April 04, 2020

Side agreement sticking point in PUC approval of CMP sale

AUGUSTA — The head of Central Maine Power Co. expressed optimism about winning regulatory approval of the utility’s proposed $846 million power plant sale as details of the deal were explored Wednesday at a Public Utilities Commission hearing.

“I think the deal is on track,” CMP President David Flanagan said after sitting in on part of the commission hearing.

Flanagan said the sale would “relieve us of more than half of the stranded costs that are out there” by producing cash to pay off debt and result in a 10 percent reduction in rates. Stranded costs are the expenses utilities incurred under regulation that they won’t be able to recoup in a competitive market.

CMP’s deal with Florida Power & Light has drawn increased scrutiny in light of a side agreement between the two companies that involves access to the New England Power Pool transmission grid.

The side agreement, which has been incorporated in the full package up for commission approval, provoked opposition from some potential supporters of the proposed sale, including state Public Advocate Stephen Ward and the Industrial Energy Consumer Group, a coalition of high electricity users.

James Broadhead, chairman and chief executive officer of FPL, declined to say what FPL would do if the side agreement was removed from the package.

“We’re not a party to this hearing now before the PUC, and it would be inappropriate to comment,” Broadhead said Wednesday at the Portland Holiday Inn by the Bay, where he addressed the Chamber of Commerce.

According to Ward, the most controversial provision would give preference to FPL plants on the regional power grid even if new plants producing cheaper power are brought on line in the future.

Ward has urged the commission to approve the sale but express its dissatisfaction with the side agreement in hopes of influencing the Federal Energy Regulatory Commission.

Have feedback? Want to know more? Send us ideas for follow-up stories.

comments for this post are closed

You may also like