On June 26, President Barack Obama delivered a compelling call to action on climate change. The president said that he will use the authority vested in the executive branch to reduce carbon pollution from existing power plants, to deny approval of the Keystone XL pipeline if it would “significantly” increase climate pollution, and take other actions to help avert a climate catastrophe. These steps will help restore the leadership role of the United States and spur other nations to act on what is most decidedly a global problem.
Fortunately, despite the opposition and another cursory veto by Gov. Paul LePage, the Maine Legislature worked in a bipartisan fashion to craft a comprehensive energy bill that addresses climate change and a cleaner energy future.
The bill — which received overwhelming support to override the governor’s veto — dramatically increases the state’s investment in our cleanest and lowest-cost energy resource: energy efficiency. It removes the arbitrary cap on funding for both electric and natural gas efficiency programs and instead directs the Public Utilities Commission to ensure that Maine’s electric and natural gas utilities procure all energy efficiency resources that cost less than energy supply. Over the next three years this is projected to save ratepayers $365 million more than under existing investment levels.
Efficiency Maine Trust’s budget will no longer be part of the state budget, and therefore no longer subject to the political whims of Augusta. Instead, efficiency budgets will be set by the trust and reviewed and approved by the PUC, just like every other state that operates efficiency programs and just as the commission does on a host of other utility expenditures.
The bill also lowers the carbon emissions cap for Maine consistent with the Regional Greenhouse Gas Initiative reforms adopted earlier this year to lock in significant progress and ensure that we continue reducing emissions in the future. The vast majority of the RGGI revenues will continue to be spent on energy efficiency programs — 50 percent will go toward electricity measures that reduce consumption at commercial and industrial facilities, and 35 percent will go toward reducing residential heating demand through efficiency and fuel switching.
Environment Northeast’s analysis of the impacts of RGGI investments found that energy efficiency and renewable energy return more than $5 to state economies for every $1 invested, or $4.26 more than spending $1 to plug budget gaps. ENE calculated that the governor’s proposed state raid of RGGI funds could have cost the state economy more than $94 million in lost growth over the next 10 years. Fortunately the funds were not taken.
Transmission rates are rising faster than any other component of electric rates and are projected to keep rising. ENE promoted, and the bill incorporates, investing in lower-cost energy efficiency, demand response and clean distributed generation before constructing new expensive transmission lines.
The new law expands the number of projects where these lower cost alternatives must be studied. An independent analysis of these alternatives is now required because utilities earn exorbitant returns on investment in new wires, but nothing on the cheaper alternatives. The PUC is also directed to advocate for the pursuit of least-cost transmission solutions in all relevant venues, such as the regional ISO-NE and the Federal Energy Regulatory Commission.
The bill also gives the PUC the authority to enter into additional natural gas contracts and expand gas pipeline capacity. Providing new energy sources to address our over-reliance on heating oil is a key challenge. Driven by the drop in gas prices, a large share of electric generating plants have shifted to natural gas, and when natural gas is used to both generate electricity and heat buildings, demand rises. On cold winter days, this causes electricity prices to spike. In the view of some, building more pipeline capacity is the solution. But expanding the natural gas system in Maine and New England will cost hundreds of millions.
Although ENE supported this bill for its many benefits, getting off of oil calls for a far greater array of solutions than simply pulling out the checkbook to pay for a huge pipeline infrastructure expansion. Market reforms are needed, and homeowners need access to other tools to lower energy costs and pursue clean energy options, such as taking advantage of the lower heating costs of a well insulated home.
New technologies that offer cleaner, lower-cost heating potential like high-efficient heat pumps need to be examined as a viable alternative. ENE hopes that the bipartisan spirit shown in advancing this legislation will carry forward to address these further challenges to come up with the best responses to our energy challenges.
In the midst of so much acrimony and turmoil in Augusta, Maine’s energy future — and its efforts to reduce damaging climate pollution — will be advanced in this carefully crafted bipartisan energy legislation.
Beth Nagusky is ENE Maine director. ENE is a non-profit organization that researches and advocates innovative policies that tackle our environmental challenges while promoting sustainable economies. ENE is at the forefront of efforts to combat global warming with solutions that promote clean energy, clean air and healthy forests.