Maine Green Power offer provider selected

Maine energy regulators have chosen a manager for the Maine Green Power program.  In an April 4, 2016 order, the Maine Public Utilities Commission selected 3Degrees Group, Inc. to manage the program.  3Degrees has operated the program since its 2013 launch, and now has the Commission's approval to run the program for another five-year term, with some changes to pricing, renewable energy certificate procurement, and risk mitigation procedures.

Maine's green power offer was established by a 2009 Maine law requiring the Commission to arrange for a green power offer -- a fully renewable competitive electricity supply option -- and to ensure its availability to residential and small commercial electricity customers.  Following a 2010 RFP, the Commission selected 3Degrees, Inc. to provide the first round green power offer.  Its program, named Maine Green Power, was officially launched in April 2013.  It featured blocks of 500 kilowatt-hours per month of renewable energy.  Its existing term of service expired on March 31, 2016.

Legislation enacted in 2015 extended the green power program's sunset date to April 1, 2021. On November 12, 2015, the Commission solicited proposals from providers to manage the program for a five-year term beginning on April 1, 2016.  According to the April 4, 2016 order selecting 3Degrees, the Commission evaluated proposals "based on cost considerations, non-cost aspects such as supplier experience, customer sign-up ease, and the potential use of renewable energy credits (RECs) from community-based renewable energy projects."

The Commission found "that the proposal submitted by 3Degrees, Inc. best suits the needs of the green power program."  According to the order, that proposal maintained the 500 kWh block structure, with a 19% increase in pricing.  3Degrees also proposed separate commercial pricing that includes a reduction in the per kWh price for higher usage.

The Commission also approved changes to the program's REC procurement and risk mitigation processes "in light of the five-year contract and the potential volatility in REC prices in future years":

Because of significant concerns about the price of Maine RECs in the next five years, particularly Maine Class I RECs, 3Degrees has proposed that it shall be required to use no less than $5.50 per REC of revenues paid by program participants for REC procurement purposes, as calculated as an average over the most recent three year period. At the proposed pricing for a residential customer of $8.95 for a 500 kWh block of green power, a customer would pay $17.90 for one REC. The 3Degrees proposal would require that no less than $5.50, or approximately 30%, of the funds paid by customers be spent directly on procuring RECs for the program.

The order also approved a risk mitigation mechanism.  If the procurement cost of Maine-based RECs exceeds $6.50 per REC on average (including Class I and Class II), 3Degrees could procure RECs from resources elsewhere in New England, or even from outside New England with Commission approval.  But because the program is promoted as Maine-based, the Commission directed 3Degrees to develop appropriate consumer education materials to explain the potential that, under certain circumstances, RECs may be sourced from outside of Maine or even the New England market.

Maine green power offer moves forward

Green power offers are one way to help connect electricity customers with renewable energy.  These voluntary programs are designed to make it easier for willing consumers to choose a greener energy mix for their home or business.  Green power offers are typically voluntary, meaning customers must affirmatively enroll in the program and select their product.  In many states, they create a mechanism for customers to buy renewable power over and above state renewable portfolio standards.  While customers in competitive markets are free to select their energy supplier, under the green power offer program one supplier is designated by regulators as the default green supplier at any given time.  This formal designation gives the default green supplier better marketing access to its customers and facilitates interactions with the transmission and distribution utility.

Maine’s green power offer will launch soon.  In December 2010, following on the state legislature’s enactment of a community-based renewable energy pilot program, the Maine Public Utilities Commission issued a request for proposals from suppliers to operate a green power offer for residential and small commercial electricity customers for a three year term.

Eligible resources for the Maine program include fuel cells, tidal power, solar arrays, geothermal installations, hydroelectric generators that meet all state and federal fish passage requirements, biomass generators, and wind power installations.  In response to the Maine commission's request for proposals, suppliers submitted bids proposing to supply products consisting of sufficient renewable energy credits (RECs) to cover half or all of each customer’s load.

At Tuesday's deliberative session, the Maine Public Utilities Commission selected the state’s first green power offer supplier.  While many of the details of the winner’s offering remain confidential for the moment, the regulators expressed interest in a flexible product composed entirely of RECs from renewable energy facilities in Maine.  The product would remain resource-agnostic, meaning the supplier could provide RECs from any eligible Maine resource.  This flexibility contrasts with other offers to deliver RECs from a specific resource such as wind.  This product, which comes in addition to a customer’s underlying energy supply and local utility wires charges, is reported to cost 1.5 cents per kilowatt-hour.

With the winner selected, Maine’s green power offer will move forward.  The success of the program will depend on a number of factors including customers’ appetites, the economy, and the green supplier’s marketing practices.