In what’s shaping up to be one more clash over state energy policy, Maine Governor Paul LePage has proposed the elimination of both net metering and Maine’s renewable portfolio standard. Both policies are regarded as essential by renewable energy advocates but too expensive by the executive branch.
Legislators already are doing battle with the Republican governor over how to fix a typo in a 2013 law that now threatens to gut the Efficiency Maine program. The new proposals, yet to be scheduled for a public hearing, will add fuel to the fire.
Under current rules, Maine residents with small solar or wind systems are paid the full retail rate for excess electricity they sell to the grid. That would end, as would requirements that Maine electric utilities purchase an increasing amount of their electricity from renewable sources.
In both cases, the governor’s energy office says changes are intended to simplify existing law and make electricity more affordable for both residential and industrial customers.
Renewable energy advocates are outraged.
Net metering is a “regressive tax”
Echoing arguments made by any number of electric utilities, the governor’s energy office called current net-metering rules “regressive” and said they amount to unfair subsidies for those who can afford to install photovoltaic (PV) systems.
“It’s a regressive tax that’s disproportionately placed on low-income Mainers, and we have a lot of low-income Mainers,” said Lisa Smith, senior planner in the energy office. “In Maine, someone who has a solar panel who applies for net metering not only gets credited the full retail value of the electricity, they’re not paying their fair share of grid maintenance because they’re not only being credited for the supply, they’re also being credited the [transmission and distribution] portion of the bill.
“They’re getting everything for free and someone who doesn’t have a solar panel is paying for that,” she continued. “They’re paying for their own and they’re paying for the folks who have solar panels.”
Because there are only a couple of thousand net-metered customers in the state now, she said, the costs are not significant, adding, “It has the potential to become quite significant.”
Recently, a study conducted for the Maine Public Utilities Commission concluded the actual value of electricity generated by PV customers is double what net-metering now pays. And the latest news was greeted with “disbelief” by the co-founder of a Maine renewables company.
“We are rubbing our eyes in disbelief at the governor’s new energy bills,” Phil Coupe, co-founder of ReVision Energy, told in an article published on May 13.
“They will take Maine’s energy policy back to the Stone Age,” Coupe said of the new proposals.
Portfolio standard is an “artificial subsidy”
Maine has a two-tier renewable portfolio standard that separates renewable energy sources into two classes, Smith explained. Class 1 includes energy projects that existed prior to 2005 or 2006, such as combined-heat-and-power plants and waste-to-energy facilities. Class 2 includes solar, wind, small hydro, and biomass.
Maine utilities are now required to purchase an increasing amount of the electricity they sell from Class 2 sources, rising to 10% by 2017.
“What has actually happened in Maine is that over 50% of our electricity is already generated from renewable sources,” Smith said. “We have one of the cleanest, the second cleanest, [mix] in the nation as far as electricity generation already.”
The real driver of renewable investment in the state, she said, is the demand from southern New England, where the prices for renewable energy certificates (or RECs) are higher.
“A wind project in Maine,” she said, “they’re selling their RECs in Massachusetts or Connecticut. They’re not even using our market. We have this artificial, so to speak, subsidy that is not achieving the goal of driving renewable energy investment in Maine.”
Smith said the renewable portfolio standard costs Maine ratepayers millions of dollars a year.
Lower regulatory barriers for nuclear plants
Also on the energy front: The governor recently submitted legislation that would eliminate the requirement for voter approval for any nuclear plant with a generating capacity of less than 500 megawatts.
Maine hasn’t had a nuclear power plant since Maine Yankee in Wiscasset closed in 1996. There are still some 550 tons of spent nuclear fuel from the 900 MW plant stored on site.
The new proposal hasn’t had a hearing to date, and Smith said she was unaware of any specific plans for bringing a new reactor into the state.
“I’m personally not aware of it,” she said. “A couple of these proposals were put in to just start a discussion and try to eliminate some outdated language. We actually had language in our statute that said nuclear was bad, or something along those lines. So there were a couple of proposals to look into this issue again. I’m not aware of anything on the horizon.”
LePage is actively working to increase the availability of natural gas in the state as a way of bringing down energy costs and making the state more attractive to new industry. Lower costs, not the source of the electricity, is key, Smith said.
“The governor is completely agnostic as to the source of the energy,” she said. “He just wants the best deal and he does not want the electricity price hikes we’ve seen. We have large industrial customers who won’t come to the state because of the volatile electricity prices.”
But it’s a blow to advocates
Maine is the only state in New England without incentives of its own for solar power, and installers and other renewable advocates were dismayed by the latest proposals from the governor.
Vaughan Woodruff of Insource Renewables told The Press Herald that the legislative proposals will discourage customers because they will create uncertainty about the future of net metering, a key component in weighing the economics of a purchase.
Coupe also pointed to the contribution renewable energy already is making to the state — a $2.6 annual contribution to the state’s economy every year and the creation of 12,000 jobs, according to a study funded by the Maine Technology Institute, the newspaper said.
He called LePage’s proposals “mind boggling.”
In an email, Coup raised another point: Maine’s economy increasingly relies on tourism, yet the state is the “worst air polluter in the region.”
“Maine already has the lowest electricity rates in all of New England, but we also have the highest per capita carbon pollution in the region due to our over-reliance on oil, propane, natural gas, and gasoline,” Coupe wrote. “As our once-vaunted pulp and paper continues to decline due to global market factors and the advent of the digital (not because of energy costs), tourism has gradually become Maine’s strongest economic driver. Our tourism industry is predicated on Maine’s pristine environmental reputation — in reality we are the worst air polluters in the region.”
He said ocean acidification and carbon pollution is already taking its toll on Maine’s lobstering and clamming industries as well as the $7 billion tourism industry.
“Gov. LePage’s energy proposals will devastate Maine’s renewable energy and clean-tech industries and over the long term will harm our vital marine fisheries and tourism industries,” Coupe added. “It is the height of insanity.”
Given that the Legislature will be in session another month, it’s unclear how far these latest initiatives will get this year. But, Smith pointed out, they can always be put back on next year’s session without being formally reintroduced.