Investing in Energy

Posted Jan. 07, 2010, at 7:31 p.m.

Nearly $9 million, much of it from a regional greenhouse gas cap-and-trade program, will go to Maine businesses to help with energy efficiency projects. The funding will reduce energy expenses, allowing the companies to invest that money in other areas such as payroll, while reducing harmful emissions. This highlights the benefits of the cap-and-trade program along with investments in energy efficiency.

The grants are the first to industrial users under the Regional Greenhouse Gas Initiative. RGGI, which includes 10 states from Maryland to Maine, aims to cut greenhouse gas emissions by 10 percent by 2019. It would do so with a cap-and-trade system for greenhouse gases that rewards efficient use of fossil fuels and provides incentives for innovation. A cap-and-trade system works by governments setting a cap, or limit, below the current emission level from a specific source, power plants, for example. The emissions amount is divided into credits, which companies can trade, buying or selling based on their levels of efficiency and demand.

Maine’s credits were sold to plants that sell power to the electricity grid through an auction.

The money raised through auction is put into a trust fund to support energy efficiency work and to reduce electricity rates for consumers. One round of grants has been made for smaller efficiency projects, including weatherization. This is the first for large users.

The roughly $3.5 million in RGGI money is supplemented by about $5.4 million from the recent stimulus measure. This nearly $9 million will lead to more than $80 million in private investments in Maine.

The Jackson Laboratory in Bar Harbor, for example, received $1 million toward a $4.4 million project to replace its oil-burning heating system with biomass burners. “In today’s economy, it would have been very difficult, if not impossible, to do our project without this grant,” said John Fitzpatrick, the lab’s senior director of facilities.

The largest grant will go to Verso Paper Corp.’s mill in Bucksport, which will spend nearly $46 million to significantly reduce its use of oil.

The investment is all about the mill remaining competitive by lowering the costs of paper production, says company spokesman Bill Cohen.

The 16 projects, which also include Prime Tanning Co. in Hartland; Lincoln Paper and Tissue; and Johnson Outdoors Watercraft Inc. in Old Town, will reduce carbon emissions by more than 200,000 tons and electricity use by more than 42 million kilowatt-hours annually.

As important, they are expected to create 950 jobs, using the Department of Energy’s metric for job creation. The facilities receiving the grants employ 7,000 people. Many of them have had recent layoffs.

Lowering energy costs has become a mantra of government and business in Maine. These grants will make it a reality for paper mills and several other large employers.

http://bangordailynews.com/2010/01/07/opinion/editorials/investing-in-energy/ printed on September 19, 2014