Maine sets FY2021 electric efficiency procurement cap at about $49 million

Maine utility regulators have set the upper limit of possible ratepayer funding for electric efficiency resources under the state's energy efficiency procurement program, at approximately $49 million for fiscal year 2021. These amounts are in addition to other energy efficiency costs, such as for greenhouse gas emission credits under the Regional Greenhouse Gas Initiative or the costs of compliance with other Maine efficiency programs. The Public Utilities Commission's establishment of the FY 2021 electric efficiency procurement cap is one step in the sequence under a state law requiring transmission and distribution utilities to procure the maximum achievable cost-effective amount of electric energy efficiency and conservation resources, subject to a rate impact limitation capping ratepayer assessments at 4% of total retail electricity and transmission and distribution sales.

Maine's energy efficiency policy is largely governed by the Efficiency Maine Trust Act, initially enacted in 2009 and subsequently amended several times. As it stands in May 2020, the Efficiency Maine Trust Act requires the Public Utilities Commission to "ensure that transmission and distribution utilities on behalf of their ratepayers procure all electric energy efficiency resources found by the commission to be cost-effective, reliable and achievable . . . except that the commission may not require the inclusion in rates under this subsection of a total amount that exceeds 4% of total retail electricity and transmission and distribution sales in the State as determined by the commission by rule." This electric efficiency procurement mandate is sometimes described as targeting "MACE", or Maximum Achievable Cost-Effective, energy efficiency procurement, subject to the "4% of sales" cap.

The Commission's Rule Chapter 396 presently provides a four-step process for determining the dollar figure associated with the "4% of sales" cap on ratepayer funding. First, the Commission determines the total retail electricity and transmission and distribution sales for a given year, based on utility revenue data from the U.S. Energy Information Administration. For 2018, the Commission used Form EIA-861 data to determine total retail sales for 2018 of $1.26 billion. Second, the Commission deducts amounts collected during the same year pursuant to prior procurement orders or other electric energy efficiency assessments. Third, the Commission multiplies the resulting "sales figure" by 4% to calculate the "gross utility procurement cap". Finally, the Commission subtracts funds expected to already be included in rates during the upcoming fiscal year for electric energy efficiency programs, to yield the "net utility procurement cap". According to the Commission, "Based on the EIA sales level and this adjustment, the 4% of sales cap on funding provided by electric ratepayers during the second year of the Fourth Triennial Plan is approximately $49 million."

Separately, the Commission will determine the final budget for electric energy efficiency resources for fiscal year 2021, also known as the second fiscal year of the Efficiency Maine Trust's Fourth Triennial Plan, and will specify a total amount to be included in electricity rates. Once the Commission determines this funding level from electric ratepayers for FY2021, it will issue a further order determining whether the funding is below the "4% of sales" cap.