CONTRIBUTORS

How the omnibus energy bill will benefit Maine

Posted May 23, 2013, at 1:42 p.m.
Andrew E. Sturgeon
Contributed photo
Andrew E. Sturgeon

There’s no arguing Mainers are paying too much for energy — significantly more than elsewhere in the country. For some time, Gov. Paul LePage has been saying that he wants to lower electricity rates, promote the expansion of natural gas infrastructure, lower energy costs for businesses and consumers, and redirect resources toward lowering heating costs using new and expanded Efficiency Maine Trust programs.

There are seven ways in which the omnibus bill helps achieve these goals.

One: The expansion of natural gas infrastructure could reduce electric bills of Mainers by $100 million to $200 million per year after full implementation.

Two: The bill would help achieve nearly $30 million in immediate rate relief with a focus on business and jobs.

Three: The governor proposed adding “lowering energy costs” to the Public Utilities Commission’s mandated responsibilities and goals for the Efficiency Maine Trust, something this bill achieves.

Four: By using $3 million to $5 million per year from Regional Greenhouse Gas Initiative to reduce residential heating costs, this bill does exactly what the governor asks for.

Five: The bill allows natural gas distribution programs to go forward smoothly and facilitates an extension of Bangor Hydro’s heat pump pilot program.

Six: The bill directs the PUC to design a rate structure with the specific goal of providing maximum benefits to Maine’s economy.

Seven: By expanding efficiency programs, all electricity consumers achieve a net savings — amounting to $76 million last year.

Since the restructuring of Maine’s electricity market in 2000, the PUC has developed highly professional energy purchasing expertise, the same skills required for a smooth implementation of the omnibus bill. The PUC has evaluated bids and negotiated contracts worth hundreds of millions of dollars per year for the standard offer energy that most consumers purchase.

It also routinely negotiates capacity, energy and renewable energy certificate contracts in the range of tens of millions of dollars. Most recently, it conducted the ocean energy request for proposals and awarded a contract, still in final negotiation, worth almost $200 million, to Statoil. This is a highly competent agency with solid energy market expertise.

Maine relied on the PUC when it approved Central Maine Power’s $1.45 billion Maine Reliability Project. Surely the agency can also be relied upon to analyze pipeline capacity needs and purchase contracts that will directly lower Maine’s electricity rates.

During the Action Committee of 50’s recent forum at Husson University on April 30, Patrick Woodcock, director of the Governor’s Energy Office, suggested to attendees that the single most important challenge for Maine in positioning itself better for future growth is the elimination of current restrictions in the supply of natural gas. The same sentiment was also articulated by Tom Welch, the Public Utilities Commission chairman, at the forum and by ISO-New England in testimony before the Maine Legislature.

Opposition to the omnibus bill has come primarily from entities that may benefit from higher energy costs. The bill promises to lower costs and is aimed squarely at boosting Maine’s potential for economic stability and growth and its ability to retain existing jobs in Maine. The governor and Legislature should support this bill wholeheartedly.

Andrew Sturgeon is president of “ The Action Committee of 50,” a group of business and community leaders promoting economic development in the Bangor Region.

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