DrMcMeow OP t1_j1x5z2y wrote
A group opposed to the creation of a consumer-owned utility turned in signatures Tuesday in support of a 2023 ballot question that would ask voters to approve any government debt over $1 billion.
The effort is in response to the Pine Tree Power proposal that would create a consumer-owned utility to replace Central Maine Power and Versant Power.
The group No Blank Checks turned in more than 93,000 signatures to the Secretary of State’s Office in hopes of getting on the November ballot.
“No Blank Checks is about as commonsense as it gets,” Willy Ritch, executive director of the campaign, said. “If we are going to be on the hook for billions of dollars in government debt, voters should get the final say on whether to take that on.”
In late October, Our Power turned in signatures to put a question on the 2023 ballot to create a consumer-owned utility.
Our Power estimates that the takeover would cost $9 billion, while No Blank Checks puts the cost at $13.5 billion.
No Blank Checks reported just over $1 million in contributions as part of its ballot question campaign, almost all of which came from Avangrid Management Co., the parent company of CMP.
On the other side, Our Power reported $543,401, with the top donor listed as Susan Bartovics, an environmentalist living on North Haven who gave $56,000, according to reports filed with the Maine Ethics Commission.
Earlier this month, both CMP and Versant ranked near the bottom on a nationwide residential customer satisfaction survey by J.D. Power.
Out of 145 utilities, CMP was second from bottom and Versant came in third from last, just above CMP.
The Secretary of State’s Office now has 30 days to verify the signatures.
N0mad87 t1_j1xr5bt wrote
Fuck Willy Rich. That organization 100% lied to Mainers and exploited Maine's ballot measure system.
Coffee-FlavoredSweat t1_j1ykd31 wrote
> Our Power estimates that the takeover would cost $9 billion, while No Blank Checks puts the cost at $13.5 billion.
And BOTH of those groups are only estimating the principal costs, they haven’t even considered the interest rates, which will be another $15 to $20 Billion over the life of the bond.
Some napkin math:
CMP Customers - 667,621
Versant Customers - 165,490
Total cost of a 30 year bond - $21 $24 Billion
Each customer’s responsibility - $25,000 or about $70 $80 per month
And that’s likely on the low end.
Everyone was crying about their electric rates jumping this past year. Just wait to see what they are when you actually own the mortgage on the power company.
zorphium t1_j1ymvi7 wrote
How do u get 21B from any of the numbers you provided above
TarantinoFan23 t1_j2286ig wrote
Because they lie.
Coffee-FlavoredSweat t1_j1ynq58 wrote
You’re right, it’s actually more than that, if I use 9 billion principal, and 15 billion interest, total would be 24 billion.
$80 per month per customer just for debt service, before paying for any actual electricity.
redcoat777 t1_j1z5blr wrote
where did you get your interest rate? what payment term did you use? Using a 15 year loan at 3.84% (current 10 year treasury bond rate) on a 9B loan gives 2.85B of interest. That is a monthly “payment” of $79 per customer per month, which funnily you did get right. And using some base assumptions about profit it seems your numbers there are in the right ball park. i got $20/mo. So it seems like for an extra $60 per month we get to own and control our own grid.
Coffee-FlavoredSweat t1_j1z8jsc wrote
There’s no way they would be able to finance $9B on a 15-year loan. It would likely be 30 to 35 years and closer to a 5% rate.
I did say that it was napkin math, though, and I’m just a guy on Reddit. You seem to have come to roughly the same numbers, though.
The $60 per month is just debt service for owning our own power company. Then we have to pay for the power generation, and transmission costs on top of that.
redcoat777 t1_j206xtk wrote
30 years at 5% increases the total interest to 8.4B and drops the payment to $48/mo. Pulling out the $20/mo from their profits gives an extra payment of $28/mo. Though of course with a capital project, trying to figure out how much it “hurts” to make payments has to consider inflation. If we count on 3% inflation (which is conservative) it makes the effective interest rate 2%, and a monthly inflation adjusted payment of $33, which is $13/mo after you pull their $20/mo profit margin out. that seems like a good deal to me honestly. But like you said we dont have a true picture of the cost, loan terms, or their profit.
[deleted] t1_j1z7ikn wrote
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megavikingman t1_j1yqawh wrote
Numbers are suspect, but now calculate everyone's share of profits.
Coffee-FlavoredSweat t1_j1yqwog wrote
$16 per month. Don’t spend it all in one place, you’re still on the hook for the $80/month mortgage payment.
megavikingman t1_j1yshd8 wrote
How I know your numbers are wrong: CMP is still in business, after being purchased.
If they make enough money to spend a million bucks on a ballot measure that may fail, they are profitable enough to buy.
Coffee-FlavoredSweat t1_j1yy0ha wrote
It’s pretty easy math.
$40 million per quarter comes straight from the news article, divided by 3 months, divided by more than 800,000 customers.
Feel free to do your own math and prove me wrong though.
popejohnpaul2nd t1_j1z4pv0 wrote
Not sure what interest rate you are using to come up with $15 billion of interest. At 5% lifetime interest on a 30yr, $9 billion loan would be about $8.6 billion.
Lets talk profit. The $40 million represents just CMP. If we take a look at the 2021 year end financial reports combined net income would be about $263 million. If we want to truly look at cash income, we need to add back depreciation, as well as add back interest, for a new entity wouldn't be responsible for the repayment of CMP's debt. That would leave us with about $487 million compared against $285 million in annualized interest repayments. I want to ignore principal repayments as those are accounted for on the cash flow statement and there is whole lot of additional fuckery going on there (e.g., CMP reported $183 million in net income in 2021 but $330 million of cash provided from operating activities). I am also not able to look at a Versant only cash flow statement.
It would appear a new entity could handle the debt load. I don't think it would result in cheaper rates right away, but certainly in the long run. I would imagine that service levels would also improve as they would be committed to serving their customers instead of padding the rate base to justify rate increases.
bleahdeebleah t1_j1z8bd5 wrote
Where are you getting the idea that each customer would be paying a constant amount each month on the bonds?
Coffee-FlavoredSweat t1_j1z9utg wrote
How else do you suppose they’d structure the payback?
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