Maine PUC orders preliminary investigation into CMP management structure

Concerned that recent improvements in Central Maine Power’s quality of service may not be sustained over time, the Maine Public Utilities Commission on Tuesday ordered a preliminary investigation into the company’s management structure.

The regulator has asked CMP to produce a “performance plan” that describes how the utility will maintain its progress and address concerns raised by a recent audit by an independent consultant on how the evolving management of CMP and of its parent companies has influenced customer service. The plan is expected on November 30.

The PUC has left the door open for further investigation, depending on what happens with the so-called summary investigation.

The PUC’s action follows an audit report released in July by Liberty Consulting Group. The audit aimed to determine how the new management structures and service delivery affected the interests of CMP clients. He identified a number of management challenges for CMP, but said the utility is likely equipped to overcome them.

To a large extent, the three commissioners had to decide whether the deficiencies identified in the audit were largely in the rearview mirror, or were warning signs of potential problems on the road.

CMP is a subsidiary of Connecticut-based Avangrid, which was formed in 2015 following the acquisition of a Connecticut utility. Iberdrola, a global energy company headquartered in Bilbao, Spain, is the majority owner of Avangrid.

Specifically, Liberty investigated whether the subsequent consolidation and the transfer of more decision-making resources and employees to the Avangrid level contributed to a decrease in the quality of customer service at CMP.

Liberty concluded that Avangrid was not “a fundamentally or irreparably flawed operation”. But he discovered several issues with integrating Avangrid’s distribution services – including CMP – into a subsidiary known as Avangrid Networks.

Specifically, Liberty said Avangrid made decisions that favored shareholders over customers. He concluded: “Management’s emphasis on resource reductions and limits as a means of closing the gaps to meet the income expectations of the equity investing community has sacrificed the efficiency of service delivery. “

Liberty said he found an organization changing, first reducing resources, then increasing staff, and guided by senior executives, some from overseas, who came and went quickly. He criticized Avangrid’s board of directors for not having more “independence, commitment, experience and focus on operations” to provide advice more typical of large US utilities.

The audit also noted that CMP’s 640,000 customers in Maine represent approximately 2% of Iberdrola’s global customer base.

These revelations worried PUC President Philip Bartlett.

In a separate case under review by the panel, CMP says it has met or exceeded state-mandated customer service quality standards and wants the PUC to remove an ongoing penalty that resulted in the loss of nearly $ 10 million in utility revenue over the past. 18 months.

This request is under review. But it was clear on Tuesday that Bartlett saw the penalty as an effective tool that had helped Avangrid channel more resources into the CMP.

“I am concerned that once the (return to equity) adjustment is lifted, the direction of the company may slide again without this significant financial incentive to improve,” he said.

Bartlett’s concerns were shared by the other two Commissioners, Randall Davis and Patrick Scully. They also voted to order a summary investigation.

Liberty Consulting Group, a Pennsylvania-based utility consultant, has extensive experience reviewing CMP performance. He conducted a PUC-ordered investigation into the billing system issues in 2018. Poor management of the business was one of the factors behind these issues.

Liberty has found some more recent good news. He said Avangrid had taken steps since 2019 to restore resources to the CMP and focus on efficient service.

“However,” Liberty warned, “it remains cautious to question the sustainability of the positive changes that have taken place.”

Liberty’s reasons for caution included the history of Iberdrola’s operations in the United States, the ongoing high-level management changes and the unknowns that will follow the eventual resolution of companies that have received attention and motivated decisions. at Avangrid, such as the billion-dollar New England Clean Energy Connect, or NECEC, power line.

Avangrid is the owner of NECEC. He’s building a 145-mile high-voltage transmission line across western Maine, but opponents managed to ask a referendum question on the November ballot to kill the project.

In a response following the publication of the audit in July, the CMP argued that the investigation was not necessary. He noted that the audit showed strong performance and significant improvements over the past few years. CMP highlighted this summary statement from Liberty: “Like all organizations, it can improve, cares and has made efforts to improve. “

The CMP highlighted the recent progress it has made and which Liberty has observed. These advancements largely include resolving billing and metering issues, reduced customer complaints and organizational improvements, as well as adding workers to key customer service positions and an increased focus on customer service reliability. ‘food.

The CMP also questioned the accuracy of some of Liberty’s findings and said it would respond to them if an investigation is initiated.

The company noted, for example, that it responded to over 87% of customer calls within 30 seconds, exceeding the PUC target of 80% and providing accurate and timely invoices more than 99% of the time since. March 2020.

This story will be updated.

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