Legislative committee questions electricity program staff

Staff explains how electricity consortium helps clients buy power.
A sign reading DANGER HIGH VOLTAGE is affixed to a pole behind a chain link fence.
Maine PowerOptions (MPO), a state-sponsored electricity consortium, appeared before a joint legislative committee Feb. 2 to explain its operations and benefits for members.

AUGUSTA — For the first time in 16 years, the staff of Maine PowerOptions appeared before lawmakers Thursday to answer questions about how the quasi-state program brings together hundreds of municipalities and school districts to help them buy electricity.

The hearing followed an investigation by the Maine Center for Public Interest Reporting last month that found virtually no proof that up to $500 million in taxpayer money that the program has directed to a single electricity supplier over the past 16 years has been well spent.

Legislators on the Joint Standing Committee on Energy, Utilities and Technology raised concerns about the transparency of Maine PowerOptions (MPO), which has received no scrutiny from lawmakers since its establishment in 1999.

Michael Goodwin, the executive director of the Maine Municipal Bond Bank, which oversees the program, defended MPO and its operations.

“I feel our process is open and transparent,” he said. “We hear from our members regularly, and the feedback has been consistently positive.”

The Center’s report in January revealed that a single supplier, Constellation and its corporate predecessors, had won every bid to be the program’s energy supplier since its inception. As part of its agreement with MPO, Constellation, a subsidiary of energy behemoth Chicago-based Exelon, pays all of the program’s operating expenses, including the salaries of the quasi-state electricity consortium’s staff.

Maine PowerOptions is operated as a program of the Maine Municipal Bond Bank
Maine PowerOptions is operated as a program of the Maine Municipal Bond Bank, a quasi-state agency

Goodwin stood by the arrangement, saying the program was but one option available to municipalities, nonprofits, and water, sewer, and school districts. “They can take it or not take it, if they decide there’s a better deal for them.”

Rep. Deane Rykerson (D-Kittery) asked for proof that MPO had struck the best deal with Constellation. “Is there any evidence?” he said.

“I cannot give you any evidence of that. Our contracts aren’t made public,” Goodwin said.

Rep. Janice Cooper (D-Yarmouth) continued to question the transparency of the arrangement between Constellation and MPO.

“The supplier is paying for the salaries of the people who craft the RFP [Request for Proposals]? Do you see that as a conflict of interest?” she asked.

Goodwin denied there was a conflict, calling the process “robust.”

“There is a level of trust involved, I agree. But it’s trust we’ve earned over 16 years,” he said.

The Center’s investigation, which also supports the findings of a confidential 2013 probe conducted by the state Office of Policy and Management, found that MPO had kept few public records of its meetings or decisions, despite influencing the spending of tens of millions of taxpayer dollars each year. Although each MPO member contracts directly with the electricity supplier, the program runs the bidding process and negotiates the fine print of the agreement each member signs.

Following Goodwin’s presentation, one senator said he plans to ask for a formal inquiry into MPO by the legislature’s investigative arm.

Sen. Geoffrey Gratwick (D-Bangor), a member of the Government Oversight Committee who sat in the audience but did not participate, said he planned to recommend that the Office of Program Evaluation and Government Accountability begin an inquiry into MPO.

“I was perplexed,” he said. “They didn’t answer any of the fundamental questions. How can municipalities know they’re getting the best deal?”

Rep. Cooper said after the meeting that municipalities and the public should take note of MPO and the way it does business.

“I don’t know that anybody cares,” said Rep. Cooper following the meeting. “But they should care, because this is about getting the best rate for taxpayers.”


Dave Sherwood

Dave Sherwood is a staff reporter for the Maine Center for Public Interest Reporting.
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