Who controls our electric grid?

You might think this is a simple question. But four legal briefs filed recently with the Public Utilities Commission describe vastly different ideas about what “control” of our grid really means.

At the root of this is a proposal by Iberdrola, the Spanish conglomerate that owns a majority interest in Avangrid, which owns Central Maine Power. Iberdrola’s proposal would increase its ownership share of Avangrid from 81% to 100%. If the proposal goes through, our electric grid will be totally owned by foreign investors.

Before your eyes glaze over, let me say that this case could have important implications for CMP customers.

It’s all about who controls our electric grid. Whenever there is a change in both ownership and control of our electric utilities, there’s a legal requirement for a PUC review process to prove a net benefit to ratepayers.

But Iberdrola has requested the review process be waived. It says it already has “control” of Avangrid because it owns 81% of its shares, so there’s no need for review.

But as three intervenors in the case point out, “control” over our utility has many shades and definitions that go beyond pure financial control. In their view, if our electric grid becomes 100% Iberdrola-owned, a certain amount of transparency and accountability that we now have would be lost. For example:

1. If Iberdrola buys out Avangrid’s shares, Avangrid would no longer be listed on the New York Stock Exchange. And the company would no longer be subject to Securities and Exchange Commission (SEC) rules. Under SEC rules, Avangrid’s financial documents must be made public. Even though just a few people read them, the fact that they are available provides a level of corporate accountability.

2. If Iberdrola buys out Avangrid’s shares, the shareholders who now own 18% of the company’s stock would be eliminated. Under U.S. law, shareholders have a bundle of rights. These include the right to attend corporate board meetings, vote for board members and put forward shareholder initiatives requesting action from the company board. Even if shareholders don’t exercise their rights, the fact that they can provides another level of corporate accountability.

The three intervenors in the case are the Public Advocate, the Natural Resources Council of Maine and Our Power. All three are requesting a full fact finding and investigation by the Public Utilities Commission. They want to know exactly how ratepayers might be affected by the proposed ownership change. And all three recommend that the PUC require Iberdrola to show a net benefit to ratepayers before the deal can go forward.

Further, to meet our state climate goals, we need to significantly modernize, upgrade and invest in the grid. To accomplish this, regulators, lawmakers and the public need to have a close working relationship with our electricity providers. The current Iberdrola proposal takes us a step away from what we need.

As CMP customers, we should be glad the intervenors are looking out for our interests. A good way to show your support is to contact any of them and let them know you care about this issue.