AUGUSTA, Maine — Gov. Paul LePage is proposing a major policy shift on renewable energy that the administration says will reduce high electricity costs but that businesses warn could be a job-killer by squelching Maine’s fast-growing “green energy” industry.
In a bill unveiled just last week, the LePage administration has proposed eliminating a requirement that power companies increase the amount of electricity derived from renewable sources by 1 percent a year through 2017.
The requirement — passed by the Legislature in 2007 — aimed to reduce Maine’s reliance on fossil fuels and diversify Maine’s energy portfolio by encouraging development of wind, tidal and biomass energy projects. Supporters claim the policy also promotes investment in Maine — including more than $1 billion by wind energy developers alone in recent years.
But utilities often achieve that mandate by purchasing “renewable energy credits” from power producers, the costs of which are passed along to consumers.
Ken Fletcher, director of the LePage administration’s Office of Energy Independence and Security, estimated that eliminating the annual 1 percent increase would save consumers $42 million by 2017.
Those savings could help Maine lower what are now the 12th highest energy rates in the nation, a distinction that Fletcher said discourages businesses from locating in Maine.
“This bill will not solve that today,” Fletcher said. “But like any journey, you have to take the first step before arriving where you want to be.”
But during several hours of testimony, representatives of several businesses said those energy savings could come at a significant cost by undermining the LePage administration’s top priority — job creation.
“On a personal note, it would make it much more difficult for companies like ours to put good people to work,” said Paul Koziell, speaking on behalf of the Freeport-based general contractor CPM Constructors as well as the organization Associated General Contractors of Maine.
Jackson Parker, president and CEO of Reed & Reed, a major player nationally in the construction of commercial wind farms, predicted LD 1570 would drive away business investment by creating regulatory uncertainty while yielding only modest energy savings.
He urged the committee to reject the bill.
“It is anti-wind, it is anti-business and it is anti-jobs,” Parker said.
Paul Williamson, director of the Maine Wind Industry Initiative, pointed out that manufacturing of wind power components was the fastest-growing manufacturing sector in the U.S. during the past 2 years.
Williamson presented the committee with a list of nearly 200 Maine companies that have a financial interest in either wind or ocean-based energy.
“It is putting a big ‘X’ over our ‘Open for Business’ sign,” said Williamson, referring to the sign that LePage placed on Interstate 95 just inside Maine’s southern border.
But Fletcher said he does not believe that eliminating the mandate that utilities add new renewable power annually will “kill jobs” or bring development of renewable energy to a halt. Instead, Fletcher said he believes the market will respond to rising consumer demand once the state starts allowing consumers to choose to “buy green.”
“It is time to give Maine ratepayers a break,” Fletcher said. “Let the capacity be built but let’s not expect Maine ratepayers” to foot the entire bill.