AUGUSTA – A bill that would mandate an increase in the amount of electricity coming from renewable sources to Maine consumers received mixed reviews Tuesday in a legislative committee, with business interests split on the cost and benefits of the mandate, and supporters calling it crucial to Gov. Janet Mills’ initiative to blunt the impacts of climate change.
At issue is an energy policy called the Renewable Portfolio Standard, which requires the increased production of energy from renewable sources, such as wind, solar, biomass and hydro. The bill attempts to increase the mix of new renewable energy sources used to supply electricity to Mainers from 10 percent to 50 percent by 2030.
As do roughly 30 states, Maine requires a certain percentage of its power to come from renewable energy, subsidized by electricity customers. But Maine’s law is 20 years old and isn’t working as intended. Tune-up efforts in recent years have broken down amid partisan disagreements. But now, with Democrats in the control of the Legislature and Blaine House, clean-energy advocates see an opportunity.
“We spent the last eight years talking about the cost of renewable energy and eight seconds talking about the benefits,” said Jeremy Payne, executive director of the Maine Renewable Energy Association. “We think the benefits far outweigh the costs.”
Among the benefits, Payne testified, are an estimated $640 million in new investment in solar and wind projects in Maine and a net increase of 1,900 jobs over the 10-year period.
In April, Mills proposed the creation of a 30-member Maine Climate Change Council to help achieve her ambitious goals on lowering the state’s greenhouse gas emissions and increasing renewable energy generation. Mills says she wants 80 percent of the electricity consumed in Maine generated by renewable sources by 2030. The RPS bill under debate Tuesday could serve as a cornerstone of those efforts, supporters indicated.
“This is the only piece of legislation out there that’s going to help the governor achieve her publicly stated goal of 80 percent by 2030,” Payne said.
A QUESTION OF COST
But members of a collection of major Maine and New England businesses, called the Coalition to Lower Energy Costs, said the measure would be costly for them, in part by creating a sellers market for renewables in a state that already has a robust green energy mix and doesn’t need so much extra generating capacity. The coalition includes paper companies and manufacturers that are part of the Industrial Energy Consumer Group.
“We’re gravely concerned that this bill imposes significant and unspecified new costs on already burdened Maine electric ratepayers,” said Tony Buxton, a lawyer who represents the group. “Our own analysis suggests the costs could be on the order of 2 to 4 cents per kilowatt-hour, for every kilowatt-hour of energy sold at retail in Maine. This is a huge and unprecedented new cost.”
The issue of cost had some of Maine’s major employers lining up on opposite sides of the bill. Cianbro, which employs 1,300 Mainers in construction projects that include the energy sector, said the bill would create new jobs and be a catalyst for economic development. Bath Iron Works, however, said unforeseen increases in energy costs could put at risk its ability to compete on future Navy ship contracts. BIW has 5,700 Maine workers.
According to the latest information compiled by the PUC, compliance with the current law costs ratepayers roughly $20 million in 2016. Suppliers used 41 power plants to meet the law’s mandate, roughly half of which were biomass plants.
The costs added up to an average rate impact of 0.16 cents per kilowatt hour. Viewed another way, it translated into 86 cents per month, or a 1 percent increase, on a residential bill. For large industrial customers, including some who are against the bill, the cost was $800 per month, according to the PUC.
Payne’s group said consultants it hired found that the cost going forward will remain in the 1 percent range, adding $1.16 a month to an average home bill.
Payne’s position was supported by an odd ally in this debate – Central Maine Power. CMP typically opposes renewable energy mandates. But in deference to a side agreement it negotiated with environmental groups in the New England Clean Energy Connect transmission line case, CMP is supporting the RPS bill. Kathleen Newman, CMP’s lobbyist, said recent contracts at the PUC show that large-scale solar projects can come in below wholesale market prices. That could let Maine hit its ambitious RPS targets, without significant impact on rates.
“That’s good for our climate and our customers,” she said.
Payne said he expects solar, primarily, as well as wind, to dominate proposals if the law passes. The increased efficiency of wind turbines and falling costs of photoelectric panels makes those two energy sources the most economic now.
Payne estimates that two-thirds of the projects would be built in Maine, with the remainder in other New England states. Wind and solar projects don’t need a large labor force once they’re operating, but a consultant hired by Payne’s group estimated that 1,900 jobs would be created in Maine between now and 2030, to handle permitting, construction and other development tasks.
Maine’s original RPS was passed as part of the state’s 1997 electric utility restructuring law. Two years later, the Maine Public Utility Commission adopted rules requiring each electricity provider to supply at least 30 percent of their total electric sales using electricity generated from eligible renewable and certain energy-efficiency resources.
Since then, the RPS has been amended several times, creating two distinct classes. Class II includes existing renewables. A newer tier, Class I, is composed of cleaner renewables built or extensively retrofitted after 2005.
Class I standards were set to increase a percent a year starting in 2008, rising to 9 percent in 2016. Two years ago, Maine extended the Class I requirement of 10 percent until 2022.
In 2016, the most recent year captured in PUC records, most of compliance with the law came from aging, retrofitted wood-fired power plants. That’s not in keeping with the law’s original purpose to jump start new clean-energy projects.
The proposed bill makes several changes to resource eligibility, in an effort to get to the 80 percent goal by 2030.
It would increase the percentage of new, Class I renewable energy from 10 percent as required by existing law, to 50 percent by 2030. This Class I requirement would be in addition to the 30 percent Class II mandate under existing law.
The bill also would create a new “thermal” renewable portfolio standard, aimed at encouraging the development of more-efficient biomass generators and wood-fired boilers that could heat schools and hospitals, for instance. A similar law is in effect in New Hampshire.
The PUC would make yearly solicitations for long-term contracts with new renewable resources.
Coloring the debate is confusion over Maine’s current mix of renewable generation.
According to the federal Energy Information Administration, three-quarters of Maine’s net electricity generation came from renewable sources in 2017. Roughly 33 percent came from hydroelectric dams, 25 percent from biomass generators using mainly wood waste, and 20 percent from wind turbines. In addition, almost 20 percent of net generation came from natural gas.
But this figure captures net energy production, including power generated in Maine but sold out of state. Also, the data likely overstates the current contribution of wood-fired, biomass generators, a handful of which have closed or greatly reduced output over the past two years.
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