Maine PUC Asserts Right to Review Utility EWG Investments

The Maine Public Utilities Commission (PUC) has rejected a settlement agreement that would have allowed Central Maine Power Co. to invest $30 million over the next three years in unspecified, unregulated power projects. The utility originally applied to create exempt wholesale generation (EWG) entities and related subsidiaries. It eventually agreed to prohibitions on purchasing power from the subsidiaries as well as limits on the transfer of utility assets and debt guarantees, in return for authorization to set up and capitalize the new companies without further commission review.

The PUC said it was unwilling to relinquish all its review authority for any project, given the "somewhat fragile" financial condition of the utility and the risks associated with investment in unregulated power ventures. It offered instead to approve a modified agreement requiring limited oversight of proposed investments until the utility receives an investment-grade rating from two of the three major bond rating agencies. To protect ratepayers, the modified agreement assigns risk to shareholders and limits sales and asset transfers by the utilty. Re Central Maine Power Co., Docket No. 93-251, Oct. 5, 1994 (Me.P.U.C.).