The Department of Economics hosted Dr. Richard Silkman, a nationally recognized expert in the regulation of public utilities, to discuss the arguments for and against the proposed creation of the Pine Tree Power Company in Hubbard Hall last night.
In the upcoming referendum vote on November 7, Question 3 will ask Maine voters whether the state should create the Pine Tree Power Company, a non-profit coalition that would be governed by an elected board and would acquire and operate all existing private electricity transmission and distribution facilities in Maine. If the question passes, Pine Tree Power will replace the existing for-profit utility companies in Maine, which are Central Maine Power (CMP) and Versant Power.
Silkman began the talk by openly declaring his support for Pine Tree Power.
“The primary reason why I support Pine Tree Power is because over the next 30 years, if we are going to be successful in decarbonizing the use of energy and developing zero carbon resources, we’re going to have to spend a lot of money,” Silkman said.
Silkman argued that the cheapest method of raising capital is through public authorities selling municipal bonds. Thus, to facilitate the transition away from fossil fuels, a publicly-owned utility corporation would be more efficient in making investments towards a carbon-free electricity grid.
Regarding the energy market in Maine, Silkman noted the unique control of CMP and Versant over the electrical grid that gives people less say in how they access power.
“Electric utility companies own the grid. … so, when anybody else [connects their own power generation], it is competing with them, and the general response of utility companies is, ‘You can’t do that with our grid, we can’t control you and we don’t want you on the grid,’” Silkman said.
According to Silkman, this level of control inhibits the free development of the electric grid. Silkman used Bowdoin’s own development as an example of this in Maine. Bowdoin has considered installing its own battery to be charged during cheap, low-usage periods of the night and used during expensive, high-usage periods of the day. Not only would this be a cost-saving measure for Bowdoin but it would also reduce stress on the power grid during peak demand periods.
However, the proposition was rejected by CMP after a CMP-backed study focused on the possibility of Bowdoin accidentally charging the battery during peak demand time which would overload the power grid. According to Silkman, this scenario is highly unlikely.
Silkman also addressed the concern of economic inefficiency caused by government intervention but pointed out that private companies have not been immune to mismanagement and poor financial decisions.
“I taught at Stony Brook University for a few years where a private lighting company went bankrupt because they spent a ton of money on a nuclear power plant, which turned out to be a disaster and ended up costing so much money that they couldn’t make ends meet,” said Silkman. “They are now run by a public authority called Long Island Power Authority. On the first day they took over, rates went down about 20%.”
A variety of students and community members attended Silkman’s discussion hoping to better understand environmental energy policy and the upcoming ballot vote.
“I think talks like this help supplement my understanding of economics and environmental policy. It’s a relevant issue that applies to all of us,” attendee Paul Wang ’24 said.
Ed Minot ’70 also found Silkman’s remarks helpful in understanding both sides of this ballot question.
“I’m trying to come up to speed on the eight different referendums coming up in November and [Pine Tree Power] seems to be a particularly important one,” Minot said. “This talk seemed like one of the least biased presentations even though Dr. Silkman was openly in support of Pine Tree Power.”