Power to the People?

This Week's Trend In Brief:

• This past Tuesday was election day in many parts of the U.S., and while most political pundits focused on marquee races like the Mississippi and Kentucky gubernatorial campaigns and which party secured control of Virginia’s legislature, sharp eyed energy industry public affairs professionals were laser focused on a referendum in Maine that received little coverage.
   

• The ballot measure, which would have seen a taxpayer-funded board take control of 97% of Maine’s electric power, came after years of consumer and legislator angst over utility missteps and concern from some corners about foreign ownership of the utility’s holding companies, but a significant driver of the referendum’s supporters were “perceived roadblocks [from the utilities] to connecting renewable power projects to the grid.”
   

• Indeed, as we’ve noted before, a growing cohort of climate activists hope to “speed the clean energy transition by allowing policymakers to have direct control of energy generation and distribution,” and many of these groups were key supporters of the Maine ballot initiative campaign.
   

• While Maine voters disagreed, the loss is unlikely to discourage activists across the country seeking municipalization of electric utilities, even if such public control may not be the clean energy silver bullet advocates believe it to be.
   

• As activists continue to promote municipalization in communities across the country, energy sector public affairs professionals will need to fully understand which groups are driving the debate, how much influence they have with policymakers and the public, and what impact such a shift of control would have on the industry’s ability to achieve a lower carbon future that maintains reliable and affordable energy.
   

 
Digging Deeper:

 
While this past Tuesday’s election coverage focused on headline races in Kentucky, Mississippi, and Virginia, many energy sector public affairs professionals were focused on Maine, where voters soundly rejected a ballot measure to replace the state’s two investor-owned utilities with a state-run utility. If passed, the referendum would have placed 97% of the state’s electric power in government hands. Critics, including Maine Governor Janet Mills (D), worried about politicizing the power grid, questioned savings projections in the proposal, and warned of years of litigation if the takeover was approved. Ultimately, Central Maine Power and Versant Power were able to ward off support for the referendum campaign in part due to the millions spent opposing the measure.
 
Maine’s ballot measure was the latest in a growing push for municipalization across the United States by progressive climate activists who believe government control is the only way to speed the shift to clean energy. While Maine’s measure was driven in part by claims foreign companies put profit before reliability and service, many of the groups supporting the ballot initiative cited “perceived roadblocks [from the utilities] to connecting renewable power projects to the grid.” Many of these groups or their national umbrella organizations are part of the broader push across the country to seize private power assets to address climate concerns. In recent years, municipalization efforts have picked up in places like Ann Arbor, Michigan, Louisville, Kentucky, and New York. Proponents in San Diego, California hope to place the issue on next year’s ballot even as some local leaders remain skeptical. Frequently, advocates for these efforts have cited the need to meet renewable energy goals or address environmental challenges as a driving factor for their efforts to pursue public power even though many of these same groups frequently hinder private sector efforts to advance renewables.
 
Activists in Maine and across the country claim public control will improve reliability and decrease costs, but municipalization may not be the silver bullet activists believe it is. Pueblo, Colorado advocates claimed municipalization would lower electricity rates despite the need to spend hundreds of millions of dollars to acquire the local power assets from Black Hills Energy as part of the utility takeover. Pensacola, Florida advocates made the same claim despite evidence from Florida’s Treasure Coast that it won’t. California has considered a takeover of PG&E for years, despite the “decade-long, multimillion-dollar misadventure” in Hercules, California. Notably, even climate activist group RMI notes municipalization is generally not “a proven pathway for success” – a smart acknowledgement given it could actually slow utilities’ push towards green energy as companies embrace incentives from the Inflation Reduction Act and state governments. Yet the municipalization dream won’t die, in part because progressive groups like Democratic Socialists of America represent a growing portion of the municipalization movement. They increasingly hold broader sway with local pols and complicate efforts to dissuade policymakers from advancing these initiatives.
 
As activists keep up the municipalization push across the country, energy sector public affairs professionals will have to stay ahead of the debate. It will be key to fully understand which groups are driving the debate, how much influence they have with policymakers and the public, and what impact such a shift of control would have on the industry’s ability to achieve a lower carbon future that maintains reliable and affordable energy. Energy firms that build and leverage valuable connections with the right community stakeholders are better prepared to fend off municipalization advocates – hopefully before they have to spend millions stopping a referendum or ballot initiative. Check out Delve’s proven playbook to ensure your organization has an information advantage in navigating the municipalization debate and any other public affairs challenge.

Trends in Energy is your weekly look at key trends affecting the energy industry, brought to you by the competitive intelligence experts at Delve. As the political and regulatory landscape continues to shift, reach out to learn how our insights can help you navigate these challenges.