Controlling power

OK, so Maine probably won’t experience the blackouts and huge jumps in fuel prices that are crimping the California lifestyle. Still, electric deregulation in Maine hasn’t gone as well as hoped, and the price increases here may be partly attributable to regulatory changes. David Flannigan, former longtime CEO of Central Maine Power, recently offered six areas of concern for Maine to make certain it avoids the California experience. His concerns, and others, point to further involvement by the Legislature if the switch to a deregulated system is to be successful.

Mr. Flannigan’s comments, on today’s op-ed page, are excerpted from the most recent Maine Policy Review from the Margaret Chase Smith Center for Public Policy at the University of Maine. He was joined there by five others who, collectively, conclude that Maine is considerably better positioned than California but still has a long way to go. For example, Gordon Weil, an expert in power supply for large customers and transmission operation, points out that Maine authorities and the operator of the regional power grid, the New England Independent System Operator (ISO), “have created an excessively complex system, one that deters the entry of numerous marketers and discourages the very competitors we wanted to flock to serve us.”

Kenneth Gordon, former chairman of the Maine Public Utilities Commission, des-cribes possible improvements in demand-side management – often conservation measures – and offers this clear but frightening observation: “(W)ithout freely adjusting prices that reflect the underlying reality of supply and demand, one cannot expect to see an operating market at all.” It would be interesting to see whether a truly free power market produced the same result Maine experienced in a deregulated airline market.

All of these observations lead to a series of questions articulated by PUC member Stephen Diamond, who asks indirectly about the current regional system of the New England Power Pool and the ISO. In brief: Who is, or who should be, looking out for Maine’s interests? “Should this authority be vested in a self-regulatory ‘stakeholders’ group and an independent, nonprofit corporation?” he asks. “Do they sufficiently represent the public interest, as well as the specific interests of ‘small’ consumers? Does the fact that they must answer to a federal agency, even if it is one that puts a high premium on self-regulation, ensure sufficient public accountability?”

Mr. Diamond, unfortunately, doesn’t answer these questions. The Legislature, however, should. Maine doesn’t have the wildfire of a problem facing California. Instead, it has a dozen small fires that threaten to burn consumers for years to come. Now that deregulation, such as it is, has arrived, lawmakers should interest themselves in who is to operate the system.