April 07, 2020

Solutions sought to pay storm bill > CMP, Hydro costs estimated at $60 million

BANGOR — The bill for Central Maine Power Co.’s ice storm recovery effort grew Tuesday to $55 million, while Bangor Hydro-Electric Co. estimated its costs at $5 million for storm-related expenses.

The new calculations come at a time when state officials are trying to free up federal emergency money to help cover the exorbitant costs of repairing electric transmission and distribution systems walloped by the recent ice storm.

CMP and Bangor Hydro are working to find alternative sources of money to help recover some of the costs.

Neither company insured their wires and poles because such a policy would have been too costly.

Clark Irwin, a CMP spokesman, said about 90 percent of the $55 million in recovery costs went to pay for labor. Irwin said both CMP and Bangor Hydro are looking at other federal programs for possible assistance, including grants through the Department of Housing and Urban Development and loans through the Small Business Administration.

CMP president David Flanagan is visiting Washington, D.C., on Wednesday to discuss possible financing from the different agencies.

Anticipating that CMP and Bangor Hydro will seek to recover their costs through rate increases, Gov. Angus King on Tuesday sent a letter to Vice President Al Gore asking for help to identify federal programs to reduce any possible hikes.

“The rate consequences for the residential, commercial and industrial utility customers will make their struggle to recover from the economic devastation caused by the storm even more difficult,” King wrote.

Dennis Bailey, the governor’s spokesman, said midwestern utilities were able to recoup some of their losses from recent disasters through the federal government. “We are going to ask them to do it here as well. This was an extraordinary situation,” Bailey said.

CMP officials said the company was looking for ways to keep any “necessary” rate increases as small as possible, including seeking federal disaster assistance. The utility said it wanted to stick with its previously announced goal of holding rate increases below the rate of inflation through 1999.

Some legislators say the state should be willing to use some of its budget surplus to help pay the cost.

State Sen. Richard J. “Spike” Carey, D-Belgrade, who chairs the Legislature’s Utilities and Energy Committee, proposed another plan.

He suggested the state use the onetime $60 million in corporate income taxes from the sale of CMP’s generation assets to Florida-based FPL Group Inc. to help with utility repair costs.

“This is ratepayer money and it should be dedicated to those people so they don’t get an increase in rates,” said Carey.

Although the state won’t get the $60 million until later this year, Carey is proposing that utilities such as CMP and Bangor Hydro, as well as municipally operated utilities, be allowed to borrow against those anticipated state revenues to help fund repair costs for restoring power.

The senator says ratepayers need some form of relief. He says many electric customers, who went without power for days and in some cases for more than a week, already face the cost of having wires put back on their homes — and some have incurred costs to stay in hotels or motels.

Gov. Angus King has no specific proposals on how the onetime $60 million in corporate state taxes should be used.

Bailey said there is assistance available for individuals through the Federal Emergency Management Agency.

“We need to exhaust all of our other sources before we start looking at this money,” he said.

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