Maine Office of Policy and Management    
State House Station #181 
Augusta, Maine 04333 

                                                     

 

 
    Director 

Richard Rosen 
 

 
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Draft Advisory White Paper  
 

TO:   
FROM:  
DATE:   
SUBJECT: 

Patrick Woodcock 
Chase Martin 
8/05/2013 
Maine PowerOptions + Energy Aggregation Services Offered by MHHEFA and 
MMBB 

 
Overview 
The Office of Policy and Management conducted a review of the energy aggregation services 
being offered by the Maine Health and Higher Educational Facilities Authority (MHHEFA) and 
the Maine Municipal Bond Bank (MMBB). These services are offered through the Maine 
PowerOptions (MPO) program. 
 
The purpose of this review includes the following: 
 
1.  To ascertain whether the services and bulk purchasing being offered to municipalities, 
hospitals, non-profits, and educational facilities are benefiting these organizations and 
entities;  
 
2. To determine the appropriateness of the state continuing to provide these services 
based on current market conditions or availability of these services in non-governmental 
entities including the private sector or other not for profit associations. 
 
The statutory authority that enables MHHEFA and the MMBB to offer energy aggregation 
services are located in Title 22 M.R.S.A. §2055 ((16) and Title 30-A M.R.S.A. §5954-A 
respectively (see Appendix 1). 
 
Facts 
OPM established contact with the Executive Director of Maine PowerOptions, Michael Goodwin 
in early May. On May 10th, OPM received an email from Jonathan Youde, the Program Officer 
                                                             
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 This Draft Advisory White Paper from the Office of Policy and Management is not a “public record,” 13 M.R.S. 
402(3)(J), and is not required to be released under Maine’s Freedom of Access Act. 

   
 

for MPO. In Mr. Youde’s e-mail, he explained who he was and offered to assist OPM for more 
information. He also attached a program overview for MPO (see Appendix 2). 
 
The program overview document stated the enabling statutory authority for MPO and 
established that there were 809 members of the organization. This membership is comprised of 
governmental units and 501(c)3 non-profits. Mr. Youde described the strengths of MPO as 
having “the purchasing power of its combined membership, voluntary participation, market 
education, and unbiased perspective.” 
 
Currently, MPO offers two major programs, Electricity Supply and Fuel Oils. The Fuel Oils 
program has a measured cost (the average price for members was $2.94 a gallon of oil). 
 
Electric Supply 
The Electricity Supply aspect of MPO is a “more complex market.” According to Mr. Youde, 
there is a competitive bid process conducted every three years to select a provider who will 
offer the best choice of options for the term. This competitive process is open only to licensed 
energy suppliers in Maine and excludes all other brokers and aggregators because “this would 
add an additional cost for members.” These bids are solicited from suppliers through a 
“Request for Proposals” document. Proposals are then subjected to a review by MPO’s advisory 
board (see Appendix 3) in person, typically through a PowerPoint presentation. The winning 
proposal determined by the advisory board and MPO staff is then invited to participate in 
negotiations to produce a program agreement to outline the Supplier and Operator agreement 
(see Appendix 4). 
 
Review 
Initially, our requests for the current and previous contracts for MPO were met with claims of 
confidentiality. After OPM consulted with the Attorney General’s office and pointed to the 
statutory authority granting OPM access to confidential and privileged documents, MPO turned 
over the 2008 exclusive program agreement along with a list of the entities that comprise the 
Internal Advisory Committee. The 2008 exclusive program agreement received by OPM was 
between MMBB, MHHEFA, and Constellation NewEnergy. 
 
The current exclusive program agreement, executed in May of 2011, is also between MMBB, 
MHHEFA, and Constellation NewEnergy, Incorporated (CNI). CNI is a subsidiary of the 
Constellation Corporation, a subsidiary of the Exelon Corporation. Exelon, based out of Chicago, 
Illinois, is the largest competitive U.S. power generator. OPM was permitted to view this 
document in person during a meeting held on June 24th, 2013. 
 
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Under the agreement between MHHEFA and the MMBB with CNI, MPO staff are directed to 
operate the program in a manner that best represents the interests of the participating 
members. During the meeting held on June 24th, one of the major topics discussed were the 
savings that members realized by participating in the program.  
 
MPO is tasked by CNI to market the participating members aggressively and agrees to divulge 
information about the participating members to CNI and any of CNI’s affiliates, salespersons, 
brokers, and 3rd parties. CNI is permitted to use MHHEFA and MMBB’s logos in advertising 
materials. OPM staff requested a sample of these advertising materials but was told by MPO 
staff that the information was out of date and none could be produced. 
 
MPO staff indicated that there were three primary savings for their members. First, there was 
no fee for management of the aggregation service. Second, there is a benefit to the small 
electricity users because they are a member of a group containing large electricity users. 
According to Mr. Youde, in the electricity market, electricity suppliers don’t make any money 
off the smaller users. Third, staff at MPO watches the market and tries to lock in rates that they 
believe will benefit the members for the term of their contracts (12, 24, 36, 48 months). 
 
Benefit to Small Users 
In the email received by OPM from MPO on June 18th, 2013, Mr. Youde said, “We keep no 
statistics on savings, since the majority of our pricing offers are fixed price, and vary in term 
length, there is no publicly available benchmark to measure these savings against.” 
 
Mr. Goodwin described at length the manner in which the smaller use members benefit from 
being associated with the larger use members. When asked if there is a fixed price for the 
entire membership base of MPO, Mr. Youde replied in the negative. Each member is locked into 
a contract based on usage specific to their profile. 
 
Private Sector 
OPM staff reached out to Patrick Woodcock, Director of the Governor’s Energy Office, in order 
to identify private sector energy aggregators that could clarify fees for service and provide the 
private sector point of view. Director Woodcock suggested that OPM staff meet with 
Competitive Energy Systems (CES). Jon Sorenson, President & Chief Operating Officer agreed to 
meet with OPM on July 8th.  
 
Mr. Sorenson went over the process of submitting a bid to prospective clients. “The whole 
process is transparent,” said Mr. Sorenson. He went on to list four different ways in which 

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savings could be measured: using a client’s budget, the current market prices, standard offer, or 
looking at the current contract a prospective client is locked into. 
There is no confidentiality or secrecy for bids submitted. In one sample bid (See Appendix 5) it 
shows over 36 bids submitted for the aggregation for the State of Maine’s electricity. This is all 
public information that is made readily available. 
 
OPM staff also reached out to Unified Energy Systems, which has proposed an energy 
aggregation program for K-12 schools, the Maine School Energy Cooperative (See Appendix 6). 
The MESEC program aggregates customers together and locks them all in at the same price and 
is completely transparent. 
 
Market Pricing 
MPO maintains that they aggressively watch the market and look for opportunities for their 
members to lock in low rates. Because of the fluctuating market, this can sometimes be, in Mr. 
Goodwin’s words, “somewhat of a crapshoot.” 
 
One of the problems, according to Jon Youde, is that in some years, members actually pay more 
than the standard offer because they are locked into a multi-year fixed price contract. 
 
Conclusions 
The ability of MPO to demonstrate savings is non-existent. The initial response and continued 
discussions with the staff at Maine PowerOptions were devoid of any metrics or statistics that 
would help to gauge the effectiveness of the program.  
 
The original legislation that proposed the creation of MPO indicated that the purpose of 
permitting MMBB and MHHEFA to engage in bulk purchasing of energy was to ensure cost 
savings for participating members. Although claims of savings are being made by the program, 
there is no evidence that this is occurring or has ever occurred. 
 
Oversight of the program is weak. The program follows the Maine Public Utilities Commission 
rules for aggregation but lacks any kind of direct oversight. The rules and procedures that MPO 
follows are self-determined and lack any kind of transparency. For example, the membership of 
the Internal Advisory Board, which makes the determination of whom to award the supplier 
contract to, is kept confidential.  
 
The Constellation Energy Contract is a concern.   It must also be noted that the supplier of 
almost all of the participating members has been one organization since the program’s 
inception. While initially held by AES Energy, as stated above, AES Energy was purchased by 
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Constellation Energy and has continued to operate the program exclusively for over a decade.  
In addition, AES pays over $19,000 per month to MMBB and MHHEFA. 
 
There are numerous alternatives available for MPO customers.  Conversations with the 
private sector indicate that the marketplace is ready, capable, and willing to serve the needs of 
MPO’s current customers through a transparent and competitive bid process. Other companies 
that provide similar services include Summit Energy, La Capra, EnerNoc, Ameresco, SourceOne, 
Allied Energy, Mondre, and Freedom Energy. Some of the smaller companies include Electricity 
Maine, CN Brown, Dead River, Patriot Energy, and Glacial Energy. 
 
Note:  Although Maine PowerOptions is a program operated by quasi-state organizations, it is 
held out to the general community and members themselves as a state actor. There are 
certainly State interests involved in this organization due to the participation by municipalities, 
the University of Maine, and other important public organizations. 
 
Outcomes 
The Office of Policy and Management has identified three possible decisions for the Governor’s 
Office to make: 
 
TERMINATION.   
• The program can be terminated from MHHEFA and MMBB by both organizations’ 
boards. The board members of MHHEFA are appointed by the Governor. Through this 
avenue, the decision can be made to shut the organization down. 
 
• Legislation can be introduced that would strip the language from §2055 and §5954-A 
that permit the MMBB and MHHEFA to purchase bulk energy for participating members. 
 
REDESIGN OF THE PROGRAM. 
• Permit the organization to continue to operate and institute policies that create 
transparency in the program’s operations. 
 
 
 

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