PORTLAND, Maine — Gov. Paul LePage submitted a bill to lawmakers Wednesday that would allow forest product manufacturers to land special long-term energy contracts, as long as they maintain certain employment levels.
LD 1632, introduced by Sen. James Dill, D-Old Town, expands an existing program created to encourage development of small renewable energy projects.
The bill would add incentives for newly constructed combined heat and power systems, such as biomass generators that also channel the waste heat into some other process.
It requires that each project “demonstrate growth in a reasonably timely manner” of three manufacturing jobs per megawatt of installed generation capacity. To receive the program benefits for a 5-megawatt system, a company would need to hire at least 15 employees.
Specifically, the bill would open long-term contracts or renewable energy credits to companies generating power “from combined heat and power, including biomass energy from manufacturing residues.”
The bill reflects a continued interest from lawmakers and the governor in using the authority of the Maine Public Utilities Commission to carry out economic development programs, such as the $13.4 million bailout of four biomass plants passed last year.
Commissioner Carlisle McLean, a former legal adviser to LePage, said in late April that the biomass bailout’s “requirements on economic development challenged the commission’s traditional jurisdictional boundaries.”
The bill proposed Wednesday calls for the commission to “develop and administer a system to register and track the development of manufacturing jobs energy projects” and present a report on that system to lawmakers every two years.
Unlike the renewable power pilot program that helped start a biomass plant at Robbins Lumber, the governor’s proposal would not set a fixed cap on the price that such combined heat and power systems might seek, leaving that up to regulators. The renewable power pilot program requires contracts at 10 cents per kilowatt-hour or less.
Instead of a hard cap, the governor’s proposal calls for the Maine Public Utilities Commission to determine whether the price is in the best interest of ratepayers, “considering market conditions and the purposes of the manufacturing jobs energy program.”
It also requires the cost of the contract not to exceed the cost of the project, plus a “reasonable rate of return on investment,” which would be determined by regulators.
The proposal limits contracts to individual projects of 10 megawatts or smaller, with an overall cap of 30 megawatts of new capacity, put in service after Jan. 1, 2018.
The bill would allow regulators to revoke a long-term contract or other renewable energy credit benefits if manufacturing jobs are cut because of the “final closure of operations at the primary location” of a company qualified for the program.