Chance for PUC to Undo its Plan to Ignore & Subvert Legislative Intent
Augusta, ME – Today the Conservation Law Foundation, the Natural Resources Council of Maine, and the Maine Association of Building Efficiency Professionals filed a motion with the Maine Public Utilities Commission (PUC) to “reconsider” its recent Order that would dramatically cut energy efficiency efforts, resulting in more than $1 billion in increased electricity costs for Mainers over the coming 5-10 years. Earlier this month, the PUC issued an Order setting a cap on investments in energy efficiency that was less than half the amount intended by the Legislature.
According to the filing, “Despite clearly established law and the overwhelming weight of evidence,” the PUC’s Order misinterprets and ignores the law’s mandate to realize “all . . . cost-effective, reliable and achievable” potential energy savings.
“Everyone—including the PUC!—agrees that the Legislature intended to increase investment in energy efficiency,” said Ben Tettlebaum, attorney with the Conservation Law Foundation. “The PUC claims its decision accomplishes this goal, but its own projections show this is simply not true.”
“The PUC made a baseless decision that will cost Mainers hundreds of millions of dollars, if not corrected,” said Dylan Voorhees, Clean Energy Director with the Natural Resources Council of Maine. “The PUC’s original Order goes out of its way to justify ignoring the Legislature’s clear intent.”
“The PUC’s original decision is an affront to the 126th Legislature and slights the clear intent of the original bill causing our members to doubt whether the state can be counted on as a reliable long term partner for Maine’s energy efficiency businesses,” said Bill Childs, President of the Maine Association of Building Efficiency Professionals. “Our members were on a trajectory of growth and increased employment as a result of what they thought was a more predictable commitment to energy savings programs: that the Omnibus Energy Bill and the stewardship of Efficiency Maine were insulated from political ebbs and tides.”
In their petition, the plaintiffs assert that, “The Legislature Intended the Statutory Cap to Include Revenue from Both Retail Electricity Supply Sales and Delivery Services.” And, “The Commission Ignores Omission of the Word ‘and’ by the Revisor of Statutes and Clearly Established Law Dealing with Scrivener’s Error.”
In a surprising and unfortunate development, on March 17, Maine’s PUC voted (2-1) to slash funding for energy efficiency programs that reduce electricity costs for Maine homes and businesses, despite legislative intent to the contrary. No one disputes the previous Legislature’s clear intent to cap set this limit at $60 million, but the PUC’s reading of the wording sets the cap at $22 million – below funding levels now planned for the coming fiscal year.
The question before the PUC involved implementation of the Omnibus Energy Bill passed by the Legislature in 2014. In 2013, a bipartisan Legislature approved an Omnibus Energy Bill, which was supposed to save ratepayers money by increasing support for energy efficiency as a way to further lower energy bills, and create a more rational and predictable process for funding energy efficiency. However the Commission voted to severely limit energy efficiency funding to a level that would be lower than the budget the PUC previously approved for Efficiency Maine for FY16.
A bipartisan group of current lawmakers have indicated their interest in honoring the omnibus bill intent by fixing the law, however the political pathway for this happening is still unclear.
Each dollar spent by Efficiency Maine to help save electricity yields five dollars in savings for consumers. The PUC decision would put a $22 million annual limit on efficiency spending, curtailing consumer savings year after year. (For reference, the efficiency budgets developed by the Trust to maximize consumer savings range from $32-$60 million/year.) According to Efficiency Maine, each year the cap remains in place will cost Maine ratepayers nearly $200 million in missed savings.
Although reduced funding for energy efficiency would have very broad impacts, the cuts would have especially devastating impacts on some specific groups, programs, and goals:
- Electricity costs will be higher for the state’s largest industrial companies: The drastic cap determined by the PUC would likely mean the end of funding for intensive programs to work with large customers on complex, multi-year efficiency upgrades. Over the past two years this program has yielded $31 million in savings.
- Heating efficiency programs: The cuts to funding for programs to save electricity for ratepayers would likely force Efficiency Maine to defund efficiency programs that save heating oil to compensate. These programs currently serve homes, businesses, and industry.
- Heat pumps: Support for heat pumps could be especially hard hit because these rebates were to be funded out of revenue now to be capped by the PUC decision.
- Meeting Maine’s contractual commitments to ISO-NE to reduce demand for power: Maine will find it increasingly difficult to fulfill its obligations to meet power needs through inexpensive energy efficiency, which were based on sufficient steady funding. That will leave ratepayers relying more heavily on more expensive generation.
- Introducing enormous uncertainty into energy efficiency markets: If left in place, the cap will mean Efficiency Maine must scale back programs, most of which were seeing record numbers of participating homes and businesses. But which ones and by how much? This kind of uncertainty has historically been an impediment to growing Maine’s clean energy sector and increasing efficiency jobs.
The two Commissioners based their decision on a twisted reading of the new statute, and ignored the entire body of testimony, evidence, and legal argument submitted by parties in the proceeding.
In addition, the decision went against a letter sent to the Commission by a bipartisan group of legislators who served on the Legislature’s energy committee when the Omnibus bill was enacted. The letter clarified the Legislature’s intent to increase efficiency funding above the status quo, subject to a cap of nearly $60 million per year.