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Unplugging a way of life: Maine island eyes trading local control for cheaper electricity

Posted Sept. 30, 2016, at 6:40 a.m.

SWAN’S ISLAND, Maine — Donna Wiegle knows what she’d do with an extra $1,000 per year.

That’s what Wiegle estimates she’ll save on her annual power bill if Emera Maine takes over the electric cooperative on her home of Swan’s Island. The deal promises to cut residential electricity bills on Swan’s Island and neighboring Frenchboro Island in half.

That’s no small thing on the islands, where maintaining the costly electric grid means customers get a guaranteed bill of at least $50 per month before they even turn on a single light.

But the deal would close the cooperative, one of the country’s smallest member-owned utilities, that’s been locally controlled for 67 years.

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“I would probably take that extra money and go for a nice motorcycle trip next summer, but that’s just me,” said Wiegle, standing next to a freshly polished Harley-Davidson.

Wiegle, the island’s health officer, is again battling cancer.

“My priorities have changed a lot since the summer,” she said.

Wiegle’s a leading advocate for selling and disbanding the Swan’s Island Electric Cooperative, in a deal that promises to be an economic boon for the island, located 6 miles off the much larger Mount Desert Island. Under the sale, the cooperative’s roughly 400 members would be lumped in with Emera Maine’s 154,000 customers elsewhere.

“It was too good of a deal to ignore, I think,” Wiegle said.

This summer, the cooperative’s voting members made clear that preference, too, with about 90 percent in favor of the sale.

That’s despite the negatives of the deal, such as the loss of precious jobs not directly tied to fishing, the primary source of income for year-round residents. The U.S. Census Bureau estimated in 2014 that about half of the jobs on each island were in the category that includes fishing.

There also is the possibility that local outages might take longer to fix.

“That was really what people had to weigh: the cost versus the loss of control and loss of that on-island employment,” said Ed Schwabe, the president of the Swan’s Island Electric Cooperative’s board of directors.

The utility has four full-time employees and another eight part-time positions that delivered about $155,000 in wages last year and supported on-island staff to respond to outages. All of the positions would be lost under the deal, including one for a meter reader, which would go away with Emera’s installation of smart meters that can be read remotely.

The proposed sale is now before the Maine Public Utilities Commission. It marks the end of a long period of consideration for the island that, like other remote island communities, has had to make tough choices and investments to preserve connections to reliable electricity.

A way of life

Bonnie Turner, a Swan’s Island resident who has worked for the cooperative for 36 years, isn’t convinced the deal would be a good thing.

“The members are losing a way of life here,” Turner said.

From its founding in 1949 until 1973, the cooperative produced the island’s power with diesel generators. Today, it buys its power through Emera, which transmits the electricity from MDI to Swan’s Island through underwater cables that connect to the island’s grid. Swan’s Island residents foot the bill for all of the transmission costs once that power leaves the mainland, leading to their high electric bills.

Not factoring in the price of the actual electric supply, the average customer on Swan’s Island pays about $108.56 per month just for having that electricity delivered. On Frenchboro Island, the rate is about $127.85. That’s more than double the monthly delivery charges of $53.85 for a customer in the Bangor area, according to Emera.

The deal would reduce transmission costs on the island because it would group the cooperative’s 421 customers in with Emera’s larger customer base, who all contribute evenly to the utility’s costs for maintaining its power grid, depending on their rate classes.

The relatively small size of the Swan’s Island cooperative is a major reason why costs to maintain the island’s grid are so steep.

“They’re spreading costs over a very small number of customers, and Emera will spread them over a very large group of customers,” said Tim Schneider, Maine’s public advocate, whose office supports the sale. “It’s a small amount for other customers but a massive savings for Swan’s.”

Swan’s Island and Frenchboro Island residents would enjoy mainland rates. But some are worried they’ll receive mainland service.

Turner’s concerned that utility service will deteriorate without staff on the island and about losing direct relationships customers have with their electricity provider.

“It’s not going to be the one-on-one like it is here. I mean, you know everybody and it’s friendly,” Turner said. “Emera’s people may be friendly, but you’re not going to be a name anymore, you’re just going to be a number on an account.”

Emera previously took over service to the Cranberry Isles and serves many of the most sparsely populated areas of the state, experience the company said will benefit Swan’s and Frenchboro islands.

“For any needed repairs on Swan’s Island and Frenchboro, crews will be dispatched from our Lamoine location and will take the ferry from Bass Harbor to reach the islands,” Allison Gray, Emera Maine’s spokeswoman, wrote in an email. “Dispatching crews by ferry mirrors our current operations with other island communities we serve.”

Residents on both sides of the decision to sell said they’re left to wait and see what power outage response would look like under the new ownership. Though the head of the cooperative said about half of the outages to the island are caused on the mainland.

Regulators have put questions to Emera and the cooperative, seeking more information before the decision goes before commissioners. They’ll decide whether the proposed agreement is in the best interest of ratepayers, both on the island and on the mainland.

The deal would have Emera Maine pay up to $2.5 million to settle all of the cooperative’s debt. It would leave the cooperative its real estate and other property to sell in order to support the costs of winding down operations.

The president of the Swan’s Island Electric Cooperative’s board of directors said he compares the process now to the final stretch of a hurdle race.

“It doesn’t make any difference how well you did on hurdles five and six — if you clip number seven and fall flat on your face, then you’re done,” Schwabe said. “And so that’s kind of where we are.”

A long search for lower costs

Schwabe, a retired Army colonel and military science professor at Virginia Tech, started to consider the price of island power as a seasonal resident on Swan’s Island, in the late 1980s.

He thought if he could get a feel for what it takes to run the local utility and for the constraints it faces, he might find a way the island could lower its costs.

“And the answer to that was ‘no,’” Schwabe said, standing outside of the aged building where the cooperative once housed its fleet of diesel generators. “I learned that a cooperative has to be reliable, it’s gotta be safe and it’s gotta be affordable, and those three things compete with each other, all the time.”

Those competing goals were clear in 2013, when the utility had to ask regulators for a 23-percent increase in the rates for maintaining the local grid, to cover deferred maintenance, upgrades and an updated schedule for clearing rights-of-way for the utility’s lines.

With those costs mounting, the cooperative turned away from considering other, more ambitious projects, such as installing its own renewable electricity generation.

“Wind power has potential because we have such good wind out here, but we’re so small, and you still have to manage that project,” Schwabe said. “The whole question of sustainability was staring us in the face the whole time, and we thought that wind power was a bridge too far for us.”

From the Burnt Coat Harbor Light Station on Swan’s Island, one can see the three wind turbines on Vinalhaven, which supply power to the Fox Islands Electric Cooperative, about 16 nautical miles due west. That cooperative serving Vinalhaven and North Haven is more than 4.5 times larger than Swan’s Island’s, by membership.

The size of the Swan’s Island cooperative has limited its renewable power options in other ways, too. Residential solar generators in Emera’s territory can get bill credits for times when they produce more power than they consume, a system called net metering.

If the proposed sale goes through, island customers would have access to net metering.

Absent such options now, residents try to keep their power bills in check by being conservative with their electricity use. The amount of electricity the cooperative sold in 2015 would have powered about 4,000 conventional light bulbs continuously for a year. That’s about eight bulbs for each year-round and seasonal home on Swan’s and Frenchboro islands.

A 6-mile barrier

On Swan’s Island and other islands, high energy costs have been a fact of life. Many places are considering how to change that, but the situation on each island is unique.

“About the only thing the islands in Maine have in common is that they’re islands,” Schwabe said.

Some, such as Swan’s Island, have connections to the mainland. Others generate all of their own electricity through a local utility and have no connection, such as Harbor Island, which guards Burnt Coat Harbor and sits in view of the Swan’s Island cooperative.

The challenges of island life are many, but lowering energy costs chips away at one barrier, according to Brooks Winner, a community energy associate with the Island Institute.

“I think that we definitely see lowering energy costs as a way to boost the local economy on the islands and make it easier for folks to justify staying there or moving there,” Winner said. “It’s hard to say what will happen for Swan’s and Frenchboro, but I think that lowering energy costs is a good thing, and it can only help the year-round communities in both places.”

Life on the island comes with generally higher costs of goods. Brian Krafjack, owner of The Island Market and Supply, knows that well.

“We essentially pay for the freight twice,” Krafjack said.

Paying mainland power rates would cut his bill by about 30 percent, a reduction he said would benefit his business and possibly others.

“It will obviously make our life a little easier, especially in the winter months when cash is tight,” Krafjack said.

His store uses about twice as much electricity as the average island home. While he’s looking forward to potential savings, he said it’s unfortunate that jobs at the cooperative are going away.

Dan Mattsen, who’s lived on the island since the mid-1990s and spent stints lobster fishing, said those jobs not directly tied to the fishing industry are “precious.”

But he said he supported the sale and doesn’t think it will drastically change the nature of life on the island. Distance to the mainland remains the biggest difficulty of island life, he said, standing inside of the state-run ferry, the Capt. Henry Lee.

“This is the biggest bummer,” Mattsen said, gesturing to the ferry. “We’re on it.”


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