AUGUSTA — The state Public Utilities Commission voted unanimously Tuesday to investigate allegations by city of Augusta officials that Central Maine Power improperly used ratepayer resources to try to help its affiliate, Maine Natural Gas.

Stephen Langsdorf, city attorney, said the commission’s decision to open a case and investigate what CMP executives have done on behalf of Maine Natural Gas is important because only ratepayers who are a customer of a utility should be paying the costs of operating that utility. And if CMP officials used the company’s goodwill or reputation to try to benefit Maine Natural Gas, CMP ratepayers should be compensated for that.

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Central Maine Power is being investigated by the state Public Utilities Commission following allegations made by the city of Augusta that the utility improperly used ratepayer resources to try to help its affiliate Maine Natural Gas. Staff file photo by Joe Phelan

“They’re allowed to assist them, but they have to keep accounting (for that time) and properly charge it back with the company getting the assistance,” Langsdorf said. “And we’re not sure that occurred in this case. It appears CMP is improperly exerting its influence on the public and certain companies for the benefit of its affiliated company,” Maine Natural Gas.

Both the electric company CMP and gas company Maine Natural Gas are owned by parent company Iberdrola USA.

The investigation, according to PUC Chairman Thomas Welch, will look into which CMP officials did what for Maine Natural Gas, how much time it took, whether it was protected or prohibited activity, and whether that time was accounted for properly.

However, the commission’s investigation will not look into CMP’s lobbying efforts in favor of a proposed bill that city officials said was pushed by CMP as retribution against the city. The legislation, L.D. 1754, could have cost the city much of the roughly $300,000 a year the company pays the city in excise taxes on some 500 company vehicles in Augusta. The bill was killed by the Legislature.

Gail Rice, a spokeswoman for CMP, said the company strives to properly account for all work done involving affiliates.

“We’re encouraged the commission supported our free speech argument (by declining to investigate CMP’s lobbying activities on behalf of L.D 1754) and narrowed the scope,” of the investigation, Rice said Tuesday. “But disappointed they’re moving forward with the investigation of the rest of it. We’ll cooperate fully with the investigation and do strive to comply with all regulations.”

Commissioners ruled the ability to petition the government — more specifically in this case to lobby in favor of legislation — is a fundamental right protected by the First Amendment. And commissioners noted in their order, recommended by staff, “This right is not diminished when an allegation is made that a person is exercising that right in order to advance an anticompetitive goal.” The commission order further notes, “Even conducting a limited inquiry into CMP’s activities before the Legislature would have a chilling effect on CMP’s protected rights.”

City of Augusta officials, in a formal 10-person complaint to the commission, alleged CMP improperly used its resources, including the time of President Sara Burns and other CMP staff, to wage a battle of retribution against the city on behalf of its affiliate Maine Natural Gas.

The complaint said officials of CMP and Maine Natural Gas were upset with city officials for how they handled the bid process to procure natural gas service for city buildings. Maine Natural Gas withdrew its bid for the work after the city allowed its competitor, Summit Natural Gas of Maine, to change its prices after bids had been submitted. The complaint alleged CMP was improperly using its resources and CMP’s clout to punish the city for its perceived mistreatment of Maine Natural Gas, and to win customers in the area. Those efforts, the complaint alleges, included CMP executives accompanying Maine Natural Gas officials on some visits with local potential customers, and Burns calling the city manager and mayor while the city was considering which of two competing gas companies to choose to provide the fuel to city facilities.

Regulated utilities such as CMP must account for how they spend ratepayer funds, and cannot spend them to benefit another affiliated utility, such as Maine Natural Gas.

While regulated utilities can allow their workers to spend time working for the benefit of affiliates, their time must be properly accounted for and billed to the affiliate receiving the benefit.

Welch said Tuesday before the commission vote he agreed with the PUC staff recommendation that an investigation is warranted to find out what happened and whether it violated any rule, law or order.

“It is certainly not obvious to me the existence of a service agreement permitting CMP to do certain things for (Maine Natural Gas) would trump a prohibition on CMP using its influence to improve its position vis-a-vis competitors,” he said.

Langsdorf said possible punishment of CMP if it is found to have improperly co-mingled resources could include fines or a remedial order.

Keith Edwards — 621-5647

kedwards@centralmaine.com

Twitter: @kedwardskj

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