall adopt bylaws, conduct due diligence as it
 considers necessary and develop a transition plan and a business plan for the company prior
 to making a purchase price offer for any utility facility or utility property.
     7. Board review. Four years after the first meeting of the board, the board shall review
 the effectiveness of the company governance structure and shall report to the joint standing
 committee of the Legislature having jurisdiction over energy and utilities matters the
 outcome of this review. The report may suggest necessary changes to the governance
 structure of the company. The committee may report out legislation pertaining to the
 recommendations in the report.
 §4003. Powers and duties; acquisition of utility facilities and utility property
      1. Powers; generally. The company is a consumer-owned transmission and
 distribution utility and has all the powers and duties of a transmission and distribution
 utility under this Title, as affected by the provisions of chapter 35, within the service
 territories of the investor-owned transmission and distribution utilities whose utility
 facilities it acquires under this chapter.
     2. Limits on company; generating property. The company may not own or operate
 a generating source or purchase electric capacity or energy from a generating source, except
 as the commission may approve in order to allow the company to maintain or improve
 system reliability.
     3. Operations. The company shall contract by means of a competitive public
 solicitation the services of a qualified nongovernmental entity, referred to in this chapter as
 "the operator," or "the operations team," to provide cost-effective, private sector operations,
 maintenance, customer accounts management and customer service and information and to
 assist as necessary in regulatory affairs, capital planning and administrative services. In
 requesting and evaluating bids for the provision of these services, the board shall consider
 anticipated costs; professional, operational and managerial experience; familiarity with the
 systems to be administered; and ability to improve customer service and employee morale.
 The company may establish additional criteria for its solicitation and shall determine the
 period and the specific terms of each operations contract.
      4. Operator employees. The employees of the operations team retained to operate
 the company's facilities are considered private employees, with all the rights and
 responsibilities of private employees. The operator shall hire any person who was an
 employee of the acquired utility at the time the company acquired the utility facilities who
 is a qualified, nonexempt employee subject to collective bargaining agreements of the
 acquired utility. To ensure continuity and an experienced local workforce, the operations
 team shall offer to these employees a retention bonus of 6% of annual gross pay for the
 first year of work and 4% of annual gross pay for the 2nd year of work. This bonus must
 be payable on the earlier of the anniversary of the date of hire and the date of a termination
 of employment that occurs following the date of hire, as long as the termination is due to
 the employee's death or disability, by the employer without cause or by the employee for
 good reason. The operations team shall maximize opportunities for internal promotion,
 additional staffing and on-the-job training for all employees and may not contract with
 other businesses to perform work that could reasonably have been performed by qualified,
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46
 nonexempt employees of the operations team. The operator shall assume all retirement
47
 benefit obligations to the workers of and retirees of an acquired utility, unless these
48
 obligations have remained with the acquired utility, its corporate parent or a pension plan
49
 trust regulated by the federal Employee Retirement Income Security Act of 1974. The
50
 operator shall honor and maintain the terms of any collective bargaining agreements in
51
 effect at the time the company acquired the investor-owned transmission and distribution
52
 utility for the remaining term of any collective bargaining agreement, except that, when 2
53
 or more contracts exist, the employees' wages, salaries and benefits must be made
54
 reasonably equal to the higher of those provided in the contracts or must exceed those
55
 previously paid by the acquired utility.
 Upon the conclusion of a contract pursuant to subsection 3, the company, in soliciting for
 a new contract, shall give preference to service providers who agree to maintain or improve
 the terms of the collective bargaining agreement in existence on the conclusion of