A new law passed in 2022, LD 1959, requires Maine’s utilities to undergo a transparent “integrated grid planning” process for developing a reliable electric grid that supports the transition to clean energy at the lowest possible cost.
For the first time, these plans must be tied to Maine’s ambitious requirements to cut greenhouse gas emissions and the state’s sweeping “Maine Won’t Wait” Climate Action Plan. Extensive public input will be incorporated from experts and others, ending utilities’ past practice of conducting their planning behind closed doors.
The Natural Resources Council of Maine (NRCM) worked with the Office of the Public Advocate, lawmakers, and peer organizations to strengthen the provisions of LD 1959 to maximize the benefit for Maine residents, businesses, and communities. In this blog post, NRCM’s Climate & Clean Energy team answers some frequently asked questions about this landmark victory for climate action in Maine.
Why is grid planning important for climate action in Maine?
Requiring our utilities to conduct integrated grid planning is all about creating a climate-resilient future that works for all Mainers.
Maine’s pathway to meeting the climate challenge includes electrifying our homes, businesses, and transportation while building large amounts of new renewable energy sources like solar and offshore wind. This will require a once-in-a-century overhaul in how our electric grid operates.
We wouldn’t build houses or roads without a plan, and we shouldn’t undertake reimagining our grid without one, either. LD 1959 requires utilities to create plans for how they will help meet Maine’s legal requirements to reduce greenhouse gas emissions – 45% in 8 years, and 80% in less than 30 years – and the policies detailed in the “Maine Won’t Wait” Climate Action Plan. That includes key goals for electric heat pumps, electric cars and trucks, and many others.
By defining utility planning explicitly in the context of a state’s comprehensive climate plan, this new law puts Maine in a leading role among states.
How is this different from what happens now?
The new grid planning law for the first time holds utilities accountable for their responsibility to help Maine transition to a clean, affordable, and reliable electric grid quickly and cost effectively.
The regulatory and investment planning processes currently underway in Maine are ad hoc and fail to take a big-picture approach to the energy transition. Right now, utilities develop plans behind closed doors with little public input and no obligation to help meet Maine’s ambitious Climate Action Plan.
Under the new law, every five years utilities will develop a range of scenarios based on a portfolio of policies, practices, and investments needed to transition the electric sector, providing a framework to coordinate and guide the work done in rate cases and other dockets.
The planning work required in LD 1959 is especially critical now given the multiple, dynamic, and transformational pressures that we’re seeing on the electric distribution system, namely the rapid integration of Distributed Energy Resources (DERs), electric vehicles (EVs), and heat pumps, and the need to balance demand for electricity to meet supply from renewable energy resources.
LD 1959 provides a new statutory connection between utilities’ businesses and investments and Maine’s legal requirements, goals, and strategies. Since the Maine Climate Action Plan is due to be updated every four years, this requirement can also become stronger over time as the state’s climate action strategies evolve.
What current issues does integrated grid planning solve?
Several provisions in LD 1959 will directly address ongoing issues holding back Maine’s transition to clean energy.
- For example, utilities haven’t fully grappled with the changes in electricity demand that will come with adopting electric heat pumps, electric vehicles, or energy efficiency measures that are proven to reduce pollution and save Mainers money. The new requirement for utilities to include multiple planning scenarios, load forecasts, and projections for energy efficiency and distributed energy resource adoption will provide crucial data for avoiding costly grid upgrades that are paid for by electricity customers.
- Maine’s investor-owned utilities have also failed to interconnect new sources of clean energy, including local solar energy projects, in a timely way. LD 1959 requires a full analysis of the hosting capacity and congestion areas for various parts of the grid, which could avoid problems like this in the future.
- LD 1959 also requires an analysis of the “locational benefits of distributed energy resources.” These requirements will inform the important debates around the next iteration of Net Energy Billing policies, as well as future decisions about siting renewable projects in ways that minimize impacts to natural and working landscapes.
Will grid planning save ratepayers money?
Yes! There will be some costs associated with grid planning, but the costs are miniscule relative to the potential benefits that will be delivered to electricity customers.
The planning process required in LD 1959 could save Mainers tens, if not hundreds, of millions of dollars over time across the entire electric grid. Integrated grid planning is designed to build a modern grid in the most cost-effective way we can, including alternatives to traditional transmission and distribution infrastructure, distributed energy resources (like batteries, etc.), and load flexibility.
Two recent examples illustrate the cost savings that would come from requiring utilities to explore alternatives. In Boothbay and Brunswick/Topsham, utilities plan to use efficiency, batteries, and demand management, which will result in an estimated $18 million and $10 million in ratepayer benefits respectively. In contrast, during the legislative debate, the Public Utilities Commission estimated that the cost of grid planning would amount to approximately three cents per ratepayer per month.
What does grid planning have to do with utility accountability?
LD 1959 also includes essential provisions that strengthen accountability for utility performance, but the transparent integrated grid planning process required in this law is an important accountability measure in its own right.
Utilities, and the grid they manage, will play a critical role in enabling us to meet our climate and energy goals through electrification and clean energy. Up to this point there was no statutory connection between their businesses and investments and the legal requirements, goals, and strategies Maine has put forward to tackle climate change and the transition to low-cost renewable energy.
Last year, the Legislature took a step in the right direction by requiring the Public Utilities Commission (PUC) — the utilities’ regulator — to make decisions in line with Maine’s climate goals. LD 1959 is the logical next step in holding utilities accountable to play their part.
Is Maine the only state to do integrated grid planning?
No, although the specific requirements in LD 1959 are unique to Maine, more than a dozen states across the country employ some combination of integrated distribution planning, grid modernization, non-wires alternative evaluation, hosting capacity analysis, or other related requirements.
Has integrated grid planning been discussed before in Maine?
This kind of planning has been an energy policy priority for several years in Maine. Maine’s Climate Action Plan from December 2020 recommends initiating a power sector transformation process, including many of the same areas explicitly included in LD 1959, for example: Load management, interconnections, distributed energy resources, non-wires alternatives, and others.
In 2021, the Maine Utility/Regulatory Reform and Decarbonization Initiative (MURRDI) — which included input from environmental nonprofits including NRCM, renewable energy developers, electric utilities, consumer advocates, and other energy sector stakeholders — put forward its “crucial, overarching recommendation…that Maine should investigate, adopt, and implement a holistic, long-term, strategic grid planning process.”
And a 2022 IREC (Interstate Renewable Energy Council) report for the PUC on reforming interconnection rules recommended integrated distribution planning for both the cost savings and equity benefits.
Does the grid planning process take environmental justice, inclusion, and equity into account?
Yes. The grid planning process begins with open, inclusive, and transparent technical conferences and stakeholder workshops. Once utilities file their plans, they will be open to public review and comment. Further, the plans are required by law to assess environmental, equity, and environmental justice impacts. Many states require separate assessments of equity or environmental justice, but Maine is leading by incorporating this evaluation directly into utility planning itself.
Will the grid planning process affect the referendum to create a consumer-owned utility (COU)?
The questions of whether our investor-owned utilities are delivering the service that Maine people deserve and what kind of ownership model is best for Maine are critically important, and Maine people should have a chance to make those decisions at the ballot box.
Planning for a grid that will enable us to hit our climate and clean energy goals is important for utilities under any ownership model. If the COU referendum is placed on the ballot and is successful, the grid planning language will be extremely important for the transition for several reasons.
First, the assessments required in the planning process will serve as a baseline look at existing transmission and distribution assets — vital to determining fair market value in the event of a COU purchase. Second, grid plans will help ensure that our existing utilities are maintaining the investment levels we need over the course of a transition in ownership should that occur. In short, the planning process lets us look under the hood of our utilities, which could mean hundreds of millions in savings to the state of Maine in the event of a COU buy-out.
What happens next? When do we start planning our grid?
LD 1959 directs the PUC to launch the first grid planning proceeding on November 1, 2022. The process begins with technical conferences and stakeholder workshops, which will lay out the priorities, assumptions, goals, methods, and tools to be used by the utilities in developing plans for the parts of the grid they manage. Those conferences and workshops must be open and inclusive.
Then, utilities will have 18 months to file their plans with the PUC. After they do, the plans will be available for public comment for 60 days, where advocates and others can identify gaps, errors, or other deficiencies, which the PUC can order to be corrected. Then this plan and its contents can be used across every other proceeding at the PUC involving the utility to enact the parts of the plan that are in the public interest and help us meet our goals.
—by Jack Shapiro, NRCM Climate & Clean Energy Director