Heat pumps in Maine give lowest-cost heat, per state energy office

Heat pumps in Maine heated homes and other buildings at a lower per-unit cost compared to furnaces fueled by natural gas, oil, or propane, or electric baseboard heating, according to statewide average data recently reported by the state energy office. 

Maine's state energy office describes the state as having "long been a national outlier for reliance on oil". According to the U.S. Energy Information Administration, "Three-fifths of Maine's households use fuel oil as their primary energy source for home heating, a larger share than any other state." EIA data for 2020 shows that Maine consumed 31 million barrels of petroleum for all uses, with residential heating accounting for 7,155,000 of these barrels at a cost of over $652 million.

Heat pumps provide energy efficient heating and cooling to Maine’s homes and businesses and reduce the state’s high reliance on fossil fuels for heating. State law and Maine's Climate Action Plan establish a goal for the installation of 100,000 new heat pumps by 2025, with 15,000 new heat pumps being provided to income-eligible households. 

Efficiency Maine Trust, the state's quasi-governmental energy efficiency organization, offers rebates for heat pump installations for residential, low-income, and commercial customers. According to Efficiency Maine Trust, "Tens of thousands of heat pumps have been installed in homes and businesses across Maine. They are the most popular heating system across all of Efficiency Maine’s rebates because they offer highly efficient heating, air conditioning, and dehumidification."

A legislative resolve enacted in 2022 directed the Governor's Energy Office to monitor, in coordination with the Office of the Public Advocate and the Public Utilities Commission, factors that directly affect energy supply and costs in the service territory of the northern Maine independent system administrator and in other rural or geographically isolated communities in the State, including, but not limited to, electric grid reliability, availability and costs of electric generation resources, electricity rates and heating fuel supplies and costs.

The Governor's Energy Office released a report in February 2023 addressing the resolve. Regarding heat pumps, the report notes:

Heat pumps provide energy efficient heating and cooling to Maine’s homes and businesses in addition to decreasing the state’s high reliance on fossil fuels for heating. The benefits of heat pump adoption and weatherization not only include lower prices as compared to other common heating systems (which in Maine are predominately delivered fuel), but also climate benefits including reduced greenhouse gas emissions and increased resilience to fossil fuel price swings. 

The report includes a graph presenting a price comparison of common heating systems in Maine, from 2019 through 2021, using statewide average data. The graph shows that heat pumps were the lowest-cost source of heat over the time period, relative to other typical heating systems such as furnaces fueled by natural gas, oil, or propane, or electric baseboard heating:

In addition, Maine utility Central Maine Power Company has offered a "Seasonal Heat Pump Rate" pilot program limited to the first 5,000 participants. The pilot rate differs from the utility's standard tariffed rates, but has potential to provide significant savings to heat pump users whose usage characteristics align with the rate's incentives.

Maine PUC RFP for Wood-fired CHP

Maine utility regulators are soliciting proposals from qualifying combined heat and power projects that use wood fuel to generate electric heat and power for industrial or space heating purposes to sell energy, capacity or renewable energy credits (RECs) to Maine's investor-owned transmission and distribution utilities. 

Cogeneration, or combined heat and power (CHP), involves the generation of electricity in ways that also enable the productive use of heat from the generation process. Cogeneration can provide significant efficiency advantages compared to standalone electric power generation using thermal fuels, because typical standalone electric power plants cannot capture as much of their fuels' energy content as can CHP plants.

A law enacted by the Maine legislature in 2022 requires the state's Public Utilities Commission to establish a wood-fired CHP program. The law, An Act To Establish a Wood-fired Combined Heat and Power Program. P.L. 2021, Chapter 604, creates opportunities for qualifying combined heat and power projects to seek Commission-ordered long-term contracts to sell electricity or RECs to Maine's investor-owned transmission and distribution utilities.

To implement the Act, the Commission has issued a Request for Proposals in Docket No. 2022-00342. To be a qualifying combined heat and power project for this RFP, a generation facility must meet the requirements of Section 3 of last year’s new law, including the following:

To participate in this RFP, a project must meet the eligibility requirements specified in the Act. Specifically, a project must be a combined heat and power project, which is defined as a facility that uses wood fuel to generate electric heat and power that is used for industrial or space heating purposes. Wood fuel is defined as biomass derived from: (1) forest products manufacturing residuals, including, but not limited to, mill chips, sawdust, bark, shavings and fines; (2) harvest residues, including trees or portions of harvested trees that are too small or of too poor quality to be used for wood products; or (3) downed trees from weather events and natural disasters, nonhazardous landscape or right-of-way trimmings, and plant material removed for purposes of invasive species control.

The Act and the RFP impose additional requirements, including that qualifying projects must be connected to the Maine electric grid; have an in-service date after November 1, 2022; satisfy the limits on net generating capacity of no less than 3 MW and no more than 10 MW in any hour; be highly efficient, as determined by the Commission; and not be a participant in net energy billing under Maine law. 

Under the RFP, bidders selected by the Commission will enter into contract(s), with one or both of Maine's investor-owned utilities, for a term of up to 20 years. The RFP prescribes that the Commission will evaluate proposals based upon the requirements and objectives stated in the Act and the RFP, which include 30% for efficiency and heat utilization, 40% for total cost, and 30% for certain other policy-based factors (like alignment with waste diversion and renewable policies, economic impact including jobs, net greenhouse gas emissions, location and local electric demand, and alignment with load patterns expected from beneficial electrification).

According to the RFP, responsive proposals must be submitted to the Commission by 11:59 PM on March 3, 2023.

Where did New England's electricity come from in 2022?

Natural gas was the source of about 45 percent of the electricity consumed on the New England grid in 2022, according to regional wholesale market operator ISO New England, Inc., and nuclear power provided another 23 percent. Imported electricity accounted for about 14 percent. 

ISO-NE is the federally designated regional transmission organization responsible for the electric transmission system and wholesale electricity market covering nearly all of the New England region. It describes itself as "the independent, not-for-profit corporation responsible for keeping electricity flowing across the six New England states and ensuring that the region has reliable, competitively priced wholesale electricity today and into the future."

The grid operator periodically releases data on the portfolio of generating resources providing power to the wholesale market. Its most recent summary covers the 2022 calendar year. According to that summary of preliminary data, total production for the year (net energy for load, or NEL), amounted to 118,878 gigawatt-hours (GWh).

Of this total amount of electricity consumed from the New England electric grid in 2022, in-region electric generation accounted for 103,877 GWh in 2022, or about 87 percent. Imports from neighboring control areas like Quebec, New Brunswick, and New York accounted for about 14 percent. ISO-NE's analysis then deducts about 1 percent of NEL to account for electricity consumed in pumping water uphill for use in pumped storage generation facilities.

Focusing on in-region generation in 2022, ISO-NE's data shows the following resource contributions to net energy load:

In commentary, ISO-NE noted that solar power production increased by about a third from 2021 to 2022, reaching 3 percent of net energy for load, and nearly tying wind power; meanwhile, the grid operator noted that oil's contribution increased year over year, "reflecting rising prices for the region’s main energy fuel, natural gas, that made oil more economical at certain times of the year."

Federal funds expected for tribal clean energy projects

The U.S. Department of Energy's Office of Indian Energy Policy and Programs has announced its intent to make $50 million available this spring for clean energy technology deployment on tribal lands. 

The Energy Policy Act of 2005 authorized the Department of Energy to establish the Office of Indian Energy, which is directed and authorized to provide, direct, foster, coordinate, and implement energy planning, education, management, development, and efficiency. Its mission is to maximize the development and deployment of energy solutions for the benefit of American Indians and Alaska Natives.

On January 26, 2023, the Office of Indian Energy issued a Notice of Intent (NOI) to release a $50 million Funding Opportunity Announcement (FOA) later this year, to support clean energy technology deployment on tribal lands. Through the anticipated FOA, the Office of Indian Energy plans to solicit applications from Indian Tribes, which include Alaska Native Regional Corporations and Village Corporations, Intertribal Organizations, and Tribal Energy Development Organizations to: 

• Install clean energy generating system(s) and/or energy efficiency measure(s) for Tribal Building(s) (Area of Interest 1);
• Deploy community-scale clean energy generating system(s) or energy storage on Tribal Lands (Area of Interest 2);
• Install integrated energy system(s) for autonomous operation (independent of the traditional centralized electric power grid) to power a single or multiple essential tribal buildings during emergency situations or for tribal community resilience (Area of Interest 3); or
• Power unelectrified Tribal Buildings (Area of Interest Area 4).

Except for Area of Interest 4, the NOI indicates that awards are intended for Tribal Buildings that are either (1) grid-connected (connected to the traditional centralized electric power grid), or (2) connected to an integrated energy system(s) that operates autonomously from the grid (not connected to the traditional centralized electric power grid). Area of Interest 4 is intended to deploy integrated energy system(s) or energy infrastructure to provide electricity to Tribal Buildings which otherwise would be unelectrified, where “unelectrified” means Tribal Buildings that are not connected to (1) the traditional centralized electric power grid, or not connected to (2) an integrated energy system(s) operating independent of the traditional centralized electric power grid. 

According to the announcement, awards are anticipated to range from $100,000 to as much as $5 million, depending on its Area of Interest.

The NOI, formally named Clean Energy Technology Deployment on Tribal Lands – 2023 (DE-FOA-0002974), is available on the Office of Indian Energy's funding opportunities website. 

131st Maine Legislature EUT Energy, Utilities and Technology Committee

 As 2023 advances, the 131st Maine Legislature has convened in Augusta to pursue its lawmaking agenda. Under the Legislature's rules, the Joint Standing Committee on Energy, Utilities and Technology (EUT) plays important roles.

The EUT Committee is one of the 17 joint standing committees of the Maine Legislature, charged with responsibilities pursuant to the Legislature's Joint Rules including considering and reporting to both chambers on legislation; reviewing and making recommendations on budgeting and fiscal policy issues concerning state government; conducting oversight and review of the actions of departments and agencies of state government; reviewing and making recommendations on gubernatorial appointments that require legislative confirmation; and performing other tasks assigned to them, like reviewing specific provisions of law, conducting studies on assigned topics, issuing reports on policy and legal issues of interest to the Legislature, and reporting out specific legislation pursuant to joint order. The EUT Committee exercises jurisdiction in the areas of energy, utilities and technology. Other committees exercise jurisdiction over other areas, such as environment and natural resources.

By rule, each of the joint standing committee consists of 13 members, 3 from the Senate and 10 from the House of Representatives. For the 131st Legislature, the following legislators have been assigned or appointed to the EUT Committee:

• Senator Mark Lawrence of York- Chair D - Senate District 35
• Senator Nicole Grohoski of Hancock D - Senate District 7
• Senator Matthew Harrington of York R - Senate District 33
• Representative Stanley Zeigler of Montville- Chair D - House District 40 
• Representative Mark Babin of Fort Fairfield R - House District 3 
• Representative James Boyle of Gorham D - House District 109 
• Representative Larry Dunphy of Embden U - House District 72 
• Representative Steven Foster of Dexter R - House District 32 
• Representative Valli Geiger of Rockland D - House District 42 
• Representative Christopher Kessler of South Portland D - House District 121 
• Representative Reagan Paul of Winterport R - House District 37 
• Representative Walter Runte of York D - House District 146 
• Representative Sophia Warren of Scarborough D - House District 124

The Committee's page on the legislative website provides information including contact information for Committee members and staff, and scheduling information, among other materials. 

December 24, 2022 capacity deficiency event in New England

New England's wholesale electricity grid experienced a capacity deficiency on December 24, 2022, according to grid operator ISO New England, Inc., but the system operator says its operating procedures successfully balanced supply and demand on the regional power system during evening peak hours, when unexpected generator outages and reductions and lower-than-expected imports led to a shortfall in operating reserves.

According to ISO-NE:

ISO New England did not call for controlled power outages on Christmas Eve, but did declare a capacity deficiency, meaning the region’s supply of electricity was insufficient to meet required operating reserves in addition to satisfying consumer demand, at 4:30 p.m. This action was taken after approximately 2,150 megawatts (MW) of resources scheduled to contribute power during the evening peak became unavailable. The outages and reductions coincided with net imports being approximately 100 MW less than had been expected based on that day’s Morning Report.

While the capacity deficiency was ongoing, at 4:40 PM, ISO-NE declared a "capacity scarcity condition" under its Forward Capacity Market’s Pay-for-Performance rules. This condition remained in effect until 6:05 p.m. Under the Pay-for-Performance rules, any resource that failed to meet its capacity supply obligation is penalized at a rate of $3,500 per megawatt-hour (MWh) for failing to meet its obligation, while resources that over-performed will receive $3,500/MWh of additional revenue. In total, ISO-NE has estimated penalties for the December 24 event to be approximately $39 million. In addition, any energy resources that cleared in the Day-Ahead Energy Market but failed to provide electricity in real-time are charged the real-time price for the missing energy; Real-Time Energy Market prices averaged approximately $484/MWh over the course of the day, peaking over $2,200/MWh during the 5 p.m. hour while the capacity scarcity condition was ongoing.

On January 12, 2023, ISO-NE provided an update on the December 24, 2022, capacity deficiency, "to help correct any confusion, misinformation, and misunderstanding resulting from various news stories and social media posts." According to that update, the incident was "mainly about timing". After noting that it entered the December 24 operating day with sufficient resource commitments to meet demand and required operating reserves, with a surplus of over 950 megawatts of fast-start resources, ISO-NE explains what happened next:

As the day went on, some generators in the region experienced unanticipated issues that caused them to go offline or reduce their output. These outages were caused by cold temperatures or mechanical problems, and not due to inadequate fuel supplies. Expected imported electricity from Canada was also reduced due to transmission system issues and unexpectedly high consumer demand in Québec. Despite these issues, New England was still expected to meet demand and operating reserves over the evening peak as of 3 p.m.

Around 4 p.m., additional unanticipated outages led to a capacity deficiency in the region. This meant that the 950 MW surplus was depleted and supply was insufficient to meet both demand and required operating reserves. In response, ISO New England system operators implemented procedures for dealing with capacity deficiencies. This included calling upon any resource that could respond quickly enough to be online for the evening peak, which usually falls between 5 and 6 p.m. during the winter months. The ISO dispatched all remaining offline resources that were available to provide electricity or operating reserves during this period.

In its update, ISO-NE described pricing and customer impacts from the incident:

Prices in the Real-Time Energy Market averaged more than $2,000 per megawatt-hour (MWh) during the 2.5-hour capacity deficiency. While high, these prices are unlikely to affect most consumers given how retail rates are set in the region. Though practices vary by state and utility coverage area, the rates paid by most retail customers are set for months-long periods and not subject to volatility within the wholesale marketplace. 

Almost all of New England’s wholesale electricity is bought and sold in the Day-Ahead Energy Market, where prices were unaffected by the capacity deficiency. Average day-ahead prices during that time were roughly $285/MWh.

As ISO-NE noted in its January 4 report, other regions of North America were challenged by extreme weather around the long holiday weekend, prompting varied responses outside New England including controlled power outages.

BOEM proposes Renewable Energy Modernization Rule for offshore wind

The U.S. Department of Interior's Bureau of Ocean Energy Management (BOEM) has announced a proposed rulemaking to amend its regulations governing offshore wind and other clean energy development on the U.S. Outer Continental Shelf (OCS). BOEM describes its proposed rule as "a major modernization of the regulations", reflecting lessons learned from the past 13 years. If finally adopted, BOEM projects that its Renewable Energy Modernization Rule would save the renewable energy industry $1 billion over 20 years, by reshaping the way the U.S. federal government leases sites on the OCS for offshore wind development.

The Energy Policy Act of 2005 authorized BOEM's predecessor, the Minerals Management Service (MMS), to issue leases, easements, and rights of way to allow for renewable energy development on the OCS. MMS first promulgated regulations governing renewable energy development on the OCS in 2009. In the ensuing years, the agency was restructured several times; since then, BOEM has conducted 11 auctions and issued 27 active commercial leases under its regulations implementing the OCS Lands Act.

According to BOEM, its accumulated experience and industry feedback have enabled the agency to identify "opportunities to modernize its regulations to facilitate the development of offshore wind energy resources to meet U.S. climate and renewable energy objectives." BOEM's proposed Renewable Energy Modernization Rule, issued on January 12, 2023, contains reforms including proposals for incremental funding of decommissioning accounts; more flexible geophysical and geotechnical survey submission requirements; streamlined approval of meteorological (met) buoys; revised project verification procedures; reform of BOEM’s renewable energy auction process; and greater clarity regarding safety requirements. 

In its notice of proposed rulemaking, BOEM asserts:

This proposed rule would facilitate the development of OCS renewable energy and would promote U.S. climate and renewable energy objectives in a safe and environmentally sound manner while providing a fair return to the U.S. taxpayer. These important goals would be accomplished by modernizing regulations, streamlining overly complex and burdensome processes, clarifying ambiguous provisions, enhancing compliance provisions, and correcting technical errors and inconsistencies. Through these changes, the Department aims to reduce administrative burdens for both developers and the Department’s staff, reduce developer costs and uncertainty, and introduce greater regulatory flexibility in a rapidly changing industry to foster the supply of OCS renewable energy to meet increasing demand, while maintaining environmental safeguards. 

These updates are necessary to ensure a durable and appropriate process is in place to advance renewable energy on the OCS.

BOEM's proposed rule contains eight major components, categorized under the following headings:

1. Eliminating unnecessary requirements for the deployment of met buoys.
2. Increasing survey flexibility.
3. Improving the project design and installation verification process.
4. Establishing a Public Renewable Energy Leasing Schedule.
5. Reforming BOEM's renewable energy auction regulations.
6. Tailoring financial assurance requirements and instruments.
7. Clarifying safety management system regulations.
8. Revising other provisions and making technical corrections.

Comments will be due 60 days after the notice's publication in the Federal Register.