letter to the editor

There are no free lunches

Mon, 10/30/2023 - 3:00pm

Dear Editor:

I believe some clarification is needed to the comments provided by Pine Tree Power advocate Jill Linzee. 

The value of $3.5 billion “book value,” often quoted by the advocates, does not equate to “current value” as she indicated. Book value is often an accounting term representing the cost of something at a given point in time (years past) minus the accounting depreciation of that something. Specifically, it does not represent the “current value” or the market value of the assets.

The market value (or stock value) is close to $13.5 billion, or perhaps somewhat higher. It is highly likely that Maine residents would be on the hook for around $13 billion, unless we plan to somehow justify an eminent domain case, which would take at least a decade to litigate, and we are unlikely to be successful. In addition, the likely annual interest on $13 billion is about as much as we pay annually for our electric rates today; how would you like a doubling of your electric rates to pay the interest? 

Secondly, I often hear comments about a foreign company owning these assets. Many US-based firms have foreign assets; do we want those assets taken by foreign nations because they don’t like the past service the company provided? Similarly, many of us hold mutual funds that contain companies that are based outside the US; do we want those assets taken by the residents of those countries at some bargain price? 

I guess in some ways this is all academic since there is no way we are going to pay market price and there is no way that an eminent domain case will be found legal in the long run. All of this is going to cost us in litigation on both ends, which in the end will be passed on to rate payers or taxpayers; there are no free lunches. There are reasons why our governor does not support this. I am not affiliated with any advocacy group or company.

Peter A North