Maine considers distributed generation interconnection reforms

The Maine legislature has enacted a law designed to reform the state's procedures for interconnecting solar projects and other forms of distributed generation resources to the electric grid. The law, An Act to Provide Maine Ratepayers with Equitable Access to Interconnection of Distributed Generation Resources, requires the Public Utilities Commission to appoint an "interconnection ombudsman". The law also requires the PUC to align its interconnection rules with best practices and to prioritize interconnection of solar resources and energy storage systems used to serve on-site load.

Interconnection is an essential component of distributed generation project development and operation. Policies enacted since 2019 have led to a flood of interconnection requests by project developers, seeking access to the grid. Each request must be studied, sequentially, to identify what grid upgrades and interconnection facilities must be built for safe and reliable operation. Large projects and those connected to the interstate transmission grid generally interconnect under federally jurisdictional procedures, like the interconnection procedures adopted by regional grid operator ISO New England. 

Smaller distributed generation projects in Maine generally use the state-jurisdictional interconnection process, which operates under the PUC's Chapter 324 rule. The rule specifies rights and responsibilities of both the project developer as interconnection customer and the utility. The recent flood of interconnection requests has caused project developers to complain about lengthy timelines, inflexible procedures, and missed deadlines by utilities.

To address these concerns, the Maine legislature recently enacted the distributed generation interconnection reform act, Public Laws of 2023 chapter 307. Introduced as LD 327, the law as enacted requires the PUC to appoint an interconnection ombudsman to assist people seeking state-jurisdictional interconnection of solar resources and energy storage systems. The interconnection ombudsman's duties include tracking interconnection disputes, facilitating their efficient and fair resolution, reviewing utility policies to assess opportunities to reduce disputes, convening stakeholder groups, and reporting. The position must be funded by interconnection fees or sources other than general ratepayer funds, and the PUC must make a good faith effort to appoint the ombudsman within 12 months of the law's effective date.

The law also requires the PUC to adopt interconnection rules that prioritize interconnection of solar resources and energy storage systems owned by customers of investor-owned transmission and distribution utilities and used to serve an on-site load. It also requires the PUC to convene an interconnection working group. 

Maine enacts law to develop clean energy on PFAS-contaminated lands

The Maine legislature has taken a significant step to promote the economic reuse of agricultural land contaminated by perfluoroalkyl and polyfluoroalkyl substances (PFAS) through the development of renewable energy projects. A newly enacted law will require state regulators to solicit proposals for renewable energy projects, with a primary preference given to projects located on PFAS-contaminated agricultural land. The law could help Maine address challenges arising from farmland contamination with PFAS, while promoting renewable energy development. 

Importantly, the law represents a new wave of Maine energy contracting policy, because it requires the procurement of both energy and renewable energy credits (RECs), rather than one or the other. By mandating the acquisition of both energy and RECs, the law has potential to enable Maine consumers to truly say they consumed renewable power specifically from these projects, as a result of these contracts.

An Act to Promote Economic Reuse of Contaminated Land Through Clean Energy Development was introduced as LD 1591, a bipartisan bill sponsored by Senator Stacy Brenner with co-sponsors including Representative Zeigler, Senators Bennett, Black, Carney, LaFountain, and Pouliot, and Representatives Boyle, Campbell, and Hall. In a statement, Senator Brenner noted that PFAS chemicals have been found on at least 56 Maine farms in high amounts, limiting or effectively ending their agricultural production. 

In response, the sponsors proposed a bill that called for the Maine Public Utilities Commission to solicit proposals to sell power from renewable projects on contaminated agricultural lands. Following amendment by the Joint Standing Committee on Energy, Utilities and Technology, the law was enacted by the Maine legislature as Public Laws of 2023 chapter 321, and signed by Governor Mills on June 26, 2023. 

In its final form, the law requires the PUC to conduct one or more competitive solicitations for contracts for energy and renewable energy credits from new renewable energy projects. The law requires the PUC to direct Maine's investor-owned transmission and distribution utilities to enter into contracts to purchase power and RECs from selected projects. The law prescribes procurement of amounts equal to at least 5% of Maine's retail electricity sales in 2021, plus additional amounts to cover any unused contracting capacity under a previously enacted procurement law. 

The law requires the PUC to select only projects that will benefit ratepayers, to give primary preference to projects located on contaminated land, with secondary preference for projects that minimize use of forested land and uncontaminated farmland. Contracts can be for up to 20 years, or longer if the PUC finds this prudent. Projects combined with grid-connected energy storage systems are also eligible but must promise that the storage system will remain stationary and under the same ownership throughout the contract term. Combined projects must also submit a separate generation-only bid.

A critical distinction of this law is its explicit requirement that proposals and contracts include both "energy and renewable energy credits", rather than offering either/or options. RECs represent the environmental attributes associated with a given megawatt-hour of electric energy and are crucial for tracking renewable energy under Maine's renewable portfolio standard. The holder of a REC generally may make claims about their use of renewable electricity, which effectively uses up the REC. The same claims can't be made if the REC is sold separately to someone else. 

Other recent Maine contracting programs generally have not required the sale of both energy and RECs. Nearly all contracts awarded under these programs have been for energy and not for RECs. Project developers selling their energy under these Maine programs typically sell their RECs separately to buyers in southern New England states who will use the RECs for compliance with their own state's renewable energy laws. As a result, these other Maine contracting programs don't generally directly result in renewable energy supply to Maine consumers. 

By contrast, the recently enacted clean energy development on contaminated land act requires contracts to be for both energy and RECs. It requires the PUC to adopt a process to assign the procured RECs to a standard-offer service provider to satisfy its own renewable portfolio standard requirements. While the details of that process will be specified by rule, the law contemplates that the procured RECs will enable Maine consumers to claim they consumed renewable energy as a result of contracts awarded under this program, unlike some of Maine's other recent energy contracting programs.

Maine enacts Beneficial Electrification Policy Act

The Maine legislature has enacted a law promoting beneficial electrification. The Beneficial Electrification Policy Act, chapter 328 of the Public Laws of 2023, gives Maine new tools to reduce carbon emissions from the state's heating, transportation, and other sectors, by promoting electrification through heat pumps, electric vehicles, and other measures.

Maine law requires the state to achieve specified reductions in its statewide net and gross annual greenhouse gas emissions over time. Gross annual emissions must drop to at least 45% below the 1990 gross level by 2030, falling to at least 80% below the 1990 level by 2050. Net annual greenhouse gas emissions may not exceed zero from 2045 on.

Separately, Maine's renewable portfolio standard law includes both goals and mandates that increasing portions of retail sales electricity must come from renewable resources over time. Statutory goals include that 80% of retail sales electricity in the State will come from renewable resources by 2030, and 100% by 2050. Enforceable mandates already require retail suppliers to cover increasing percentages of their retail sales with renewable energy certificates (RECs) from various classes of resource; for 2023, the total RPS mandate percentage exceeds 50%, rising to 84% by 2030.

Maine has already largely decarbonized its electric power sector. According to the Maine Department of Environmental Protection, "Annual CO2 emissions from fossil fuel combustion in the electric power sector have decreased by 91 percent since they peaked in 2002 largely by replacing high carbon fuels with lower carbon energy sources, primarily natural gas and renewable sources."

Even though the electric sector has largely cleaned up its act, heating and transportation continue to account for the bulk of fossil fuel use in Maine and associated carbon emissions. Transportation alone accounted for 49 percent of Maine's CO2 emissions from fossil fuel combustion in 2019. Technologies like heat pumps and electric vehicles have potential to displace these fossil fuel uses, in ways that can reduce both carbon emissions and consumer costs -- a concept termed beneficial electrification.

Building on Maine's original beneficial electrification law enacted in 2019, the Beneficial Electrification Policy Act defines "beneficial electrification" as:

electrification of a technology or process that results in reduction in the use of a fossil fuel, including electrification of a technology or process that would otherwise require energy from a fossil fuel, and that provides a benefit to a utility, a ratepayer or the environment, without causing harm to utilities, ratepayers or the environment, by improving the efficiency of the electricity grid or reducing consumer costs or emissions, including carbon emissions.

Sponsored by Senator Nicole Grohoski, and co-sponsored by Representatives Steven Foster and Chris Kessler, the bipartisan An Act to Enact the Beneficial Electrification Policy Act was introduced in the 131st Maine Legislature as LD 1724. Following legislative debate, the bill was enacted into law and signed by Governor Janet Mills on June 26, 2023.

The new law includes several measures supporting beneficial electrification. It requires the Public Utilities Commission to advance beneficial electrification in order to achieve the emission reduction and renewable energy goals of the State, reduce energy costs to consumers and provide economic and climate benefits for all ratepayers. It also authorizes the Governor's Energy Office to petition the Public Utilities Commission to procure energy from renewable resources to achieve Maine's emission reduction and renewable energy goals and to meet reasonably expected growth in electric demand. According to the regional grid operator ISO New England, demand for power will increase by 23% over the next decade to account for increasing electrification of heating and transportation.

The law also requires the Efficiency Maine Trust to include a 3-year beneficial electrification plan for end uses of energy as part of the Trust's triennial planning process, including all beneficial electrification measures that are cost-effective and reliably reduce electricity rates over the life of the measures.

In addition to requiring the Public Utilities Commission to report annually on its activities under the new law, the Beneficial Electrification Policy Act also directs the Commission to conduct a study on how to cost-effectively provide consumer financing of beneficial electrification products, including products for energy efficiency, home or business energy storage, electric vehicle charging equipment and other distributed energy products. The law requires the study to include consideration of methods including, but not limited to, on-bill financing by standard-offer service providers or competitive electricity providers. It requires the Commission to report back to the legislative energy committee by January 5, 2024.