December 07, 2019
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State law blocks northern Maine businesses from energy cost reduction aid

Troy R. Bennett | BDN
Troy R. Bennett | BDN
The sun sets on the State House in Augusta in this June 2015 file photo.

PORTLAND, Maine — Aroostook and Washington counties will see no money from a new $3 million program to reduce power rates for “energy intensive” manufacturers, after regulators ruled the program only includes parts of the state that pay a premium on electricity to help reduce carbon emissions.

Maine regulators issued an order Wednesday finding the program created by the last Legislature would remain limited to the regional ISO-New England grid, despite a bid from McCain Foods for businesses connected to the northern Maine electric grid to have access to the funds.

“Given that the intent of the act is to reduce electricity rates for Maine businesses that suffer from high energy costs, there is no reason why McCain and other good northern Maine manufacturing businesses who create good Maine jobs should be shut out in the cold from financial relief just because they happen to be located in Aroostook County rather than Cumberland or York County,” Sarah Tracy, an attorney for McCain, wrote in comments to regulators in May.

Patrick Woodcock, head of the Governor’s Energy Office and a board member of the Efficiency Maine Trust, wrote in an email that the decision is a “difficult policy call,” noting that portions of proceeds from a regional cap-and-trade auction do make their way to northern Maine through other programs.

“At Efficiency Maine Trust, we do disburse funds that are generated by the Regional Greenhouse Gas Initiative to customers in northern Maine although the customers are not effectively subject to the cap-and-trade costs,” Woodcock said.

The Regional Greenhouse Gas Initiative has power generators in nine states bid on carbon emissions credits, with proceeds distributed back to states mostly to help pay for energy efficiency programs. The cost paid by generators is reflected in customers’ power bills.

In their order, regulators wrote that the language of the law is clear, with the proceeds intended to help reduce the premium energy-intensive manufacturers pay related to the cap-and-trade system.

“An entity’s location in ISO New England is a requirement and cannot be waived,” the commission’s order states.

The vast majority of customers connected to the ISO-New England grid are part of Emera Maine’s Bangor Hydro Electric district and Central Maine Power Co.’s service area.

Rep. Martin Grohman, a member of the Legislature’s energy committee, wrote in a letter to regulators that lawmakers did intend to exclude electricity customers connected to the Northern Maine Independent System Administrator’s power grid.

That Northern Maine Independent System Administrator grid serves most of Aroostook and Washington counties, including the two mill towns of Baileyville and Madawaska. The mill in Baileyville, however, is connected directly to lines operated by Canadian generator New Brunswick Power, according to spokesman Scott Beal.

Democratic Rep. Roland Danny Martin of Sinclair wrote in an email that the exclusion was not made clear to him during legislative deliberations. Martin represents Madawaska, home to Twin Rivers Paper Co., as part of House District 150.

Martin, who voted to override Gov. Paul LePage’s veto of the bill, was the only lawmaker to respond by 6 p.m. Thursday to an email inquiry sent to Aroostook and Washington county House representatives. A spokesman for Twin Rivers Paper declined to comment.

The final bill that passed was amended from a version proposed by LePage, who lambasted changes to his bill that dramatically boosted the amount of cap-and-trade funds that would go back to businesses, up to 55 percent for “business ratepayers.”

“The bill is complex, confusing, and worst of all does virtually nothing to reduce the costs of carbon fees. It suffers the same fate that afflicts most energy bills in Maine. Environmental groups try to spend more money and lobbyists carve out provisions for the biggest businesses,” LePage wrote. “A compromise is made between these interests, and the bill sails through the Legislature.”

The amended bill cleared his veto, putting into law the $3 million annual fund set aside for rebates through 2019 to “energy intensive manufacturers,” as defined by the U.S. Energy Information Administration or by the PUC. If recipients spend their proceeds on energy efficiency measures, they can get another $1 for every $3 they spend from the Efficiency Maine Trust.

The law calls for regulators to distribute that money based on customers’ electricity use.

Derek Fox, chief financial officer of the Lewiston-based Elmet Technologies, wrote to regulators that the rebate program could help it compete.

“Cost competitiveness with other regions of the United States as well as other countries across the globe is critical to our survival,” Fox wrote.

 



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