Maine enacts energy bill to promote natural gas, energy efficiency

The Maine Legislature has enacted an omnibus energy bill designed to save consumers over $200 million per year.   For reasons ranging from a reliance on oil for home heating to inadequate natural gas pipeline capacity into New England, Maine’s energy costs are well above the national average. In response, a bipartisan group of legislators pulled together a package of measures to cut energy costs.

The Maine State House, Augusta, Maine.

The resulting bill, LD 1559, "An Act To Reduce Energy Costs, Increase Energy Efficiency, Promote Electric System Reliability and Protect the Environment", brings together elements of over ten other bills that came before the Joint Standing Committee on Energy, Utility, and Technology this year.  Last week, the Legislature enacted the bill by wide margins in both chambers: it received a vote of 131-7 in the House, and 29-6 in the Senate.

Highlights of the bill as enacted include:

Requires the Public Utilities Commission to help cut electricity costs:

• For the first time ever, requires the Public Utilities Commission to work to minimize the cost of energy to Maine’s consumers and to set rates to achieve economic efficiency

Expands heating options:

• Extends utility pilot programs to offer efficient electric heat pumps

Improves energy efficiency:

• Gives the Public Utilities Commission and Efficiency Maine Trust a revised policy directive to reduce energy costs and improve security of the state and local economies by pursuing all cost-effective energy efficiency for homes and businesses, including conservation in both electricity and heating fuel consumption
• Directs Regional Greenhouse Gas Initiative proceeds to lower commercial and industrial energy costs, reduce residential heating energy demand in a fuel-neutral way, and provide rate relief
• Caps electric efficiency spending at no more than 4% of total retail electricity and transmission and distribution sales in Maine
• Gives the Public Utilities Commission improved tools for overseeing efficiency programs
• Uses Maine Yankee litigation settlement funds for energy efficiency investment and rate relief
• Approves the Trust’s contract with Maine utilities for energy efficiency

Lowers electricity and natural gas costs:

• Authorizes the Public Utilities Commission to execute or direct utilities to execute energy cost-reduction contracts if necessary and appropriate to reduce the “basis differential” cost of natural gas in New England and thus to reduce the cost of electricity in Maine
• Protects ratepayers from cost increases resulting from the energy cost-reduction contracts
• Creates the Energy Cost Reduction Trust Fund to hold energy cost-reduction contract revenues, to be held in trust for the purposes of reducing the energy costs of Maine consumers

Improves controls over the cost of electricity transmission:

• Establishes a least cost electric transmission policy that gives the Public Utilities Commission improved tools to evaluate whether non-transmission alternatives can   address identified needs at lower cost

Improves the Regional Greenhouse Gas Initiative:

• Aligns Maine’s carbon emissions budget with other RGGI states’ budgets
• Adopts the new RGGI reforestation offset to benefit both large and small Maine forest owners.
• Directs the Department of Environmental Protection and Public Utilities Commission to develop incentives for consumers to reduce greenhouse gas emissions by switching from oil and coal to alternative fuels such as natural gas, biomass, or other renewables

Brings competition into municipal streetlighting:

• Requires transmission and distribution utilities to give municipalities options to participate in the ownership and management of their own streetlighting systems

Expands ocean energy options:

• Gives consideration to the University of Maine’s deepwater floating offshore wind pilot project and potential ocean energy projects, in addition to Statoil’s proposal

With the bill enacted as an emergency measure, absent a procedural roadblock it will become law later this month.