October 23, 2013
Maine

Chapter 6: LePage wants cheaper energy for Maine

John Christie, ©Maine Center for Public Interest Reporting | October 23, 2013 | www.sunjournal.com

“Maine’s energy costs are too high – and it’s killing economic opportunity.”

The high cost of energy in Maine has been one of the most consistent themes from the governor – and one of the hardest to do much about, so far.

When LePage came into office, the overall cost of electricity in the state was 31 percent above the national average, according to federal statistics quoted by the LePage administration. Two years into the LePage administration, things had improved a bit – the state was 24 percent above the national average and 12th highest in the country.

The improvement was due to a decrease in the price of natural gas in New England, from which electricity prices are set.

“We were lucky,” admitted Patrick Woodcock, the head of the LePage energy office.

But luck will only get you so far, and Woodcock said those prices are starting to tick up.

LePage’s approach to more permanent solutions reveals – once again – his philosophical differences with the once-prevalent thinking in state government.

Democrats have generally come at the energy issue from a policy angle, stressing the environment. Thus, Gov. John Baldacci’s efforts to make Maine a major producer of wind power, a strategy that is still being debated.

LePage comes at it from the point of view of the consumer, the family spending too much to heat their home and the businessman who pays more for electricity than competitors.

He has been a cheerleader for the expansion of natural gas in Maine, including converting many state buildings to the cheaper fuel. And much of greater Augusta is being torn up right now to lay gas pipelines to business and homes.

Woodcock said LePage’s early support of natural gas “was controversial at the time. The inherent market was oil and those businesses were really opposed to the initiative.”

Woodcock credits LePage’s appointments to the Public Utilities Commission for making a change in regulations that includes a $1,200 rebate to convert a home to natural gas use. “That’s been driving this growth,” Woodcock said.

He cites another innovation by LePage that will help homeowners deal with the cost of keeping their homes warm that required the governor to modify his conservative opposition to the cap-and-trade plan known as RGGI.

Now, about $9 million of the $40 million RGGI funds will go to the Efficiency Maine Trust, a quasi-state agency, to help homeowners modernize their heating systems.

Steve Ward is the former state public advocate, a position created to represent consumers before the Public Utilities Commission (he held the position for 20 years) and is currently chair of the Maine Center for Economic Policy, a progressive think thank and advocacy group based in Augusta.

He said, “If the LePage administration played any important role in stimulating the second round of gas infrastructure build-out that we are now witnessing, they had a great deal of company: big paper companies and their lawyers, entrepreneurial gas developers like Summit and many (but not all) environmental organizations in Maine.”

Ward supports the new use of the RGGI funds because they will be used “for converting obsolete and dangerous furnaces in low-income homes to cheaper and cleaner fuels …”

But he added that the RGGI money was part of the omnibus energy bill that LePage vetoed (the veto was overridden). “The most positive achievement” of the Act, Ward said, was to give authority over funding for the Efficiency Maine’s programs to the professionals at the PUC and not the Legislature, where it is subject to “political maneuvering.”

The chief reason for LePage’s opposition to the bill was that it did not scale back the state’s ambitious wind power goals, which, he has said, give wind an unfair advantage over other forms of energy. At one point, he said he would support the Act if the Legislature gave him what he wanted about an offshore wind project.

The PUC had approved a $120 million deal with Statoil of Norway to test large scale floating wind turbines off Boothbay. LePage thought the deal was bad for consumers because it would pay the company above-market rates for the power and also because he wanted the University of Maine to be allowed to bid – well after the bids had been closed.

In the end, LePage vetoed the energy bill but got his way with the offshore wind contract and the UMaine wind project will now be considered by the PUC.

Critics claim forcing the PUC to go back on the Statoil agreement was not “business-friendly” – one of LePage’s go-to themes.

LePage admitted in the May interview, “We’re trying to get Statoil out … they’re a Norwegian company that comes to Maine, they get a contract to go deep offshore, deep water windmills, with no guarantees of creating jobs in Maine, no guarantees of anything. If it works we’ll create jobs, is what they said. We’ve had the University of Maine since 1865. They’re a land grant school, they’re a pretty good organization, I’m an alumnus, I like this university; they are working on deepwater windmills, but they’re not allowed to bid on this contract because Statoil is in before” the university was ready to bid.

Connors, the head of the state chamber, said this was one of the exceptions to his support to the governor.

“It’s nice to see his endorsement of the university and having them be a player,” he said, “but stepping away from a contract is probably one of the most baffling things – I’ve yet to understand his rationale.”

Naomi Schalit contributed to this story. Disclosure: Severin Beliveau, who is quoted in this story, contributed $250 to the Center in 2013. The Maine Center for Public Interest Reporting is a nonpartisan, non-profit news service based in Hallowell. Email: mainecenter@gmail.com. Web: www.pinetreewatchdog.org.

About the author: John Christie is the co-founder, publisher and senior reporter of the Maine Center for Public Interest Reporting. He has covered local, state and national politics as a reporter, editor and publisher at newspapers in Maine, Massachusetts and Florida and holds a BA in political science from the University of New Hampshire.