Expert Who Served 4 Maine Governors: Mixing Politics, Energy Regulation Is Bad for Business

By Fishell, Darren | Bangor Daily News (Bangor, ME), February 17, 2017 | Go to article overview

Expert Who Served 4 Maine Governors: Mixing Politics, Energy Regulation Is Bad for Business


Fishell, Darren, Bangor Daily News (Bangor, ME)


PORTLAND, Maine -- Over a solar power policy, Gov. Paul LePage said he would fire his three appointees to the Maine Public Utilities Commission, if he could. But there's a good reason the governor can't do that, according to the commission's former chairman.

"The irony is that it's a very business-friendly approach to have that kind of stability," Tom Welch, a three-term PUC member and energy attorney who represented Central Maine Power Co., said in a telephone interview Thursday.

Since retiring early in 2014 from his third term on the commission -- as LePage's first PUC appointee -- Welch has served as a consultant on projects in eastern Europe, with the general aim of helping to create a "climate of independence" for utilities regulators in countries including Albania and Moldova.

There, he said, the first question investors want to know is how insulated utilities regulators are against changing political winds.

That's because investors' recovery of their costs depends, at times, on the commission making an unpopular decision, such as raising electric rates to cover costs it finds are necessary to maintain a safe and reliable electric system for all consumers -- even those in the most remote service areas.

"If [a government] ministry can reverse or remove the decision, then the investors will say why would we ever invest here?" Welch said. "People are going to put money where they see predictability and a higher value for cost recovery. And if you don't have those two things, then you're going to get an inadequate system. End of story."

The situation can make for tension between regulators and the governor, lawmakers and politically motivated interest groups, but Welch said that's natural because regulators have a different role.

"Inevitably, somebody's ox is going to get gored in a decision, and they are going to claim -- if they believe it's to their political advantage -- any number of things," Welch said. "The commission has developed kind of a thick skin about that."

Welch, who served two consecutive PUC terms from 1993 to 2005 and part of a third from 2011 to 2014, said every governor he's dealt with -- two Republicans, a Democrat and an independent -- at times had frustrations with the commission and the slowness of crafting energy policy.

Maine makes up about 10 percent of the load on a regionally managed electric grid, making it hard for state policy to influence any larger shakeups in the market. …

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