AUGUSTA, Maine — The Democratic chairmen of the Legislature’s energy committee Tuesday said they were encouraged by Gov. Paul LePage’s proposal to use carbon auction revenues to directly lower businesses’ electricity costs and help homeowners abandon costly oil heating systems, rather than invest all proceeds in energy efficiency initiatives.
The Democratic chairmen of Legislature’s Energy, Utilities and Technology Committee — Sen. John Cleveland of Auburn and Rep. Barry Hobbins of Saco — said they were eager to start work on the proposal, though one Democratic member of the panel pushed for assurances that the LePage administration doesn’t plan to abandon energy efficiency programs as a policy priority.
LePage’s administration announced last week it would sign on to a regional plan to lower carbon emissions from power plants if lawmakers allowed the state to use revenue it gains from regular carbon auctions to directly lower electric rates for businesses rather than commit all the funds to programs administered by Efficiency Maine.
Patrick Woodcock, who directs LePage’s energy office, said the administration also wants to use a portion of the revenues to set up a rebate program that helps Maine residents convert their oil heating systems to more efficient and cheaper wood pellet, natural gas and propane systems.
“The barrier we see when we talk to constituents is that they do not have the capital to invest in these new systems,” Woodcock said. “What we really want to provide is as much flexibility and options on the residential side so people can target what is the biggest chunk of their energy costs, which is their heating bill.”
The offer from LePage came on the heels of an agreement among Maine and the eight other northeastern states that participate in the Regional Greenhouse Gas Initiative, or RGGI, to lower the cap on carbon emissions from power-generating facilities by 45 percent between 2014 and 2017, to 91 million tons annually from the current level of 165 million tons. Maine’s portion of the carbon emissions allowance is 3.6 percent.
Maine has been a member of RGGI since the initiative’s start in 2005. While LePage hasn’t embraced the regional cooperative, Maine remains a member as long as other states in the region continue to participate.
The state has traditionally invested the revenue from quarterly carbon auctions held through RGGI — about $4.5 million annually in recent years — in energy efficiency initiatives administered through the Efficiency Maine Trust. Woodcock told the Bangor Daily News last week that the amount of RGGI revenue Maine receives is expected to double as a result of the lower emissions cap.
In addition to reducing business electricity rates and setting up a heating rebate program, the LePage administration is proposing to eliminate the systems benefit charge from all businesses’ electric bills. That would mean a $5 million loss for the Efficiency Maine Trust, whose primary funding sources are RGGI auction revenues and the systems benefit charge paid as part of business and residential electric bills.
Rep. Diane Russell, D-Portland, warned Woodcock against prioritizing programs to help residents convert to natural gas heat — which isn’t available in all parts of Maine — at the expense of energy efficiency.
“There are huge swaths of the state where there’s not even an opportunity to fuel-switch,” she said. “As we’re looking at the next two to three months of a harsh winter, what are we going to do for some of those folks across the state? Their only option is energy efficiency.”
“We clearly still have a lot of opportunity to make energy efficiency investments,” Woodcock said. “Does that preclude people from making other investments? Absolutely not.”
Cleveland and Hobbins, the energy panel’s co-chairmen, called the LePage administration proposal to reallocate RGGI funds encouraging.
“I think it is important that we look at the costs of energy of individual homeowners,” Cleveland said. “I think we would do a tremendous amount for the economy if we can reduce those costs.”