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August 1, 2022

Utility commission imposes new performance standards on CMP, Versant

Maine utility regulators are prescribing new utility performance standards for the two investor-owned power utilities in the state, Central Maine Power and Versant. However, the new requirements don’t include any additional penalties or incentives for meeting them.

According to a July 29 final order, the Maine Public Utilities Commission approved updated performance-focused rules that include measuring their billing errors, how often calls are answered by call center employees, and how many customers endure sustained outages during major outage events.

Starting in 2023, utilities will also need to mail a report card explaining in layman's terms whether they’re meeting those metrics and their success meeting performance metrics to residential customers, per the new rules. Regulators will receive the same information in a quarterly report.

Despite written arguments that new financial penalties or incentives should be applied, commissioners opted not to include any. Central Maine Power and Versant both pushed for utility incentives, while consumer and environmental advocates recommended financial penalties.

“While a public-facing report card can be an effective public relations tool to help hold a utility accountable to and communicate with its customers, the proposed rule falls short of employing predictable economic signals that can be incorporated readily into a utility’s bottom line, i.e., incentive and penalty mechanisms,” noted the Natural Resources Council of Maine in public comments filed in late March.

But regulators instead noted in their final order that they have the power to impose penalties against utilities “in the event that a utility fails to provide service at the levels required.” Instating financial incentives to meet performance metrics has in recent years become an increasingly popular tool for regulators to encourage utilities to achieve policy goals, according to RMI, a non-partisan, non-profit organization focused on the clean energy transition.

Central Maine Power has repeatedly earned the distinction of one of the least-liked power utilities in the country. CMP was ranked last year as the least satisfactory power utility in the U.S., according to a survey conducted by prominent market research firm J.D. Power. 

Versant Power wasn’t far behind, tying in that same survey for fourth-worst customer satisfaction nationwide. The new rules also require the utilities to hire independent firms to analyze customer satisfaction among those who have needed help from the utility.

Ratepayer complaints over Central Maine Power’s much-criticized SmartCare billing system led to a year-long investigation that resulted in a $10 million commission-imposed earnings cut to Central Maine Power’s return on equity. Maine Public Utilities Commission Chairman Philip Bartlett noted in the meeting imposing the cut that a “capably managed utility” wouldn’t have had the same billing errors implementing such a system.

The new measures amend existing power transmission and distribution utility performance standards, following a commission inquiry examining whether revising the rules would improve customer satisfaction and electricity service performance. These new guidelines only apply to Maine’s two investor-owned utilities, Central Maine Power and Versant Power, and not consumer-owned utilities, commission spokesperson Susan Faloon said in an email. 

Any rules from the original regulation directed at consumer-owned utilities still apply, she explained.

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