During these past few weeks, there has been an ever-changing debate in Maine among the governor’s administration, legislators, and renewable energy advocates over whether to do away with or add to language in the state’s Wind Energy Act of 2008. L.D.1791, a bill proposed on behalf of Republican Gov. Paul LePage, could dictate the future of project development in the state.
When first introduced, the bill aimed to eliminate megawatt targets of the 2008 law and replace them with non-binding goals to increase economic benefits, especially manufacturing jobs, and to lower electricity prices for ratepayers. The megawatt goals include 2,000 MW by 2015 and 3,000 MW by 2020, and the governor’s administration has argued that they are far fetched and serve little purpose.
Patrick Woodcock, director of the Maine Governor’s Energy Office, says the megawatt goals were “perhaps a bit ambitious at the time of the 2008 law.” In fact, Maine currently only has about 450 MW of wind online and another 200 MW or so approved – a total much lower than the law’s 2 GW by 2015 goal.
Nonetheless, local wind energy advocates and stakeholders maintain that the megawatt targets help encourage investment and show that Maine is serious about wind development.
Jeremy Payne, executive director of the Maine Renewable Energy Association, says the law has created certainty for applicants. Although he admits that the state is unlikely to achieve the 2015 target, he notes, “The goals are just that: goals.”
In Maine, Massachusetts-based Patriot Renewables has two operating wind farms, one under construction and a few in stages of early development. Todd Presson, the developer’s chief operating officer, says the targets helped attract Patriot to the state.
“The goals in the Wind Energy Act were an important part in our decision to evaluate sites in Maine,” he explains. “It does send a signal at the highest level that the state is encouraging the development of that kind of project. I wouldn’t say it was the only reason, but it was an important reason.”
Presson adds that Maine has good sites with access to transmission and currently offers a clear permitting path for wind projects. “Maine is a good place to be,” he says.
According to Payne, however, that could soon change. Following a public hearing, L.D.1791 was amended to keep the megawatt goals – a small victory for wind advocates – but the bill now also seeks to require developers to prove a project’s economic worth before receiving approval from the state’s Department of Environmental Protection. The original bill had included a goal, not a mandate, that a developer substantiate job creation and lower electricity rates.
“It would be healthy as part of a project proposal to show how many jobs will come with the project, whether there are any components of the project that are being manufactured in Maine, and if there are any components of the power purchase agreement (PPA) that would keep rates down or lower rates,” says Woodcock.
Presson notes that Patriot Renewables and some other developers often include information about indirect benefits of a proposed project, such as jobs, as part of their applications. “I think that conversation is already out there,” he says. “I just don’t see a need for it at the legislative level at all.”
Payne argues that the amended bill has ambiguous language and unrealistic expectations. Furthermore, he believes the proposed mandate would discourage investment and be used as a tool to deny new wind projects.
“It’s not clear what hoop developers are being asked to jump through – how wide it is, how narrow it is,” he comments, later adding, “Unpredictability is the enemy of development.”
He says the bill’s mandated results are simply out of a developer’s control. For example, he says a developer would love it if there were production or manufacturing facilities in Maine, but the fact that the state currently has less than 1 GW of wind power does not necessarily attract big manufacturers.
Another claim made by the LePage administration is that prices have not been reduced much as a result of wind development thus far. Woodcock says that is largely because most projects sell their power out of state.
Indeed, Patriot Renewables sells its Maine wind farms’ output to nearby states, and developer First Wind recently entered PPAs with Massachusetts utilities for two of its Maine projects. However, both Presson and Payne say there is a price-suppression effect, even when the electricity is sent elsewhere.
“Maine is part of a regional grid. If Massachusetts or Connecticut is paying for the development of new wind, we all benefit price-wise,” Payne explains. He also cites a study by London Economics that found the price-suppression benefits of adding more wind power to the grid system could equal $4.5 million in annual savings for Maine ratepayers.
This isn’t the first time LePage and his administration pushed back against wind development in the name of lower electricity rates. Last year, the governor said developer Statoil’s proposed Hywind Maine offshore wind pilot project was a “$200 million burden” for the state because of above-market prices and led an effort that made it difficult for the project to receive a power purchase agreement. Statoil eventually abandoned the project.
If passed, the amended L.D.1791 could require developers to prove exact rate reductions for a proposed project. Payne calls that a nearly impossible task: “That’s just not how the grid works,” he says.
The fate of L.D.1791 remains uncertain. Although the Maine legislature’s Energy, Utilities and Technology Committee ultimately voted down the bill 7-6, Payne says it will still be debated on the floor of the state House and Senate.
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