by Sue Jones, NRCM energy project director
On behalf of the Natural Resources Council of Maine (Council), thank you for the opportunity to submit comments on LD 1312, the Draft Report and Recommendations (Report) of the Public Utilities Commission (PUC). In general, the Council expresses support for the Report, which helps provide a menu of options for the Legislature to consider as it reviews mechanisms for increasing renewable energy in Maine.
The Council strongly believes that renewable generation can play a larger role in Maine’s energy picture, in ensuring energy security for all Mainers, in stabilizing electricity prices, and in securing our electricity future. We therefore strongly support the State’s promotion and support for increasing renewable power options and generation in Maine. As cited in Energy for Maine’s Future, a report co-released last September by the Council, Mainewatch and the Maine Center for Economic Policy, Maine should support the generation of an increasing amount of clean renewable energy to help displace power from dirtier fossil-powered sources, and ensure that Maine people have additional choices in purchasing green power.
1. Improve Discussion of SBC Support for Clean Energy: We believe the Report’s description and recommendations associated with a systems benefit charge (SBC) for new renewable energy could be further analyzed and elaborated. At present, the Report addresses the SBC twice: once on page 55 as a source of funds for an auction and/or purchase of a pre-established amount of energy from identified sources; and again on page 61 as a possible source of funds for customer rebates and other initiatives. We believe these should be consolidated within one recommendation, and described – as done in other states – as a single source of funds that would equip Maine with a variety of tools for promoting renewable energy. Massachusetts, for example, is using such funds for a broad range of investments, ranging from a community wind power initiative to a solar schools program to pre-application support to developers. We believe the PUC should recommend the creation of one SBC-funded Clean Energy Fund, which would be utilized in a broad range of ways (perhaps established through rulemaking and/or with input from an advisory committee) to help remove market barriers, foster renewable energy development, and secure installed capacity in the most appropriate way possible.
The Report recommends two levels of SBC support to promote renewable power generation: 0.7 mills per kWh on all kWh sales on page 55, and 0.1 mills per kWh on page 61. Both of these levels are too low to support Maine’s need for emerging new generation facilities and programs. We urge the PUC to increase its SBC funding recommendation to a reasonable 1 mill per kWh on all kWh sales in Maine, which would produce approximately $11 million to support a Clean Energy Fund.
As for the proposed eligible projects of Clean Energy Funding, we do not support inclusion of “small hydroelectric” as one of the qualifying sources in the “other renewables” category for a SBC and/or RPS. Other states generally do not include small hydroelectric within the tier of sources defined generally as “new and emerging” renewables. As noted on page 28 of the Report, “no new [hydropower] facilities are likely to be built,” and small hydropower facilities are having difficulty remaining economic. Thus, is unnecessary to include small hydropower in the pool of sources that would be eligible for public funding.
In addition, we encourage the PUC to further discuss the benefits of Clean Energy Funding as currently utilized in over a dozen states in the U.S. This analysis would include the cost paybacks of promoting new renewable projects and incentives, and a fuller accounting of the benefits to the environment, energy security, reliability and independence. In this context, and as example of where the PUC could specifically further elaborate on the benefits of a particular type of new renewable project, the PUC should explore the recent technical work, feasibility studies, and experience conducted by Ascendant Corporation (solar company located in Owl’s Head) and other small-scale renewable power companies in Maine that show Maine’s strong potential for future development.
2. Require Environmental Performance Standards for Renewable Energy: The Council urges the PUC to recommend that environmental performance standards be established for energy sources in order to qualify for public support (either through and RPS or SBC mechanism). We are particularly concerned that hydropower and biomass facilities qualify without any screening evaluation for inclusion in the current RPS or in State purchases of “green power.” For example, we do not believe that a biomass facility that burns municipal waste or violates environmental standards should qualify, nor should hydropower facilities that violate clean water standards or cause fish kills.
To further illustrate, we urge the PUC to review DEP’s Administrative Consent Agreement dated October 2, 2003 for Borelex Athens Energy, Inc. and Borelex Fort Fairfield, Inc., as well as enforcement actions taken by DEP against the Benton Falls Dam in 1999 for significant fish kills. In the same fashion that the PUC recommends a cost-capping mechanism for an RPS as a way to cap consumer cost exposure, we believe that the PUC should recommend environmental performance standards that ensure that consumers are not subsidizing facilities that are violating Maine’s environmental laws or failing to take necessary actions to mitigate harm. This is not a novel suggestion. As the Report indicates, the RPSes in some states have emission requirements for municipal solid waste (MSW) plants, limiting eligibility.
We believe there are fairly simple criteria that Maine could use to screen both hydropower and biomass facilities to determine whether they should qualify for meeting an RPS or other form of public support. For hydropower, we believe the standards of the Low Impact Hydropower Institute are very reasonable and would make an excellent screen for Maine hydropower facilities to qualify for inclusion in the RPS or in state green power purchases. We also believe that the vast majority of Maine hydro facilities would meet these criteria. More information about these criteria is available directly from the organization.
Concerning biomass facilities to be included in the RPS, we believe the Union of Concerned Scientists (UCS) proposed an excellent set of criteria during the last legislative session in their comments on the original LD 1312. They stated that in order to qualify, biomass facilities should burn only clean, renewable fuels such as wood and wood waste that are harvested in a sustainable manner. Qualifying biomass facilities should not burn non-renewable fuels such as tires or construction debris. In addition, the Council believes that qualifying biomass facilities should meet strict standards for emission controls and be in compliance with all applicable state and federal environmental laws and regulations.
Concerning municipal solid waste combustion, we also agree with UCS that incinerators should not be included in the RPS or eligible for other “renewable” energy funding support.
3. Ensure that Any Public Support is Justified. The Council believes that the PUC should require that entities that want to be included within an RPS or be eligible for SBC funding provide sufficient information to demonstrate their need for financial support. The PUC notes that grid-scale hydropower currently is among the least costly forms of electricity generation. Thus, large hydro does not need public support and should not receive it. Likewise, sources with existing Qualifying Facility contracts should not be eligible for further public support. We are concerned that biomass facilities (as well as MSW facilities) did not provide the PUC with data that may have been necessary to determine the level of support that some of these facilities believe they would need in order to maintain economic viability. Further, we are also extremely concerned with the Report’s recommendation that as much as $19 million in cost exposure annually is being considered to support 200 jobs and at facilities that pay $2.6 million in local taxes. We believe the Report should make clear that this would amount to nearly $100,000/year/job in public funding support. This is an unacceptable subsidy, which we believe cannot be justified when weighed against other possible economic development investments.
We also note that the national energy legislation currently being considered by the U.S. Congress contains a production tax credit that would provide substantial federal financial support to Maine’s biomass facilities. Until Congress resolves that legislation, it would be premature for Maine to adopt a financial support strategy for existing biomass facilities. And if such a measure were adopted at the federal level, then it would be unnecessary and unjustified for the Maine State Legislature to revise our RPS in a fashion that provides additional financial resources to Maine’s biomass facilities.
4. Further develop the Report’s discussion of and urge additional support for wind power development in Maine. Developers of wind power have been actively exploring new sites for potential development in Maine. We expect two wind farm permit applications to be filed by the end of this year with the State. Wind power’s potential for development in Maine is great, yet there are significant barriers to its ultimate success unless the State undertakes a focused strategy to remove regulatory barriers and to potentially increase financial support. The Council encourages the PUC to support the development of wind power, appropriately sited. We urge the State to enact a comprehensive strategy that looks at all issues confronting the wind industry in Maine which includes appropriate and consistent siting criteria in both LURC and DEP jurisdictions, and appropriate support if needed and demonstrated by wind power developers. As it is likely that wind projects will be proposed for sites in high altitude, high-value areas that are targeted for conservation, it is in the best interests of the State to craft siting guidelines that will give predictability to developers and conservationists as to appropriate sites for development.
5. Define the fuels that qualify as “biomass”, and exclude sludge and peat from qualifying as eligible biomass fuels. As the Report states, Maine law does not define biomass or its fuels but the PUC interprets the term to include the burning of landfill gas, sludge and peat (pages 20, 38, and 39). Sludge and peat should be explicitly excluded from a new definition of biomass because they cause serious environmental impacts when burned. Even though landfill gas facilities require the combustion of natural gas — a fossil fuel — to flare the waste methane to generate energy, landfill gas should be included as an eligible biomass fuel because flaring methane is better for the environment than the alternative of allowing CO2 to be emitted from otherwise decomposing waste.
6. Urge adoption of clear public policy that supports additional use and in-state generation of renewable power in Maine. As was mentioned in the Report, the State of Maine needs to clarify its public policies regarding renewable power. The Council encourages the State to specifically adopt the following policies:
a. That Maine’s energy policy endeavor to minimize all environmental impacts from energy use and generation. Maine’s energy mix is diverse and contains renewable energy sources, yet all energy sources have detrimental impacts to our local and global environment. We urge the State’s acknowledgement of this and its adoption of additional policies that ensure that all unnecessary impacts to our environment be minimized and mitigated. This is especially important that Maine minimize harm to Maine’s rivers and watershed habitats in its policies regarding hydroelectric facilities, and to our forests and airshed in its policies regarding biomass facilities.
b. That State energy policy prioritizes public support and funding for new clean renewable power. Currently, the State favors use of natural gas, a fossil fuel. The State should maximize the use and generation of new renewable power, especially by removing regulatory barriers and creating support mechanisms for additional development of wind power in Maine, rather than promoting imports of harmful fossil fuel including coal, oil and natural gas. By maximizing the use and in-state generation of renewable power in Maine, Maine will supplement its goals for energy independence and security.
In conclusion, the Report has identified many good mechanisms for supporting existing and new development of renewable power resources in Maine. Many of these options could be more fully explored and developed in the final version of the Report. The State of Maine has the power and the creativity to create a long-term strategy for increasing new renewable power in our state, and should do so. While many existing sources of renewable power have had – and continue to have – detrimental impacts to our environment, such does not need to be the case in the future. Utilizing current technology and cost-effective methods, Maine could minimize the harm to our environment that is being caused by some of our renewable power facilities. Maine should create a course of action that ensures that site impacts and overall environmental impacts of our energy demands are minimized in existing and in proposed new projects. We encourage the State to embrace this challenge wholeheartedly and to put Maine on a course to using more sustainable and environmentally-benign forms of energy generation.
Thank you and if you have any questions, please contact Sue Jones, Energy Project Director at the Council at 622-3101, x 215.
The following are inadvertent mistakes in the Report that need to be corrected in the final version:
a. Page 22 of the Report states that a biomass plant that generates in conjunction with sustainable forest practices can be a neutral emitter of CO2. This is a highly generalized statement that is not likely true in Maine because of the difficulty in verifying the use of sustainable wood fuels, and in the flexible nature of our operating permits that allow for frequent fuel switching by biomass plants. In addition, the Department of Environmental Protection’s current Greenhouse Gas Inventory (which includes CO2 emissions) indicates that Maine’s forest are emitters of CO2, thereby disputing the PUC’s statement.
b. Page 24 of the Report states that incineration results in lower mercury emissions than landfilling. This is not correct. Burning mercury-containing items volatilizes mercury, which can then escape to the atmosphere. In addition, where there is pollution control equipment on incinerators, mercury can also be collected by scrubbers and in ash; this mercury-containing waste would need to be landfilled anyway. Mercury-containing products need to be disposed of properly or recycled: disposing them in landfills is not a good alternative, and burning them is far worse.
c. Page 25 of the Report again states that incineration is more benign than other disposal methods. This, too, is a highly generalized statement. The key here is: incineration of what and how? We do not effectively sort trash in Maine to incinerate only the less harmful waste items (i.e., non-recyclable paper). Burning of many of the items in municipal solid waste can be highly detrimental to our public health and environment. Since it can be harmful, we should not be subsidizing or supporting this practice.
d. Page 38 of the Report states that burning sludge may be more environmentally benign because sludge would emit heavy metals anyway as it degrades. This, too, is not correct. Again, as is true with MSW, burning volatilizes toxic heavy metals and does not destroy them. It would be better to dispose metals-containing materials in secure landfills than to burn them.