May 13, 2011

Power struggle looms in Augusta; Renewable energy requirements would change under new bill

By Erin Rhoda, Staff Writer, Morning Sentinel, 13 May 2011

AUGUSTA – When you turn on a light, a certain percentage of the electricity you are using comes from renewable energy sources such as wind, water, solid waste or biomass.

Each year, electric utility companies must show they are relying on a greater percent of renewable energy. The goal, as Maine law stands now, is for 10 percent of electricity to come from new forms of renewable generation by 2017.

Legislation introduced Thursday by Gov. Paul LePage would eliminate the requirement that a greater percentage of Maine’s electricity come from new renewable energy resources each year. Under the proposed law, electricity providers would be able to stay at current levels of 4 percent of supply sources coming from new renewable energy.

The goal of the bill, L.D. 1570, is to lower the price of electricity for Maine consumers, said Kenneth Fletcher, director of the Office of Energy Independence and Security for the governor. Maine has the 12th-highest electricity prices in the nation, he said, costing $350 million more per year than the national average.

Some people, however, say the bill discourages the use of “green” energy in Maine and that it sets the wrong tone for potential developers examining whether to build renewable energy facilities, such as those for wind turbine or tidal power projects.

While electricity derived from renewable energy is not necessarily more expensive to produce than other forms of electricity generation, such as from natural gas, the cost is rooted in items called renewable energy certificates, Fletcher said. Electricity suppliers in Maine must purchase renewable energy certificates to prove they are meeting state renewable portfolio standards, and the cost is passed on to consumers, he said.

The state already relies on renewable energy for a significant portion of its total electricity load. About 26 percent of the electricity Mainers consume comes from hydropower. Nearly 4 percent comes from biomass, 2 percent from solid waste and 0.4 percent from wind, according to the Natural Resources Council of Maine.

The bill wouldn’t limit how much total electricity is derived from these renewable energy resources; it simply wouldn’t require electricity providers to increase by 1 percent each year their intake of renewable energy, Fletcher said. He intends for the legislation to bring total supply closer to total demand and, therefore, reduce the price of the renewable energy credit.

Lower electricity costs will ease the burden on consumers and help attract businesses to the state, he said.

“This is the first step. If in fact we achieve our objective, which I feel that we have to do, there is going to have to be a series of steps,” Fletcher said.

Some people, however, say that lowering the price of electricity for consumers is not more important than providing incentives for the production of “green” energy.

“The bill says price is king. It says that’s the only thing that matters,” said Dylan Voorhees, clean energy project director for the Natural Resources Council of Maine.

“The way we need to diversify and reduce our dependence on fossil fuels is both by increasing renewable energy and energy efficiency,” he said. “This bill goes completely against that.”

Jeremy Payne, executive director of the Maine Renewable Energy Association, said if the legislation passes, it will be a red flag to new and existing investors interested in developing Maine’s sources of renewable energy.

“I think stable state policy for any industry is always a good thing,” he said. With the renewable portfolio standards taking effect in 2007, “here we are in year four saying, ‘Oops, we don’t think it’s a good idea.'”

While the bill’s aim is to encourage business, it may end up hurting a number of businesses – developers, Payne said. “Unless there are some enormous changes, I’m 100 percent sure we’ll be in opposition to this bill,” he said.

Chris O’Neil, a spokesman for Friends of Maine’s Mountains, favors the bill because it could cut back on the number of wind farms being installed on Maine’s ridges. In some cases, the electricity produced is sold out of state.

“If Maine can get electricity from existing sources, it no longer has to increase generation sources that are either ineffective or unnecessary,” he said. “The demand for wind power development in Maine’s mountains is largely driven by people in Connecticut who want to run their Christmas lights into July.”

He said, “This governor ran on a platform of reducing energy and electricity costs. This is one small step. It’s one that we appreciate.”

Sen. Philip Bartlett, D-Gorham, a member of the Committee on Energy, Utilities and Technology, described the bill as “major legislation with significant ramifications that is being offered very late in the session.”

The bill probably will push the committee beyond its scheduled deliberation time.

“The biggest thing for me now is there is a thorough process of review and analysis,” Bartlett said. “There’s no way this bill could be heard and resolved by next Friday, in my view.”

Rep. Louis Luchini, D-Ellsworth, also a member of the energy committee, said he has concerns about the bill, especially with it being introduced late the session.

“I think it’s important that we try to reduce our reliance, obviously, on fossil fuels; and I think reducing the standards would be a step back from that goal,” he said.

Efforts were unsuccessful to reach Sen. Mike Thibodeau, R-Winterport, who sponsored the bill and is chairman of the energy committee.

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