A multimillion-dollar subsidy that Maine electric customers pay to encourage the use of renewable power is up for review in the Legislature next week and there are likely to be differing views on its value and its future.
Even advocates agree that the Renewable Portfolio Standard, first enacted 18 years ago and updated in 2006, needs a tuneup and isn’t working as intended. But as with many energy issues, it may be hard to find common ground among Democrats, Republicans and Gov. Paul LePage.
And with time running out in the legislative session, debate over the RPS, as it’s known, may be folded into larger efforts to prop up the state’s biomass power plants. These wood-fired generators, which are crucial to the struggling forest products sector, have become the primary beneficiaries of the RPS law.
A public hearing is set for two bills Tuesday.
L.D. 1147 is being presented by Democrats. It seeks to maintain the law’s status quo until 2028.
L.D. 1185 seeks to update the RPS law and is being presented by House Minority Leader Ken Fredette, R-Newport. As of Friday, neither bill had language attached, so no details were publicly available. Fredette didn’t respond to repeated requests for information.
Twenty-nine states have enacted RPS laws, which require electricity suppliers to make up a certain share of their power sales with renewables. Maine’s initial law required at least 30 percent of total sales from sources that include wind, solar, hydro and biomass. The law also set a capacity limit of 100 megawatts, language meant to favor smaller, in-state plants and exclude Canadian hydro power.
But it turned out most of the 30 percent renewable power already was on line, from existing hydro dams and biomass generators. So in 2006, lawmakers updated the goals to encourage new projects. They dropped the 100-megawatt cap for wind and ramped up the 30 percent goal by a percentage point each year, until 2017.
Today, the extra 10 percent for new resources has been reached. That’s why the law is up for review. In the coming weeks, the Legislature will be asked to decide if the RPS law should continue as written or change to reflect new realities.
‘RENEWABLE’ AND CONTEXT
The most striking reality is summed up in the latest status report on Maine’s RPS activity, compiled by the Public Utilities Commission.
In 2015, the PUC found, the total ratepayer subsidy for the RPS program was roughly $12.6 million. Of that, $11.7 million went to generators considered new resources, what the law calls Class I.
But most of these projects weren’t really new. Roughly 88 percent of the generation mix came from biomass plants. Similar numbers have been recorded in previous years. That shows most of the RPS money is going to upgrade existing biomass plants, both free-standing and in paper mills.
The law is doing little to help build new wind farms or solar arrays. Only 11 percent of the Class I generation mix came from wind farms in 2015.
It’s true that over the past decade or so energy companies have developed wind farms worth more than $1 billion in Maine. But much of that investment was driven by power-purchase agreements with utilities in southern New England, not by Maine’s RPS.
These facts also add context to an often-cited statistic: Maine gets 40 percent of its electricity from renewables, a larger share than any state in the country.
Clean-energy advocates say the figure is misleading. It creates the impression that Maine’s law has triggered lots of activity. But 30 percent comes mostly from hydro dams that have been around for decades, and much of the subsequent 10 percent comes from upgrades on wood-fired boilers that still aren’t very efficient.
“Not a lot of new, efficient generation has resulted from Maine’s current RPS,” said Rep. Seth Berry, D-Bowdoinham. “So it’s important going forward, looking to the next administration and Legislature, to ask what we want our new energy generation to look like.”
Berry, who co-chairs the legislative committee that handles energy issues, said the RPS should be tailored to attract more investment in new, in-state renewables. He has joined other Democrats in co-sponsoring a bill that would keep the RPS law as it is for another 10 years.
This approach is likely to pick up support from environmental activists.
“Now that we have gotten to 10 percent, we should be reviewing the RPS to think about where we go from here, what’s worked and what can be improved,” said Dylan Voorhees, clean energy director at the Natural Resources Council of Maine.
One idea is to include large, wood-fired heating systems in the RPS program, an approach being taken in New Hampshire and Massachusetts. These so-called thermal credits reward systems that heat schools and large businesses, for instance, but don’t generate electricity.
Also on the table is a perennial bid from Republicans and LePage to eliminate the 100-megawatt cap for other Class I renewables, which they say would create an incentive to attract Canadian hydro. But Democrats and their allies say it would hurt local generators, and is a non-starter because of the lack of direct transmission lines and a Quebec law that restricts power discounts to residents.
The disagreement over the 100-megawatt cap is emblematic of the confusion and conflicting information about RPS.
One thread, promoted by LePage, is that the program is a burden on ratepayers and contributes to Maine’s above-the-national-average electric rates. In 2012, he cited a study done in part by the Maine Heritage Policy Center that predicted the RPS would push up electric rates by 8 percent or $145 million by 2017, and add $80 a year to a typical household power bill.
That hasn’t happened. Home retail rates peaked in 2013, and now are roughly equal to what they were in 2012. The changes are most-closely tied to the cost of natural gas, used to make half of New England’s power.
The latest PUC report also verifies the cost of the program to ratepayers. In 2015, the average home customer paid 60 cents a month, or $7.20 a year. Of that, 55 cents a month went to the new Class I generators. The money helped support 30 power plants. They included 20 biomass plants, four hydro dams, three wind farms and one landfill gas plant.
Twenty-five of these generators were located in Maine. In total, 99 percent of the power was generated in Maine.
These figures give lawmakers an important reference point: Home customers are paying 55 cents a month to help save wood-fired power plants, and the logging and trucking jobs associated with them.
“Given the attention to biomass, and that most of the money is going to that, the Legislature won’t allow RPS to expire,” said Tim Schneider, the state’s public advocate.
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