Bangor Hydro chief tries to allay customers’ fears Officer asks for time to show service will improve

There will be no independent audit of how Bangor Hydro-Electric Co. operates and the utility’s new chief operating officer wants customers to know there doesn’t need to be one.

It will take at least one long winter for Ray Robinson to convince Bangor Hydro’s 110,000 customers that the utility will be able to offer better service with a reduced budget and a smaller staff.

Robinson is the point man sent in by Bangor Hydro’s new parent company, Emera Inc. of Nova Scotia, to fix up the utility that customers have been complaining about for years.

For the last four months, Robinson has operated in the shadows, away from the public forum of gripes and the concerns that what he was doing behind the scenes would hurt the business.

Customers wanted only one thing from their utility – their transmission rates lowered, especially after seeing five increases in five years and facing yet another hike. But most ratepayers didn’t expect the utility to cut its 425-person staff by 112 people to do it, possibly risking the quality of their service in the process.

Last week, the Maine Public Utilities Commission approved a plan that would cut Bangor Hydro transmission rates by a total of 12 percent over a six-year period while threatening to impose harsh fines of up to $840,000 a year if strict service quality standards aren’t met. PUC analysts, Bangor Hydro managers and the state’s public advocate negotiated the deal.

The first rate decrease of 2.5 percent goes into effect starting July 1, 2003.

Stephen Ward, the state’s public advocate, initially wanted the PUC to follow through on a threat to conduct an independent audit of Bangor Hydro’s organization and books.

But after the negotiations and a separate, independent analysis conducted by his office, Ward changed his mind. That analysis, which compared Bangor Hydro’s operations to those of similarly structured utilities in New England, found that “over six years, distribution rate decreases of approximately 12 percent are entirely feasible with no loss of service quality or degradation of customer service.”

Now Robinson publicly is asking customers to give him time to prove that what he’s done will work.

“It became apparent to us that there were some very strong messages that were important – that customers receive high levels of service, quality service, and at stable or reduced rates over time,” said Robinson in a recent interview.

Robinson said what he is implementing at Bangor Hydro is what’s called “performance-based regulation.” In short, it places “pretty tough expectations” on customer service while cutting costs and “holding our feet to the fire.”

“In a way, it’s self-moderation, self-regulation, self-modulation,” Robinson said. “And it’s self-correcting. If things go off, it has a way of sending signals that things are off.

“Only through demonstration of that will customers start to understand it,” Robinson added. “All this skepticism out there I would expect. Demonstration and performance is the only way that skepticism will disappear.”

The skepticism does seem to be going away so far at the PUC, where last week the three commissioners complimented Robinson and his management team for professional and cooperative input in the negotiations to cut rates and develop strict service standards.

“[PUC] staff has reported a very excellent spirit of cooperation with the [others] in the case and with Bangor Hydro in particular,” said PUC Chairman Tom Welch at the June 6 hearing to approve the rate plan. “And interestingly enough, Bangor Hydro has expressed its appreciation of staff’s time throughout the case, which they characterize as being very tough but fair and predictable, which is probably what people should expect out of regulators.”

Customers’ vocal unhappiness with the utility, expressed to the PUC and in the press, did not go without notice by the commissioners. And even though the PUC said it would be watching closely to make sure Bangor Hydro adheres to the new service quality standards, the commissioners stressed that customers might need more convincing than they do.

“I think the public response gave Bangor Hydro’s new management the opportunity to really experience for themselves the level of customer dissatisfaction with the prices,” said Commissioner Stephen Diamond. “We already knew it, which is why we proposed a management audit. It was largely due to the public outcry that we got such a favorable result, so that I think the public directly contributed to what happened.”

Added Commissioner William Nugent, “Bangor Hydro’s new management is reaching for even higher reliability levels than we’ve experienced. Bangor Hydro’s new management is a serious and committed set of professionals.”

Nugent said he looked forward to Bangor Hydro’s customers being convinced of the same over time.