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tehmightyengineer t1_jbunfxc wrote

Good question; looking online it appears it would be funded by a government loan paid for with future revenue. Basically, instead of future profit going back to shareholders in other countries the money stays and pays off the debt for the acquisition:

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From here: Maine Creation of Pine Tree Power Company Initiative (2023) - Ballotpedia

State funds or tax dollars: Requires no use of state funds or tax dollars

The company would not be permitted to use general obligation bonds or state tax dollars, and would be financed by issuing debt against its future revenues to purchase facilities of electric transmission and distribution utilities that are owned by investors in the state.[1]

From here: FAQ - Our Power (ourpowermaine.org)

Will creating Pine Tree Power impact our state budget?

No. Pine Tree Power will not use our tax dollars. Utilities use revenue from rates, not taxes, to pay for investments and operations. If anything, by reducing our electric rates over time, it will help to attract and retain business investment in Maine, boosting incomes and easing tax burdens.

What would Pine Tree Power cost ratepayers?

Not more in the short term, and far less than we’ll otherwise pay in the long term. When Pine Tree Power purchases the systems of CMP/Avangrid/Iberdrola (owned by Spanish banks and the governments of Norway and Qatar) and Versant/ENMAX (owned by the government of the City of Calgary, Canada) like a home mortgage, the cost will be amortized. Pine Tree Power will qualify to borrow funds at lower interest rates than investor-owned utilities, which will reduce the cost of future capital expenditures, saving $9 billion over 30 years. It will also save us all money by not shipping profits to investors and owners out of the State and out of the country.

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Coffee-FlavoredSweat t1_jbv4qak wrote

> Basically, instead of future profit going back to shareholders in other countries the money stays and pays off the debt for the acquisition

Goes to the profit of some other company that Pine Tree Power will contract to manage our electric grid.

Sorry, fixed it for you though.

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tehmightyengineer t1_jbv5103 wrote

Well, yes, it goes to more than just the debt. It would be a stupid and instant failure of a business if the entirety of its revenue went to debts.

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Coffee-FlavoredSweat t1_jbv9a60 wrote

You miss the point. Your post mentioned profits not going to private companies. But it’s Pine Tree Power’s plan to contract services to a private (assumed for profit) company.

So not only will we be paying back the debt on the bond, but we’ll still be paying profit to whichever company Pine Tree Power contracts with.

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10printman t1_jbve884 wrote

Doesn't the proposal for PTP state CMP employees can continue to work at the same pay if they choose? Also if PTP does contract out some work to private companies would it be safe to assume they would be local contractors? Can't we give preferential consideration to Maine owned businesses for contracts?

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Coffee-FlavoredSweat t1_jbvgz40 wrote

Yeah, PTP’s plan is to take all of CMP’s assets (employees, vehicles, equipment, infrastructure, everything) and contract them to the successful bidder who will manage the business.

I’ve worked in procurement so I can say, yes, you can give preference to Maine Businesses, but it’s a pretty limited window. Like, if two companies are right about even, you can give preference to the maine business, but if they’re like $50 million apart, the fact that one is a maine business is meaningless.

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salvelinustrout t1_jbx61nn wrote

This is correct. If PTP were created it would essentially be an elected board overseeing the utility assets and operations, and they’d have to hire a management company. When Long Island Power Authority — the only example of a consumer takeover, rather than a utility that was founded as consumer owned from the outset — was created, they contracted first with National Grid, then fired them after mismanagement led to a dismal response to Hurricane Sandy (among other issues, including continuously mounting debt) and then with Public Service Enterprise Group (PSEG), the largest utility in neighboring New Jersey. It did not go well. So, the “operator” contracted isn’t likely to be a Maine company, because there will be no more Maine IOUs to bid for such a contract. Maybe another utility operating in New England would bid, like Eversource or Liberty or National Grid or PPL, but that probably depends on whether they’d be able to profit sufficiently and whether working for the elected board seemed like a sound business move.

While PTP says all CMP and Versant’s existing employees (other than management) would be allowed to stay on, the IBEW has pointed out that there’s no way to guarantee that and there’s a very good chance if they were they wouldn’t be allowed to organize, so this is potentially the biggest anti-union proposal Maine will ever consider.

Also I’m undecided on the referendum—I like the concept but am curious whether these issues that were raised when it was in the legislature have or will be addressed. Another issue for another post is why the elected board would have two seats per county — that’s flagrant rural gerrymandering! The 17k people who live in Piscataquis County would have the same number of board seats as the 305k people in Cumberland County.

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Salty_Simp94 t1_jbvtq2p wrote

I didn’t realize one of the initiatives was for pine state power to be 100% renewable. I wish they’d drop that requirement- the net energy billing is already costing a fortune and is incredibly regressive punishing the poor and benefiting rich urbanites with solar panels.

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