This a good question! commenting to see answers later

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.

> The Pine Tree Power Company is not permitted to use general obligation bonds or tax dollars of the State. The company finances itself by issuing debt against its future revenues to purchase the facilities of investor-owned electric transmission and distribution utilities in the State.

This is a direct quote from the initiative petition. Basically a mortgage secured by the revenue generated by the non-profit.

I'd also like to learn more about the specifics of this process. When Pine Tree buys these assets from CMP... who sets the price of these assets? Also, aren't interest rates on debt at extremely high levels right now? Does that affect the numbers?

I just moved here like 4mo ago and I’ve heard the drama of CMP/PTP. Is there going to be a vote on this issue? If so, when? If not, is there anyone (representatives, CEOs, etc) whose phone I can blow up? I came from TX where privatized electric companies left me without electricity for five days in that one Feb freak snowstorm. Not gonna let private companies push me around and ruin my new paradise.

The bonds are state issued and ultimately guaranteed by the state so the interest rate will be very low. That's the key to making the numbers work. The interest rate will be roughly half of what the utilities GUARANTEED profit margin is. That's fairly simple math in favor of the takeover.

> 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.

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.

CMP is a private company that puts the needs of their investors ahead of their customers.

Sounds about right…despise that stuff. Same crap that kneecapped the grid in TX. They got kickbacks from the feds and pocketed it instead of winterizing the natgas lines.

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.

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?

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.

It's also a double bonus. Since you are from TX I assume you loved the windmills they had. Having the government in charge means they will focus on clean windmill power. We can finally get consistent clean windmill energy without having to deal with backwards folks who only care about having the lowest energy bill.

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.

Why dont you try living here for a while before you start trying to change it...

Why don’t you try living in a capitalist fascist hellscape for 16 years before commenting on what it’s like and why I don’t want that here?

Do the math on versant profits last year, and you will see it will take the state over 200 years before a profit is seen... you all want to be mad at the power company for raising rates but you want to hand the companies over the state government who already fucked you once by giving millions in grants to companies to build solar fields and wind mills instead of giving you the money to build a private solar set up on your property to actually allow you to pay less in power cost as well as help the "green" movement. Be mad at your government, not companies, for making a profit

You're no different than the rest come here and instantly want to change things without knowing the facts or what its like to really live here, people like you are what has sent this state into a down hill spiral. You think the government controlled power is such a great idea. Let me tell you a few facts. 1. 5 days without power is common here. If you can't handle it, go home. 2. Maintenance and repair will be awarded to the lowest bidder (contractors) when there is a major storm in the south contractors go there to make money so if 5 days is to much for you, you better brace for double that i have worked hand and hand with contractors and they dont care about you or the old lady down the street but guys who work for the Company and live here do. 3. The state can't even fix the roads here. What makes you think they can handle running the power grid.

Using terms like "capitalist fascist hellscape" leads me to believe you went at least 2 states to far north...

Them there folks from away know betta, or at least like to think they do.

Damn you’re a lead drinking mouth breather aren’t ya? Get bent

With a little searching, Versant was CAD$73 million net profit in 2022 per Microsoft Word - 2022 YE FS - March 8 (enmax.com). CMP had net profit of $132 million in 2021 per CMP 2021 Q3 Notes (q4cdn.com). Call it $185 million total profits annually for both.

Some back of the envelope math. Based on the LEI report on Pine Tree Power's website, it appears the cost to buy out Versant and CMP will be $3.5 billion. At the 3% they say they'll get on the loan, that's $11.3 million every month for a simple 50-year loan repayment, or $135.6 million every year. That leaves $49.4 million of extra profit; more if AVANGRID/Iberdrola and Enmax have debt from their acquisitions.

So, if you do the math there's profit in this acquisition. And that was a super simplified calculation not taking into account anything related to interest, inflation, etc.

Per the LEI report they indicate that electricity rates would initially be higher but would then stabilize and break even in 9 years; then reduce forever after that.

Thanks for the exercise as it made me dive deeper into this, but I believe you're 100% wrong. It will not take 200 years before a profit is seen.

>who sets the price of these assets

Agreement between the various parties, but if there's disagreement then the courts. And, as with any emanant domain takeover, the government generally pays above value. I've seen everything from 130% to 200% of the value thrown around in reading about this.

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What makes you think PTP would only have OOS workers? You must work for CMP and are worried about a cut in pay and benefits. I get it if you are, but jeez, just be honest about it, don’t make up fake reasons to not do this.

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There was a London Economics report done a few years ago to look at the effects of LD 1646 which was a similar idea to Pine Tree Power, consumer owned T&D services in Maine. The funding is a little different structure in this proposal but the report shows that even if it’s funded by tax-exempt revenue bonds, utility rates are likely to stay higher until the loans are paid off down the road. The interest rate on the bonds would likely be cheaper than CMP or Versant’s allowed return on their rate bases, but the assets will need to be bought out at a higher market value, not their current book values, which could offset the difference in interest and return rates. On the flip side if they were not subject to state taxes that would help lower utility rates. I don’t know if financial projections have been done yet for Pine Tree but it’s hard to really see these effects without a laid out plan.

The report also argues that at the very least taxes will likely go up, not to fund the new company, but to offset lost tax revenue from the privately owned T&D companies.

Another interesting point is that if they were consumer owned they would not be subject to the same PUC rate scrutiny, and the board would likely be made up of the governor’s choosing, so transmission and delivery rate structure could be influenced more by board members.

I’m not sure where I stand on this yet, but it seems like there are a lot of questions still to be asked and this London Economics report at least helps walk through the areas to keep in mind.

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.

I do not work for CMP or Versant but its just simple to know that there is not a contract company large enough in the state to handle it dame gose with all the new internet builds around most of them are OOS contractors its not fake reasons i do work utility work and i do have first hand insight on work done by contractors and by in house guys and it dosnt matter who what when or where the contractors always give zero fucks and leave things unsafe and slapped up to poles after storm repairs.

Sorry, did the facts hurt your snowflake feelings?

r/onejoke but it’s ok, your damaged brain literally can’t come up with something more clever, do basic critical thinking skills, or understand simple human empathy. I’m not going to sit here and argue with someone whose brain is literally physically incapable of these basic things, it’s like arguing with an underdeveloped, drooling toddler. How about you go lie down for a nap and let the adults talk ?

Also, get Ratio’d

My critical thinking skills are pretty simple. It all breaks down to one thing, when the government does anything. It's completely inefficient and over expensive, but as i said before why dont YOU try living here before you instantly decide you want things to change, for fuck sake you dont even know the issue and your all for it. in your original post, you didn't even know who the power companies are, yet you're for change. Your frothing at the mouth at the idea of a company making a profit. Your ideals are not welcome north of Agusta. Before you try and tell me how things work here, you should try figuring them out for yourself. Im assuming you probably dont even know what gender you are by the nonsense that you spew without, knowing any facts or even the basic issue,

LOL no it’s not. You are looking at one out of thousands of cost elements.

You should divorce from CMP through the legal and ethical process that already exists, but there is nothing simple about this deal. I can’t tell if the people presenting it are naive or dishonest. Maybe both.

I’m 100% in favor of revoking CMP’s franchise or rejecting every rate hike request until they leave voluntarily. You can then have an orderly sale of assets with PTP being one bidder out of several. Then you can choose the best mix of cost, resource plan, etc. vs just pointing at one entity and saying they win.

At my company anything over $50K requires multiple bids, and you guys want to sole source a contract with a value greater than the entire 2023 state budget. And that’s just the purchase price - you need a shitload of capital too.

r/onejoke and Ratio’d again. Give up bro, it’s over, everyone here knows you’re wrong, you’re on the wrong side of history and you always will be. You’ll be forgotten as an old fashioned bigot and no one will want to wipe your ass in your sunset days because you’re an insufferable, crusty, unwashed taint. You will die alone, and when you do, everyone will breathe a sigh of relief that you are gone. What a sad waste of a life.

Imagine if we just had a simple bidding process rather than sole sourcing to one company that doesn’t exist yet.

Now further imagine you’re an employer considering investment in a state where the government just points at your shit and takes it when they want.

You seem knowledgeable about this so could you elaborate? Just from reading headlines 10B purchase price and 100M per year profits from cmp seem reasonable assumptions, with no interest (ie interest matches inflation) it would take 100 years to pay that down.

Typical, far leftists, nothing els to say to through insults until you think something will stick, im not worried about my future i make more than enough to be fine, the only insufferable thing here is the fact that you moved here and brought your broke ideas with you, call me what you sant but im sure your living in portland with 300k in stufent loan debt crying about how the worlds unfair go home we dont need or want you here

The $10B (or 13, or whatever gets decided after years in court) is just for the assets CMP already owns. Actually operating the utility will take hundreds of millions per year.

Some individual storm restorations in New England have cost tens of millions in a week. Isaias in CT cost over 100M for one utility.

Unless there is better accountability, Key Performance, Indicators, in business lingo, by the utility, whoever it is, we will end up here again. I’m on the fence. Not gonna lie.

How is this going to save any money?

Yes, but operating expenses plus 100m are already covered by the existing income.

They’re covered by a mix of prior income and credit. To have cash, they need to have charged someone money in the past, which they haven’t.

So all of this talk about just buying the assets and skipping away ignores the money it takes to actually serve the customers. A distribution system is a very hungry animal, especially when the weather is bad.

Really great question!

One thing you bet is not considered or thought about is how many departments are consolidated into one group say at their headquarters.

You can bet CMP doesn’t have a full HR department, maybe one person that here full time but the rest will be at the headquarters. Dames goes for many other departments that doesn’t need to be at CMP when it can be located at NY or CT. I heard how they pull linemen from other OPCO when a big storm hit and so on.

A new Pine Tree Power will probably need to hire hundreds of new workers not accounted for driving up cost

Totally agree, and see a huge lack of understanding of these things in the posts I read.

I don’t think the politicians behind this even know how it’s going to be funded.. they say one thing but it always seems to be another. The billions of dollars this initiative will put on ratepayers is worrisome. I get rates are high currently and we need to hold our utilities companies accountable for that, but this COU would be even worse for the state. You think your bill is high now? If they takeover the grid just wait..

How can you be so sure they will focus on clean power when PTP will have no more control over the supply source than CMP or Versant? Not to mention that PTP was designed after LIPA which after 30 years is in billions of debt, have rates higher than ours and are far behind in renewable energy efforts. How can we know that PTP would be any different?

I dont understand how spending billions to buy these private companies out solves or saves anything in the short term or long term? BILLIONS to take it over and then MILLIONS to get it up and running. Our Power has made some bold promises with no real examples. The only example of this model (Long Island) is failing miserably with billions in debt, higher rates than Maine and they are below us in renewables and climate goals. Thats the model we are thinking of using? YIKES. They're asking Mainers to put billions of dollars in debt on their shoulders and hopefully (with no examples) brighter days are ahead. Maybe someday but right now im not on board with this idea.

It's on the official website

There are lots of questions that have been left unanswered regarding PTP's plan. The lack of transparent information along with the enormous debt we'd take on is pretty scary. I just want to see my bill lower but it's clear that PTP's plan won't achieve that.

Same. It feels like a lose lose situation to be honest, and if that is the case then I don't understand why not just stick with CMP. And also, why not redirect our anger and frustrations to the PUC and elected officials? We have these regulatory bodies in place why not use them?

It will be bonds taken out against revenue. Similar to the MTA. However, the MTA is very expensive. It costs $10 in tolls round trip from York to Portland. PTP claims rates will drop 10% on “day one” but that’s not realistic. Rates will be higher for probably ten years, there is a London Economics Report that shows rates staying high and actually rising in certain years. Plus, that was done before the almost 4% rate hike. With banks failing (SVB), money will likely be even harder to get.

Not to mention, supply has risen 120% over the last two years, PTP will do nothing to address that. And, that imo is the most crucial issue. I will not be voting for PTP until they figure out supply.

Just because it is on their website doesn't make it a fact. There are many promises that PTP is making about increasing reliability, lower cost and cleaner energy sources, but at the end of the day they really haven't proven how they will make any of those things happen. A multibillion dollar debt for no proven reward is quite risky. Buyer, beware.

Izzygreene207 is a CMP shill account. There are several accounts made on September 7th and 8th in 2022 that just defend CMP.

I have lots of questions too. Like why are there so many accounts that solely defend CMP and were also created on September 7th or 8th?

Says the 8 day old account’s first post.

I don’t understand how CMP can pay Sea Salt and Spruce a half a million dollars for this weak effort. I can’t tell if making all of your shill accounts on September 7th and 8th 2022 comes from laziness or inexperience.

100% agree. It's just a lot of "CMP BAD!" because it's (supposedly) an evil, private, foreign-owned company that just cares about money and raises rates for no reason. The idea that some politicians in Augusta will be able to not just take over, but do a better job, is dangerously naive. It will suck, be a lumbering, bureaucratic nightmare that will result in a whole lot of Mainers without power.