AUGUSTA — The city’s claims that two utility companies improperly used funds and clout to punish the city and gain an unfair edge is unfounded and an attempt to take away the firms’ right to free speech, attorneys for the utilities say.

Central Maine Power and Maine Natural Gas attorneys filed documents with the Maine Public Utilities Commission last week to respond to accusations made by the city.

The accusations are the latest harsh words between the city and the two utilities, both owned by Iberdrola USA, in a battle born in the process used by the city to select a Maine Natural Gas competitor to provide fuel to city and school facilities.

A 10-person complaint filed by the city’s law firm with the state regulators alleges CMP and Maine Natural Gas were improperly co-mingling ratepayer resources to punish the city for its selection of competitor Summit Natural Gas of Maine and to seek to gain an unfair competitive advantage over Summit. The complaint also alleged legislation backed by CMP that would have changed where utilities pay excise taxes on their vehicles, a change that could have cost the city $200,000 a year in lost tax payments from CMP, was nothing more than an attempt to punish the city.

The complaint asks the commission to fine CMP, order Iberdrola to divest itself of either CMP or Maine Natural Gas and investigate the firms’ actions.

“Petitioners are entitled to develop the facts surrounding CMP’s confrontations with officials of the city of Augusta and the sponsorship of legislation designed to punish the city of Augusta and warn others that, if they do not favor CMP, CMP will use retaliatory ‘free speech’ to punish them,” the city complaint, filed by attorney Anthony Buxton, states.

Buxton asserts that CMP’s support of the legislation “is in fact a ‘sham’ designed to use the legislative process to deter other customers from disfavoring CMP in ‘competitive’ circumstances.”

Company attorneys, in their latest response filed late Friday, say the companies have a First Amendment right to petition the Legislature as they did with their request for an excise tax law change. They say they have followed the rules and terms of PUC-approved contracts to properly account for the time of company executives, including CMP President Sara Burns, and others who provide services to both utilities.

They believe city officials have a vendetta against the firms, and the city’s claims aren’t worthy of investigation.

“It would be unproductive, inappropriate and, as to many of the allegations, unconstitutional to launch an investigation into ‘he said, she said’ details as to what was said on day X or day Y, or what motivated either the city, CMP or (Maine Natural Gas) or anyone else in particular action on any specific day in the past,” according to the filing.

Meanwhile, the bill proposed to change where utilities pay excise taxes, which was changed at the recommendation of the Taxation Committee to study the issue and report back to the next Legislature, is dead, according to City Councilor Patrick Paradis, a former state legislator, and current state Sen. Roger Katz, R-Augusta.

The bill to study the issue was initially passed by both the House and Senate.

However, last week the Legislative Council determined the state did not have enough money to fund all the study requests made this session and decided against funding the excise tax study.

“There’s only so much money available to do studies, and the Legislative leadership didn’t feel this was a very big priority,” said Katz, a member of the legislative council. “I’m certainly pleased with the result. It would have been a huge hit for the city of Augusta of $200,000.”

Harry Lanphear, spokesman for the PUC, said staff will review the filings from both sides and probably make a preliminary recommendation on whether to initiate formal proceedings in early May. He said sometimes staff request further comment from the parties, which could delay the commission decision.

Maine Public Advocate Timothy Schneider, in a filing in the case, said CMP executives’ actions, including Burns’ accompanying Maine Natural Gas officials on sales visits to potential customers, “appear to have been provided pursuant to Commission-approved service agreements between Iberdrola USA network affiliates and her time properly accounted for,” but said they may have been improper attempts to leverage CMP’s reputation and good will to convince customers to take gas service from Maine Natural Gas. He wrote CMP’s good will and reputation is an asset for which CMP ratepayers deserve compensation and recommends whether that was done properly be investigated by the PUC.

Keith Edwards — 621-5647 kedwards@centralmaine.com Twitter: @kedwardskj