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

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.

June 14, 2010 - Maine roundup: offshore wind, and changes at the PUC

Maine Public Utilities Commission chair Sharon Reishus will be stepping down effective July 12, 2010.  Governor Baldacci will name Commissioner Jack Cashman as Acting Commission Chairman.  In a press release, the Governor said he expects to nominate a new PUC Commissioner to be confirmed by the Legislature during a Special Session to be held later this summer.

Federal Secretary of Energy Steven Chu is visiting Maine today. He is touring the University of Maine's Advanced Structures and Composites Center, where Habib Dagher and company are design and testing floating deep-water wind turbine platforms.  This work will be supported by the $11 million bond Maine voters approved last week.

June 9, 2010 update: Maine election results, including off-shore wind bond

Maine just held elections. Voters weighed in on gubernatorial candidates (Democrats choosing Libby Mitchell, and Republicans Paul LePage), a citizens' veto of a tax reform law enacted last session, and a series of bond measures, all of which appear to have passed.

One of these bond measures touches directly on energy policy.  Question 2 addressed offshore wind energy as well as energy efficiency and infrastructure across the state's public higher education systems.

Question 2 (Bond Issue):

"Do you favor 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, that will 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?”

The Maine Secretary of State's Citizen's Guide to the Referendum Election (DOC) provides more detail on the allocation. The bond package includes:

• $11 million for "research, development and product innovation associated with developing one or more ocean wind energy demonstration sites", plus "funding for robotics equipment to accelerate wind energy components manufacturing in the State"
•  $9.5 million for energy and infrastructure upgrades at all University of Maine System campuses
• $5 million for energy and infrastructure upgrades at all Maine Community College System campuses
• $1 million for energy and infrastructure upgrades at Maine Maritime Academy

 Of these provisions, perhaps the Maine Marine Wind Energy Demonstration Site Fund is most interesting. The Fund was established by Chapter 414, Part D, Public Laws of 2009, and was amended by Chapter 645, Part C, Public Laws of 2009. The Legislature established the Fund to "provide the basic investment necessary to obtain matching funds and competitive grants and other funding from federal, state and private sources for research, development and product innovation associated with developing one or more ocean wind energy demonstration sites."

The Fund is designed to funnel money into research by the University of Maine. In fact, the definition of "research and development" enacted in Section H-1(2)(B) of the Public Law limits it to "applied engineering and scientific research and related commercial development conducted by the University of Maine", although partnerships are allowed. The Fund is administered by the University itself, on behalf of the trustees. Funds could be used to conduct siting studies for offshore wind sites, and to design, develop prototypes for, and test offshore structures, composites and components that could be manufactured in Maine.

As often seems needed in pitching a bond proposal, this one is designed to leverage matching dollars. The Secretary of State reported that it is anticipated that funds from this portion of the bond proceeds would leverage $24,500,000 in additional funds from other sources.

What does it cost? Total estimated life time cost is $33,058,750 representing $26,500,000 in principal and $6,558,750 in interest (assuming interest at 4.5% over 10 years).

Voters approved Question 2 by a 59/41 margin. 133,763 votes were cast in favor of the bond package, with only 94,016 against.

It will be interesting to see what comes out of the Maine Marine Wind Energy Demonstration Site Fund that we have all agreed to fund!

4/13/10

Maine news:

After the removal of the Fort Halifax dam, erosion continues to threaten the Fort Hill cemetery in Winslow.

The Maine Legislature concluded its session yesterday. Although they did approve putting a bond package to the voters, the approved measure does not include the energy efficiency funding that was initially proposed by Governor Baldacci.

The last bill enacted by the 124th Legislature was the energy corridor bill, which provides procedures for the review of proposals to develop transmission lines, pipelines, and other major energy infrastructure.

4/8/10

These are wild times for those of us involved with the Maine legislature, as they worked well past midnight last night... and didn't quite finish up their session. Everyone returns Monday for the final push. The House passed the $85 million bond package, but the Senate came up several votes short. Sadly, despite advocacy from Efficiency Maine Trust executive director Michael Stoddard and industrial energy consumers, the bonding for energy efficiency spending was stripped out of the package. Moving forward, one of the big issues with the bond package is that if it doesn't pass, dozens of businesses in Aroostook County, the largest county east of the Mississippi, will soon be without rail access, when the Montreal, Maine & Atlantic Railway will abandon 230 miles of track, unless the state can raise the funds to buy it. (The head of the Federal Railroad Administration Joe Szabo is coming to Maine to investigate the issue.) The vote may be based on principles, but it is also largely a partisan issue.

Also in Maine news: a good editorial by my friend Gordon Weil, arguing that Maine's Public Advocate -- the executive office tasked with looking out for the interests of utility ratepayers before the PUC and legislature -- should have more independence from the Governor. Gordon gives a first-hand account of how, in 1981, Governor Brennan created the office, and named Gordon as the first Public Advocate. Gordon also describes how in recent years, the public advocate has served more as an advocate for longer-term policies pushed by the Governor, as opposed to looking out for keeping rates low; indeed, in several contexts recently, organized industrial energy consumers have served as the sole advocates for low rates, in the face of proposals that would significantly increase all ratepayers' expenses.

Did Connecticut set its renewable portfolio standard too high? The energy committee has approved legislation that would halve Connecticut's goal of obtaining 20 percent of its electricity from renewable sources by 2020. Connecticut is nowhere near on track to meet this goal; renewable developers point to a lack of financing as the problem. What can policymakers do to address the capital and credit crunches?

On the federal level, as we move closer to legislation that will promote significantly larger deployment of grid-scale renewables, there is concern about the lack of transmission development -- and federal transmission oversight -- that may be needed to connect generation to load.

3/17/10

University of Maine President Robert Kennedy announced that he is stepping down in June 2011 to take another position within the University of Maine System -- a new position whose focus is the "greening" of the university system. Media coverage reports that President Kennedy will look at "sustainability, alternative energy and taking advantage of federal initiatives", plus the highly interesting "further business opportunities in energy fields".

The City of Ellsworth leverages $950,000 in Land for Maine's Future and other funds to defray the costs of the $2.4 million Branch Lake conservation project. Ellsworth will buy 451 acres outright, and then grant an easement to the Frenchman Bay Conservancy to protect the water quality of the lake while developing low-impact, nonmotorized public recreation. A working forest easement on 745 acres will go to the Forest Society of Maine providing for the sustainable harvest of timber. Two councilors objected to the premise that Ellsworth will issue $1,515,000 in general obligation bonds, but the motion passed 4-2 (with an abstention from a councilor who had dealt in easements on the land).