A small section of Central Maine Power’s Larrabee Road Substation No. 418 in Lewiston. Russ Dillingham/Sun Journal Buy this Photo

LEWISTON – A proposal to create a consumer-owned power utility in Maine has some worrying the move could hurt municipalities like Lewiston that rely heavily on the property taxes paid by Central Maine Power.

Though the measure calls for the yet-to-be-created entity to make payments in lieu of taxes, critics wonder if cities, towns and school districts can rely on what has traditionally been a steady stream of property tax revenue.

“The risk to our community is significant,” Lewiston Mayor Mark Cayer said Thursday.

That concern caused him to send a note to the city’s legislative delegation this week laying out his opposition to the bill to create a nonprofit utility called Pine Tree Power Co. that later cleared both houses of the Legislature.

Gov. Janet Mills has “expressed serious concerns” about the measure, but hasn’t said whether she’ll veto it. If she does, backers plan to petition to have a statewide referendum on it next year.

Her chief of staff, Jeremy Kennedy, said in a memorandum Monday that the proposal “risks towns and cities losing significant property tax revenue,” about $90 million statewide if CMP and Versant Power are absorbed by a new entity that doesn’t have to create profits for investors.

Kennedy specifically singled out Lewiston as a potential big loser because CMP has so much land and equipment in the city — 8.3% of the overall total — that it pays more than $5 million of the $62 million raised annually from property taxes in Lewiston.

The bill, though, does say directly that the new company “shall make payments in lieu of taxes with respect to its utility facilities or utility property to any municipality, county or other political subdivision” where it has property. It also requires they “make timely payments in lieu of taxes.”

State Rep. Seth Berry, a Richmond Democrat who pushed the bill, said in response to Kennedy that in the three towns he represents, the power company is their biggest taxpayer so he agrees that ensuring future tax payments is crucial.

Berry said the proposal “requires that all current and future property taxes, as paid for in our rates, are continued,” including those in tax-increment financing agreements.

However, Kennedy said in his memo that as a tax-exempt entity, “it is doubtful that the governing entity could be required to make any such payments.”

Lewiston’s lawmakers mostly opposed the bill, with Sen. Nate Libby and Reps. Margaret Craven, Kristen Cloutier and Jon Connor each voting against it. State Rep. Heidi Brooks, a Lewiston Democrat, backed it.

Cayer, who is in his first term as the city’s part-time mayor, said CMP is Lewiston’s largest taxpayer, adding that the company has also “been responsive in the past to our concerns.”

Cayer said the bill, at least as it is written currently, “doesn’t provide any assurances that the payments in lieu of taxes” eyed as a replacement for the existing property tax payments “will not be the target of future raiding in times of need.”

It also “doesn’t provide any assurances that assessments will be maintained at levels that other taxpayers are assessed,” the mayor told legislators. “Should any change in assessment or payments change this would have a dramatic impact on our community.”

Cayer said he is also worried that replacing CMP with a new public entity might threaten the $1 billion hydropower transmission line under construction between Quebec and Lewiston, a project that includes a new power converter station in the city that would alone add millions of additional dollars annually to Lewiston’s tax revenues.

“I understand the passion around the corridor, but for our community it means significant revenue increase to hopefully provide services and meaningful tax reductions,” Cayer said.

Kennedy said that even if Pine Tree Power makes payments in lieu of taxes, “the tax-exempt status of the property” it owns “could throw out of balance state valuations for revenue sharing and school funding. “

He said municipalities “would theoretically collect payments equal to the property taxes they are assessed on utility assets, but their total state valuation would be reduced since that property is now exempt.”

“Those towns conceivably would be collecting the same revenue but would appear to be ‘poorer’ in relation to surrounding towns for purposes of revenue sharing and education funding, creating serious new inequities across the state,” Kennedy said.

If Mills signs the bill, Maine voters would get the chance to have the final word on whether to establish Pine Tree Power or not. If they back it, the changeover would take several years.

If the governor vetoes the measure, proponents said Thursday that they’ll push for a citizen-initiated referendum.

Stephanie Clifford, the campaign manager for Our Power, a group created to push the measure, said in a prepared statement that backers of the idea hope Mills “will do the right thing and send the bill to Maine voters so that we have the opportunity to vote this November to put our energy future back in our hands.”

If not, Clifford said, signatures will be collected in a bid to put the question on the ballot in November 2022.

“The governor’s choice is not whether or not Maine voters will have a say on this,” Clifford said, “it is when they will have a say.”