Advocates want the rebate program expanded, but not everyone in the State House would agree.
by Tom Bell, MaineToday Media State House Writer
AUGUSTA – At the Formtek-Maine factory in Clinton, the orange hue from high-pressure sodium light bulbs has been replaced by the white light of 330 high-efficiency fluorescent tubes.
The new lights have improved employees’s morale and knocked $25,000 off the plant’s annual electricity bill, enabling Formtek-Maine to stay competitive with companies in states where electricity costs less, says plant manager Joel Selwood.
“With so much manufacturing going offshore, you have to be lean and mean,” he said.
Formtek-Maine is one of more than 3,000 businesses that have received rebates from Efficiency Maine for energy-saving improvements since the Legislature created the agency nine years ago.
Many of those companies are now joining environmental groups to urge lawmakers to boost funding for the program over the next two years, from $28 million to $52 million. That’s the portion of Efficiency Maine’s budget that is supported by a surcharge on electricity bills for nearly all ratepayers — the primary source of funding for the program.
Efficiency Maine administers all of the state’s energy efficiency programs that aren’t related to transportation. While it spends more than half of its money helping businesses, it also helps homeowners by offering rebates for lighting and energy-efficient appliances and furnaces. Most Mainers know it as the program that provides rebates for compact fluorescent light bulbs.
The surcharge to fund the program now adds 75 cents to the monthly electricity bill of the average household. The proposed increase would raise the average monthly surcharge to $1.13 next year and $1.82 in 2013.
Efficiency Maine’s directors say the increase would enable the agency to provide $840 million worth of energy savings for consumers over the next three years.
Maine’s Public Utilities Commission has approved the board’s three-year plan, but it can’t increase the surcharge without the Legislature’s approval. Although money comes from ratepayers, the funding needs approval as part of the state budget.
That approval appears uncertain.
Gov. Paul LePage and the Republican majority on the Legislature’s Energy, Utilities and Technology Committee oppose the increase, saying Maine’s electricity rates are high enough already.
The governor understands the value of energy efficiency, but people simply can’t afford higher rates, said Ken Fletcher, who heads the state Office of Energy Independence and Security.
He said the savings from energy-efficiency investments are often so substantial that businesses can make the investments without government subsidies.
“It’s just a question of how much people can afford at any one point to subsidize these programs,” he said. “If people want to make energy-efficiency investments themselves, they are free to do that.”>/p>
He noted that homeowners have the Property Assessed Clean Energy program, a new, federally funded loan program administered by Efficiency Maine that lets qualified applicants borrow as much as $15,000 at low interest for energy-efficiency upgrades such as new heating systems.
For small businesses, Efficiency Maine offers low-interest loans of as much as $35,000.
Sen. Michael Thibodeau, R-Winterport, who co-chairs the Energy, Utilities and Technology Committee, said Efficiency Maine’s programs are a good deal for those who use them, but not for the majority of businesses and households, which fund it but don’t receive benefits.
“Now is not a good time to be raising rates,” said Thibodeau, who considers a rate increase the same thing as a tax increase.
Efficiency Maine’s supporters say homeowners could offset the increase in the surcharge by replacing just one 100-watt incandescent bulb with a compact fluorescent bulb.
They also say that the large upfront costs of efficiency improvements pose an obstacle to investment, and that the rebates let businesses and households move forward on projects they otherwise couldn’t afford.
The rebates typically amount to 40 percent to 50 percent of the extra cost it takes to buy the most energy-efficient equipment for a project, rather than cheaper, standard equipment.
Formtek-Maine, for example, spent $55,000 of its own money for its lighting project. In addition, it used $13,000 from Efficiency Maine and $13,000 from a separate federal program.
Selwood, the plant’s manager, said the rebates and lower electricity bills saved the company so much money that it recouped its investment in just two years.
He said the managers noticed that replacing the old “dungeon-like” orange lights improved workers’s morale, and appeared to increase their productivity.
Formtek-Maine, which employs 72 people, builds machinery that’s used to fabricate metal products such as refrigerator panels and car parts.
Businesses that support the rebate program, including The Jackson Laboratory in Bar Harbor, Lyman Morse Boatbuilding in Thomaston and East Brown Cow Management in Portland, are urging members of the Appropriations Committee to approve the increase in the surcharge.
On Wednesday, the Natural Resources Council of Maine submitted a letter to the committee, endorsed by 250 Maine businesses that support the increase.
Richard Parkhurst, a developer who is using Efficiency Maine rebates to install energy-efficient lighting in an old building he is rehabilitating on Water Street in Augusta, said the energy savings will enable him to invest in another project.
While the Efficiency Maine program doesn’t lower electricity rates, he said, it lowers overall consumption and energy spending, making more money available elsewhere in the Maine economy.
Everyone benefits, he said.
While the state could build more power plants and transmission lines to keep up with increasing demand for electricity, it would be a lot cheaper, he said, to invest in projects that lower demand.
“Efficiency just saves everyone money,” he said. “I’d rather see my money spent on greater efficiency than on a nuclear power plant.”