Senator David Woodsome, Chair
Representative Mark Dion, Chair
Joint Standing Committee on Energy, Utilities & Technology
My name is Dylan Voorhees and I am the Clean Energy Director for the Natural Resources Council of Maine. Thank you for allowing us to present this testimony.
The Omnibus energy bill was a carefully negotiated set of energy policies agreed to by Democrats, Republicans, industrialists, environmentalists and others. It restructured how energy efficiency was funded in order to maximize electricity savings for residential and businesses consumers. NRCM opposes any effort to attach new policies and conditions to correct a typo in a carefully balanced agreement on past legislation. Instead the Legislature should swiftly pass LD 1215 with its simple, straightforward one-word fix.
Assuming the energy efficiency typographical fix is removed from this bill, the rest of the bill should be independently considered on its merits.
We strongly oppose Section 3 of the bill, and are largely neutral to the other sections to the bill.
Section 3 removes the requirements that the Efficiency Maine’s board of trustees appoint, through a “competitive search process,” a “qualified” director who has “demonstrated experience” in energy efficiency programs, and replaces them with the simple requirement that the Governor shall select the director, subject to Senate confirmation.
It would be a serious mistake to shift Efficiency Maine from a professional, independent organization to a more politicized agency led by a political appointee. Efficiency Maine is providing substantial benefits energy consumers, and functions in many ways more like a utility than a traditional government agency. (You may know that efficiency programs are administered by traditional utilities or formal “efficiency utilities” almost everywhere else.) Its independence is a fundamental feature of the Trust meant to maintain a long-term focus on measurable energy saving outcomes.
The Trust already has multiple strong layers of accountability and oversight:
- Efficiency Maine is governed by a Board of Trustees that is appointed by the governor with confirmation by the Senate. The Board meets in public every month and has a fiduciary responsibility for ensuring Trust funds benefit the consumers they represent.
- The Board conducts a commercial-grade financial audit of the Trust annually. Those audits find extremely high levels of financial management.
- Efficiency Maine’s programs and budgets are subject to approval by the Public Utilities Commission through periodic adjudicatory proceeding. Maine law sets aside 1% of Efficiency Maine’s funds to be used by the PUC for oversight.
- Note: This is the same as every other energy efficiency administrative body in the United States. There are no energy efficiency program administrators in the U.S. directly appointed or managed by a political official.
- Efficiency Maine’s governing statute provides clear guidance for how efficiency funds are to be spent. Those laws can of course be modified by the legislature at any time.
- Efficiency Maine must report twice per year to the Energy & Utilities Committee on its plans, savings and budgets, including taking input on the Triennial Plans.
- Maine law requires every Efficiency Maine program to be periodically evaluated by independent, third-party reviews, which are provided to the PUC and publically available.
- To qualify for energy efficiency savings credits with ISO-NE, the regional grid operator, Efficiency Maine must meet extremely strict standards for measurement and verification of actual energy savings.
The committee should consider carefully the distinction between accountability or oversight and control by a political office. The committee should also carefully identify what problem it might be seeking to fix or avoid by making a change to the governance structure of Efficiency Maine. The Trust was established to serve the needs of energy consumers; its funding comes almost exclusively from energy consumers directly; its board is made up of people who represent the interests of those consumers. Over the last few years the Trust has demonstrated on a score of occasions how it has responded to the needs of consumers or the bodies that oversee it, whether that is incorporating new efficiency technologies into its programs, adding new fiscal controls for subcontractors, or responding to changes in statutory direction.
Efficiency Maine must administer programs to make stable progress on long-term goals. Elected officials have a wide variety of goals, which may be shorter-term, or may change more quickly than is best for growing a private sector energy efficiency market. Finally the changes in this bill would add confusion to who the Trust and its director answer to. Having “two masters” is not a recipe for effective management and stability.
The bill also elevates the Governor’s Energy Office to a larger Energy Office led by a Commissioner and Deputy Commissioner, with additional funding from ratepayers. The expansion of the energy office may be a positive step for Maine, although it is a significant change that should be considered carefully. In particular, the committee should be aware that taking funding from Efficiency Maine to staff the office means taking funding from ratepayers. Ratepayers currently pay for the entire Public Utilities Commission and Office of the Public Advocate, however you should consider whether this funding source is appropriate for a general Energy Office.
We urge you to amend the bill to remove sections 3 and 4 of the bill, or barring that, vote it ought not to pass. Thank you.