AUGUSTA – State lawmakers Tuesday rekindled a debate over how and whether state policy should play favorites when it comes to renewable energy.
For the third time in as many legislative sessions, lawmakers are contemplating a state law that requires a certain amount of the power consumed in Maine comes from renewable resources.
Known as the state’s Renewable Portfolio Standard, the law requires that at least 30 percent of the state’s energy comes from renewable sources including solar, biomass, hydro and wind. The standard also requires that the generation facilities contributing to that mix are smaller in output, limited to 100 megawatts, with only wind energy being excluded from that limit.
A bill authored by Gov. Paul LePage’s office would remove the 100-megawatt limit for all sectors of renewable energy, including hydropower. His top energy adviser said Tuesday the administration was flexible about changing the bill and was open to a simple expansion of the cap allowing generators of up to 400 megawatts to be included.
Patrick Woodcock, director of LePage’s Energy Office, said leveling the playing field for all renewables, not ratcheting back Maine’s commitment to green energy, was what the governor was after. Woodcock said any cap should be equally applied and would not favor one sector of renewable power over others.
Supporters of the bill say the change could open the door to cheap energy from Canada’s massive hydro projects in Quebec, New Brunswick and Nova Scotia.
That influx of juice could help drop Maine’s electricity costs, making the state more attractive to manufacturing and other industries that consume large amounts of electricity, Woodcock told members of the Legislature’s Energy Utilities and Technology Committee.
In February, the cost of industrial electricity was the 10th highest in the nation, Woodcock said.
“It’s 34 percent higher than the national average,” he said. From a regional standpoint, Maine’s power was less expensive than other New England states, but Maine’s manufacturing industries including the state’s forest products and paper-making sectors are not competing on a regional basis, he said.
LePage has vowed to do all he can to lower Maine’s energy costs, and Woodcock highlighted that again.
“As the world has become more globalized, there are two aspects of energy that we need to continue to prioritize: stability and low cost,” Woodcock said.
He said the bill doesn’t look to pick “winners and losers” but is designed to allow the market to sort that out.
He said he believes the governor and the Legislature want the same thing for Maine, and that is cheaper energy.
With an abundance of renewable energy production, Maine should better capitalize on its resources, Woodcock said.
The question the Legislature and LePage both want to answer is, “How do we ensure that our policies allow Maine to benefit to the maximum extent possible?” Woodcock asked.
He noted that Maine’s wind energy producers benefited from federal tax credits and renewable energy credits offered by southern New England states, including Massachusetts and Connecticut.
But opponents to changing the portfolio standard in Maine said investment and jobs from renewable development are substantial and lawmakers shouldn’t tinker with a policy that is doing what it was intended to do: growing homegrown energy sources and creating jobs.
“There has been more investment in the state of Maine in renewable power than in any other industry in the state of Maine – over $2 billion of investment has been made here in the state,” said Dan Riley, an Augusta-based lawyer representing the Maine Renewable Energy Association. Riley said he was in Augusta when lawmakers first crafted the portfolio standard in 1996, and the process was careful and on target.
Riley distributed a copy of Hydro-Quebec’s annual report for 2011-12 and highlighted a portion of it that shows the company already operates 19 hydro plants smaller than 100 megawatts, which could, if the company wanted to, offer power to Maine.
Combined, those 19 plants had a capacity of 800 megawatts, compared to Maine’s total hydro capacity of 622 megawatts, he said. The point was meant to illustrate how easily Hydro-Quebec could flood Maine’s power markets to gain market dominance.
Companies that have helped build Maine’s growing wind industry infrastructure also spoke to the committee Tuesday, pointing out the thousands of jobs and economic development the industry has triggered in Maine. They said inconsistent policy was their biggest fear.
“As a company of 47 years, consistency and predictability are very important to us,” said Bill Scott, the chief engineer for Maine Drilling and Blasting. “If this bill were passed, it would introduce tremendous amounts of uncertainty in the clean energy market.”
Scott said the introduction of the renewable standard in Maine had allowed his company to work on more than a dozen renewable projects in wind and hydro. He said the work was critical during a down economy when traditional construction work on roads, bridges and commercial development have been decreasing. He said it made up for as much as 15 percent of his companies’ revenues in recent years.
“These nominal incentives in the renewable portfolio standard send a very important market signal to investors,” Scott said. “Maine is open to clean-energy investment business and employment.”
The committee will take up the bill again during a work session later this month.
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