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. This bill takes a wrecking ball to Maine’s clean energy laws, which have been developed over many years to help Maine take greater control of our energy future.
Historically Maine’s energy policies have been developed in a highly bipartisan fashion. For example, Maine’s Class I Renewable Portfolio Standard (RPS) legislation, which would be repealed by this bill, was sponsored by a Republican lawmaker. Looking across the country, renewable energy policies are often more closely correlated with the availability of renewable energy resources than party politics. In Oklahoma, for example—one of the most politically conservative states in the union—they have a bold and effective RPS and other policies to foster investment in renewables, particularly wind. It has strong support from their Republican governor, and is widely appreciated for creating jobs and spurring economic activity (some of which comes with profits from exporting desirable renewable power to neighboring states.)
Even more than Oklahoma (which also has major fossil fuel resources), Maine’s energy advantage is renewable energy. This bill guts fundamental energy policies that help Maine increase renewables both large and small.
Although we have significant renewable energy resources, Maine and the region remain heavily dependent on fossil fuels—particularly natural gas—for power, which not only damages our climate and clean air, but perpetuates Maine’s energy insecurity. The solution is broadly recognized as a combination of significant energy efficiency improvements and a steady shift toward local, sustainable renewable energy for diversity, security and price certainty. This bill undermines both.
The RPS encourages large-scale renewables, which Maine benefits from through large volumes of low-cost power as well as significant job creation and investment in local (often rural) economies. The cost of the RPS is extremely small, and Public Utilities Commission (PUC) analysis shows the Maine RPS, in concert with regional RPSes, provides a large net benefit to our economy.
Forty-four states use net-metering as a simple, effective way of compensating homes and businesses for energy they invest in and produce for their own use, such as solar arrays, thereby reducing the amount they need to buy from the grid. It has been the foundation upon which thousands of Maine homes and businesses have invested in rooftop solar.
These policies are not perfect. Eligibility for the RPS was set too loose, so there is an oversupply within the program. This means the program is cheap but not as impactful as it could be. There has been no effort to improve or tighten up the program, just to repeal it.
This ongoing and reckless approach tells investors, from large developers to homeowners, that investing in Maine renewables is risky. Risk and economic investment do not mix well. If you pass this bill, it will decimate Maine’s small and struggling solar industry. But even if you carry-over this bill, you will be hanging a “Sword of Damocles” over net-metering. You would send a 12-month deep chill over the market for homeowners and businesses considering buying solar for their roof. And you would do that during the last 18-months of the federal tax credit, which is a time when Maine’s solar market should be growing rapidly and the state should be attempting to catch up on this important distributed resource.
An easily overlooked provision of this bill would also reduce energy efficiency investments, by prohibiting the PUC from approving utility contracts to buy energy efficiency or other demand resources. Such a contract has recently been used to provide substantial funding ($4-8 million/year) for Maine’s industrial facilities and other large energy consumers to do energy efficiency improvements. These contracts for demand resource, along with RGGI funding (which would be eliminated by LD 1398), provides the only source of funds for Efficiency Maine to help the largest energy consumers lower their energy costs through energy efficiency.
Finally, the only new policy in the bill is an “aggregator” who would purchase the output from small solar producers and resell it at market prices. We estimate that this might compensate solar producers at a current rate of 8-12 cents/kwh, compared to the current net-metering rate of 13 cents, and compared to the actual value of solar output as determined by the PUC of 18-34 cents/kwh. The aggregator concept may have merit, but it is better contained within the Public Advocate white paper and draft Resolve on distributed solar that the committee is considering. Unlike this bill, that proposal seeks to match the aggregation mechanism with the actual benefits that solar provides to ratepayers so we aren’t leaving value on the table.
The bill would decimate Maine’s renewable and energy efficiency laws, leaving Maine more dependent on natural gas, less energy secure, with more pollution and higher energy costs.