November 18, 2017
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Energy prices aren’t all bad news, so why is the governor so critical of Maine?

By The BDN Editorial Board
BDN File | BDN
BDN File | BDN
Peter Vigue, CEO Cianbro

Gov. Paul LePage has criticized Maine’s high energy prices since before his election to the Blaine House. He blames mill closures on the high cost of energy even when mill owners cite other factors for shutdowns and bankruptcies.

This negativity is hurting Maine, says Peter Vigue, chairman of Cianbro, a construction company. Perspective matters, he says. He’s right.

Maine’s electricity prices are above the national average. But Maine has the lowest electricity prices in New England. Which information would you emphasize if you want to attract business and investment?

For Vigue, the answer is simple: the positive message.

“We need to focus on promoting and sending out that we have the lowest energy costs in all of New England,” Vigue recently told the BDN. “That’s a pretty positive statement, I think.”

The director of the Governor’s Energy Office, Patrick Woodcock, countered that Maine doesn’t just compete with New England but with the rest of the country and the world. So, the state’s energy prices are a hindrance.

Both are right, but Vigue’s suggestion that the state tout its advantages — where it has them — is a constructive one.

At the same time, of course, the state’s leadership should be working to ease the disadvantages.

LePage has essentially offered two ideas to lower energy costs. One is to remove the 100-megawatt cap on renewable energy projects, which he says will allow less expensive hydroelectricity to be imported from Canada, especially Quebec. A new transmission line from Quebec to New Hampshire, where it would connect to the New England power grid, is moving through the long regulatory process. It is unclear whether the project would lower energy costs in New Hampshire and the rest of New England.

The second is to increase regional pipeline capacity for natural gas, the primary source of New England’s electricity generation and a growing source of heating fuel for homes and businesses. As part of a major energy bill in 2013, lawmakers, at the behest of LePage, gave the Public Utilities Commission authority to charge electricity ratepayers up to $75 million per year to buy capacity in new pipelines to encourage their construction. In a 2014 report, PUC staff said the benefits of such capacity purchases were unlikely to outweigh the costs.

Legislation passed last month could add to the ratepayers’ commitment by having them also cover the cost of natural gas storage facilities, though the total storage and pipeline capacity payments wouldn’t exceed $75 million per year.

It’s not clear, though, that the natural gas-centered strategy will bear fruit because of simple economics. The company behind a pipeline meant to bring more natural gas from Pennsylvania to New England pulled the plug on its project last month, saying it was unable to secure needed contracts from gas-fired power plants.

LePage also signed into law a plan to have the PUC sign long-term contracts to buy electricity from biomass plants at above market rates. Even with more than $13 million in taxpayer subsidies, the owner of one of the facilities says it is likely to close. The bill was sold as a way to save logging jobs.

Meanwhile, LePage has thwarted renewable energy proposals. Lawmakers last week failed to override a LePage veto of a bill designed to spur the development of increased solar energy capacity in the state. The European company behind a major offshore wind project scrapped its Maine plans after lawmakers changed the bidding process several years ago. LePage also submitted a bill to reduce funding for energy efficiency projects, despite the evidence that such investments actually lower energy costs by reducing energy use. Past projects funded by Efficiency Maine have saved six to eight times the amount of money invested.

In essence, LePage has staked his hopes for lower energy costs on natural gas and hydropower strategies that are far from certain to come to fruition and deliver any benefit to Maine ratepayers. At the same time, he has actively worked to undermine renewable energy investments with likely benefits today and down the road in the form of jobs, cleaner electricity generation and lower costs.

“What good does it do to talk about things … in such a way that they just tear the state down and misrepresent the real facts?” Vigue asked.

The answer, of course, is that it doesn’t do any good, especially in the absence of a realistic plan to solve problems, such as lowering energy costs.


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