October 14, 2019
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Who benefits from this year’s changes in Maine energy laws?

Gabor Degre | BDN
Gabor Degre | BDN
Covanta Energy's West Enfield facility can be seen on Jan. 7. The facility burns biomass to generate electricity.

PORTLAND, Maine — In the shadows of hotly debated solar and biomass policy bills, Maine legislators made a number of tweaks to existing energy policies while rejecting some of the biggest proposed changes to the rules of the region’s electricity markets.

The laws passed include allowing utilities to help finance high-efficiency electric heat pumps for homeowners and an annual $3 million power bill rebate program for energy-intensive manufacturers, funded by proceeds from a regional greenhouse gas auction.

Two of those new laws change relationships between customers and utilities, with a bill to phase out price-controlled landline phone service in the state’s population centers and to allow electric utilities to help finance the purchase of efficient heat pumps for low-income customers.

In all, the Legislature’s Energy, Utilities and Technology Committee dispatched 21 bills this session, 10 of which made it into law. Those included amending the charter of the Rumford Water District, the Kennebec Sanitary Treatment District and adding a member to the board advising regulators on phone services for deaf and hearing-impaired Mainers.

Customer changes

The state’s utilities will be able to partner with outside companies to finance electric heat pumps for customers who could not otherwise afford buying the energy-saving devices outright. That allows a utility to build those costs into a customer’s bill, similar to how customers can buy cellphones gradually, with purchase costs treated as a monthly portion of each bill.

Emera Maine piloted such a program under an earlier law but was not allowed to expand the program to its entire customer base because regulators deemed it inappropriate competition with companies that make other heating systems.

The Maine Energy Marketers Association opposed an initial version of the bill for that reason, urging that the company not sell or install heat pumps directly.

While lawmakers declined to tinker with the 2000 restructuring of electricity markets, they did agree it was time to change the 2012 telephone deregulation rules that established which companies are required to provide landline service, called provider-of-last-resort service.

FairPoint provides that provider-of-last-resort service for much of the state, and it convinced lawmakers that the state’s most populous areas have sufficient competition to ensure customers won’t be left out and that their status as the only price-controlled phone service in those areas is unfair competition.

The law doesn’t mean FairPoint will drop landline service in those areas or cut off current landline customers, but it creates a path for FairPoint to gradually remove a batch of 22 of the state’s largest communities from its provider-of-last-resort coverage area, if the company meets certain performance metrics.

The law also allows FairPoint to apply to remove other communities later.

Alternate sources

The logging industry proved a favorite of lawmakers, gaining for the biomass generators they supply a $13.5 million state appropriation to fund above-market contracts. State regulators are to open a competitive auction for contracts under the new law that passed in the waning days of the session.

Proponents said it would provide relief to loggers struggling to find markets after a wave of paper mill closures. Opponents suggested the state aid was being invested merely as a gesture of hope that the troubled industries could find ways to reverse their sagging fortunes.

The relatively high-profile debate this session over that bill and its amendments demonstrated the political contours of energy policymaking this session and at least one series of alliances capable of avoiding a logjam in a divided government.

That wasn’t the same fate for other generators that sought special procurements, such as a bid by waste-to-energy facilities to get written into Maine’s renewable power purchasing requirements, aboard LD 273.

The bill was postponed indefinitely before the end of the session, leaving the biomass industry as the sole victor of the session for power generators. Lawmakers also approved a bill to study the economic benefits of the biomass industry to the state and the forest products supply chain.

Status quo

When it came to major restructuring, lawmakers declined two efforts to let sister companies of the state’s two major utilities invest in power generation, leaving the wall between those electric utility companies and and power generators unchanged.

A bill proposed by Gov. Paul LePage to subject such relationships to approval by the Maine Public Utilities Commission and a bill to clarify legal questions about utility affiliates investing in power generation both failed in committee.

Legal challenges surrounded an attempt by a sister company of Emera Maine to invest in wind power projects in its service territory, leaving that same area also shaky for affiliates of the state’s other investor-owned utility, Central Maine Power Co.

A challenge to Nova Scotia-based Emera’s now unwound investment in wind power twice led to challenges at Maine’s high court, where a decision is pending.

Lawmakers generally declined broader changes to the structure or rules of existing electricity markets, most notably turning down the compromise effort to alter how small-scale solar generators are paid for electricity they put back into the grid. The bill failed in a veto override vote.

A separate bill to create solar rebates for agricultural businesses also failed to clear committee.

Moving money around

Energy-intensive manufacturers also won new rebates against their energy costs, which could be matched by additional funds from the Efficiency Maine Trust for projects to increase efficiency.

The law calls for setting aside for those manufacturers $3 million of the state’s proceeds for the Regional Greenhouse Gas Initiative auction for carbon emission credits, which amounts to about 15 percent of those credits annually, based on past years.

The bill overcame a veto from LePage, who proposed an initial version of the bill to give 55 percent of annual Regional Greenhouse Gas Initiative funds back to business electricity customers.

For the rest of the annual auction funds, the bill calls for the trust to allocate half toward residential low-income programs and the other half to commercial and industrial programs for projects that reduce power consumption and costs.

Lawmakers also approved adding a new possible dimension to whether electricity ratepayers should help fund contracts for new natural gas pipeline capacity, allowing regulators also to consider contracts for natural gas storage after deciding the pipeline case.

 



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