Maine bond hold affects offshore wind R&D, energy efficiency

Wednesday, June 13, 2012

Maine Governor Paul LePage has placed a hold on $40 million in bonding, including a bond approved by Maine voters in 2010 to develop an off-shore wind energy demonstration site and related manufacturing and make energy improvements at state university and college campuses.

Damariscove Island, a designated offshore wind energy site off Boothbay Harbor, Maine.

On June 8, 2010, Maine voters passed a measure approving a $26,500,000 bond issue "that will create jobs through investment in an off-shore wind energy demonstration site and related manufacturing to advance Maine’s energy independence from imported foreign oil".  The measure was designed to "leverage $24,500,000 in federal and other funds and for energy improvements at campuses of the University of Maine System, Maine Community College System and Maine Maritime Academy in order to make facilities more efficient and less costly to operate".

Funding under this bond measure was split between energy efficiency and infrastructure upgrades at state higher education facilities and offshore wind research and development.  $9.5 million was designated for energy and infrastructure upgrades at all campuses of University of Maine System, $5 million for similar upgrades throughout the Maine Community College System, and $1 million for upgrades for the Maine Maritime Academy.

The remaining $11 million was designated for the University of Maine System's Maine Marine Wind Energy Fund, which provides funds for research, development and product innovation associated with developing one or more ocean wind energy demonstration sites.

Under Maine law, voters can authorize the government to issue bonds, but exactly when the money is borrowed can be determined by the governor and state treasurer.  Governor LePage has previously expressed his opposition to the state borrowing more money through bonding.  Today, the Kennebec Journal reports that Governor LePage has placed $40 million in bonding on hold, including the campus energy upgrades and the Maine Marine Wind Energy Fund.  The governor reportedly told project sponsors that while "[e]ach project that these bonds provide for may be worthwhile", the earliest he believes it would be prudent to issue new bonds is January 2014.

What does this mean for ocean energy R&D and school campus energy upgrades?  According to the KJ, the issuance of these bonds would have given the Maine Marine Wind Energy Fund $7.3 million, and college campuses $3.6 million. While the affected projects may still move forward, particularly if the projects can continue to move forward without relying on further bonding or state debt, the timing of their funding has been placed into question.

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