Hundreds of Energy Jobs Also at Risk
NRCM news release
Augusta, ME —Businesses and energy experts gathered today to inform Mainers that a one-word typographical error in the omnibus energy law passed in 2013 will cost Maine energy consumers $250 million if not corrected by the Legislature or the Public Utilities Commission (PUC).
The missing word “and” in the law allowed the PUC to ignore the Legislature’s intent and drastically limit energy efficiency funding, leaving Efficiency Maine to dramatically curtail its efficiency programs in the near future. In addition to the missed energy savings, suddenly scores of energy efficiency businesses that had begun to gear up for expanded operations to serve homes and businesses now face uncertainty that could freeze job creation and lead to layoffs if not addressed.
“The omnibus energy bill put Maine on a path toward reducing energy bills as much as possible with growing investments in energy efficiency,” said Dylan Voorhees, Clean Energy Director at the Natural Resources Council of Maine. “This mistaken decision will send Maine backwards, with far higher energy bills, which will hurt everyone from individual households to the state’s largest employers. If this mistake is not fixed over the next decade, it could end up costing consumers nearly one billion dollars.”
“Efficiency Maine Trust’s efforts to reduce Maine’s electricity usage, particularly during peak periods, are the most effective tool we have to fight the growing cost of transmission infrastructure and generation capacity requirements, said Tim Schneider, Maine’s Public Advocate. “Ensuring they have the resources they need to continue this work will benefit all ratepayers.”
This summer, Efficiency Maine (EM) will begin developing its next Three-year Plan, including proposed budgets for its full range of programs for businesses and homes. If the PUC-imposed cap on funding remains in place, it would put efficiency funding roughly $40-80 million less than what was expected over the three years. (This is based on EM calculations of the amount of cost-effective efficiency available to minimize consumer bills, required by law.)
If not corrected before the Three-year Plan is approved, this would leave energy consumers paying about $250 million more in energy bills than they would under the scenario intended by the Legislature. By 2025, the net increase in energy bills could reach $1 billion if this mistaken cap stays in place.
“Maine people are really starting to understand the importance of reducing their home energy needs to protect themselves from fuel cost volatility and rising prices,” said Richard Burbank, President of Evergreen Home Performance. “My company has expanded to meet homeowner demand for insulation, air sealing and high efficiency heating that Efficiency Maine has helped spark. The number one barrier to expansion of my company of 23 people is the unpredictability in Augusta in terms of energy efficiency initiatives.”
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 meet 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.
“A core-part of our business is helping commercial customers save money on energy through energy-efficient systems, from lighting to HVAC through the prescriptive, custom and advanced buildings programs,” said Michael Chonko, director of mechanical engineering for SMRT Architects & Engineers. “Efficiency Maine programs provide customers with the technical and financial assistance and independent perspective that help them capture long-term energy savings. The huge cutback we’re now anticipating means fewer customers getting that help, and that means more inefficient equipment and higher bills.”
“Between the governor, Emera Maine, Efficiency Maine, and businesses across the state, Maine has become a leader in helping people lower heating bills with high-efficiency ductless heat pumps,” said Roger Willett, a representative from Mitsubishi Electric. “The heat pump program has already saved Maine families millions of dollars in fossil fuel usage, money that has a direct impact on the local economy. It has also created hundreds of well paying jobs for contractors and service companies. This cut would send a huge disruption through programs and scale back efforts to increase heat pumps just when momentum is growing.”
There are two immediate chances to correct the flawed cap on Efficiency Maine. The PUC could “reconsider” its decision if petitioned within 20 days of its decision, which several groups have indicated they plan to do. The Maine Legislature could also make the statute less ambiguous by passing legislation to simply put the missing “and” back.
In 2013, a bipartisan Legislature approved an Omnibus Energy Bill, which was supposed to increase funding for energy efficiency efforts for Maine’s businesses and residents, and create a more rational and predictable process for funding energy efficiency. Last week, the Public Utilities Commission voted 2-1 to permanently slash energy-efficiency funding, based on its flawed response to a one-word typographical error in the law which sets an upper limit on efficiency funding from ratepayers. No one disputes the previous Legislature’s clear intent to cap set this limit at $60 million, but the PUC reading of the wording sets the cap at $22 million – below funding levels now planned for the coming fiscal year.
Several 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.