If you follow energy news, you have likely heard Tom Steyer’s proposal to lower electricity costs. The billionaire investor and Democratic candidate for California governor has built his campaign around a bold promise: cutting California household electricity rates by 25 percent by taking on investor-owned utility monopolies. Some may wonder whether Maine should follow the same playbook. We should be careful before assuming the two states face the same problem. But importing California’s approach wholesale would misunderstand how Maine’s system actually works.
Steyer’s message resonates, and the underlying concern is familiar to Mainers. California has the second-highest electricity bills in the continental U.S., and Maine is not far behind, with rates continuing to rise. The Standard Offer supply recently increased by about 20 percent for 2026. CMP requested the Public Utilities Commission approve an increase of approximately $35 per month over five years, though the PUC ultimately dismissed the proposal. Many residents are frustrated by rising bills.
This raises an important question: would Steyer’s plan be effective in Maine?
Some aspects of the plan could work in Maine, some are already in place, and others are designed for a state with different circumstances.
Summary of Steyer’s Proposal
Strip away the campaign language, and Steyer’s plan rests on a handful of moves. He’d cut utility ROEs by about two percentage points, from around 10 percent to 8. He’d shift California from a system that pays utilities for spending money to one that pays them for results. He’d push utilities to get more out of the grid we already have, using technologies like dynamic line ratings and advanced reconductoring rather than building expensive new lines. He’d use public bonds rather than utility equity to finance some transmission projects, thereby lowering the cost of capital. He’d require utilities to actually meet their interconnection deadlines for new clean energy projects. He’d make data centers pay their own way instead of pushing costs onto households. And he’d expand “community choice” by letting customers buy power from somewhere other than the local utility.
Most of Steyer’s diagnosis is correct. Monopoly utilities have perverse incentives to overspend on capital projects, regulators haven’t pushed back hard enough, and a handful of his tools — performance-based regulation, getting more out of existing wires, making large new loads pay their own way — translate cleanly to Maine. The 25 percent headline does not survive contact with the math. Most electric bills are driven by energy, transmission, and infrastructure costs, not utility profit alone. That is even more true in Maine than California, for three reasons.
Maine already deregulated supply. In 1997, the state required CMP and Versant to sell off their generating plants. Our utilities are wires-only; generation is bought through a competitive ISO New England market. California’s three big utilities still own and contract for generation directly. Steyer’s central structural reform of separating monopoly wires companies from competitive generation is something Maine already did in 1997. The promised savings from restructuring never fully materialized, and Maine consumers remain heavily exposed to wholesale-market volatility.
The ROE math runs the wrong way here. Steyer’s California utilities are currently earning more than 10 percent on equity, and his plan would push that to roughly 8 — a real two-point cut. Maine’s utilities have an authorized ROE just above 9 percent but are earning under 6. They’re already running more than three points below their cap. A statutory ceiling on a number Maine utilities aren’t reaching delivers no immediate savings, and capital markets read aggressive ROE caps as regulatory risk that gets priced into the cost of debt — costs that flow back into the rate base and outlast whatever political point the cap was meant to make. Even setting that aside, distribution profit is under 4 percent of a typical Maine bill. An effective cut saves a household a couple of dollars a month, not a couple hundred a year.
The biggest Maine cost drivers sit outside state utility regulation entirely. Standard Offer supply is shaped by natural gas prices and the wholesale market. Transmission costs are regulated at FERC and allocated regionally. Storm cost recovery now adds about $20 a month to the average bill. Public policy charges, including net energy billing, exist because the Legislature put them there. None of these are utility-monopoly-profit problems, and none are addressed by Steyer’s plan.
So if the California playbook doesn’t fit, what does?
Maine’s playbook
An honest affordability program for this state has five priorities, ordered roughly by where the dollars are. Much of the real value in these reforms is not immediate rate reduction. It is avoiding locking another generation of unnecessary infrastructure and financing costs into the system.
Reform Standard Offer procurement. This is the single largest near-term lever. Our default supply contracts are short-tenor and tightly indexed to natural gas, which guarantees that every cold winter or pipeline disruption flows straight onto household bills. Longer contract structures, more diverse fuel exposure, and disciplined hedging would do more to stabilize residential rates than any change to CMP’s authorized return. None of this requires breaking up a monopoly. It requires the PUC, the Public Advocate, and the Legislature to take procurement design as seriously as we take rate cases.
Make grid planning binding, and pair it with performance-based regulation that has teeth. Maine’s Integrated Grid Planning process is supposed to identify what the system actually needs before utilities build it. Today it is largely advisory — a plan can recommend non-wires alternatives, grid-enhancing technologies, or operational fixes, and the utility can come into a rate case asking for the capital project anyway. The fix is structural: require IGP recommendations to govern what gets approved in rate cases, tie utility earnings to delivery against the plan, and put hard deadlines and financial penalties on interconnection. This is where the Steyer planks that actually translate — outcomes-based regulation, getting more out of existing assets, blocking unnecessary capital projects — live for Maine. The PUC’s open PBR inquiry is the right venue to put real mechanisms in place.
Make growth pay for itself. Data centers and other large new loads should fund their own delivery costs, post curtailment commitments, and contribute to a reserve fund that protects existing ratepayers if the load doesn’t materialize as promised. A 25-megawatt threshold, clear cost-causation rules, and a reserve mechanism aren’t anti-growth. They’re the difference between growth that lowers everyone’s bill by spreading fixed costs and growth that raises everyone’s bill by socializing risk.
Engage seriously at the regional level. Roughly a quarter of a Maine bill is transmission, and most of those costs are decided at FERC and at ISO New England, not in Augusta. State regulators and legislators rarely show up at those forums in proportion to how much money is at stake. Investing real capacity at NESCOE, in FERC interventions, and in regional transmission planning reform is unglamorous and slow, but it is where some of the largest dollar changes for Maine ratepayers will be won or lost over the next decade. Where it fits, public bond financing for specific transmission projects can lower the cost of capital meaningfully — provided it is bounded carefully so it isn’t confused with a return to the public-power ballot fight Maine voters resolved in 2023.
Stop putting every storm into rate base for the next forty years. Resilience investments are necessary, but the way Maine pays for them is part of the affordability problem. Today, costs above CMP’s $10 million annual storm reserve are deferred and amortized through rate cases — with carrying costs accruing in the meantime — while proactive hardening is capitalized into the rate base, where customers compensate the utility on the asset across its multi-decade life. Every major storm becomes another permanent layer of capital that ratepayers pay a return on, on top of the cost of fixing the damage itself. Given how often Maine now gets hit, that treadmill compounds quickly.
Other jurisdictions have built mechanisms to break the cycle, and Maine should learn from them. Florida’s Storm Protection Plan Cost Recovery Clause, created by statute in 2019, requires utilities to file ten-year hardening plans that are recovered through a separate rate clause — outside base rates, with annual prudence review and true-ups. It isn’t a pure operating-expense model, since the clause still includes a return on capital. But it forces hardening into a public, plan-driven process and prevents utilities from quietly capitalizing whatever they want into base rates under the storm-response label. FPL recovered roughly $787 million through this clause in 2025, all under an approved plan that contained no base-rate hardening projects.
More than half of U.S. states now allow utilities to securitize large storm costs through low-interest recovery bonds. The advantage is straightforward: ratepayers repay the actual storm cost without also paying decades of utility equity returns layered on top of it. Maine still relies largely on deferral and amortization through traditional rate mechanisms.
The combination Maine should pursue is straightforward: enact securitization authority for large one-time storm costs, establish a separate plan-driven cost recovery clause for proactive hardening, strengthen and right-size the storm reserve, and pair both with serious pursuit of federal storm-recovery dollars. None of this eliminates storm costs — those are coming regardless. It changes how many decades ratepayers spend paying them back. California worries about wildfire. We worry about ice storms. The lesson is the same: how you pay for resilience matters as much as whether you do it.
Closing
That’s not a 25 percent rate cut. It’s a program that, taken together, can hold bills steady against the cost pressures coming at Maine over the next decade and modestly bend them down over time. It’s also the program Maine has already started building, in pieces, through the PUC’s PBR inquiry, the IGP docket, the data center conversation, and the post-LD 1959 accountability work. The job in front of us is to finish it.
A 25 percent rate cut makes a great slogan. Real affordability work is slower, more technical, and far less portable across states. But it is also more likely to succeed.