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 restores a single word (“and”) which was omitted in a typographical error, made between the time the 2013 Omnibus energy bill was voted on by the Energy & Utilities Committee and when the bill was enacted into law. The typographical error relates to the formula in the bill for setting a cap on ratepayer funding for energy efficiency programs. The committee intended the limit to be approximately $60 million/year in ratepayer funding, although the actual budget would be decided by the Public Utilities Commission (PUC) based on an analysis of costs and benefits. Given the missing word, the PUC has interpreted the formula as a limit of $22 million/year. Absent a correction, funding for programs to save electricity will ultimately be reduced below the current level of approximately $40 million.
There are three compelling reasons to pass this bill swiftly.
1. Correcting an unintentional typographical error is consistent with the carefully negotiated, bipartisan Omnibus energy bill passed last session.
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. The bill also included authority for Maine to potentially participate in financing for a natural gas pipeline into New England to serve power plants. As such, it was a difficult balance that required parties to work together in the spirit of good faith compromise.
Given the PUC’s current interpretation of the law, the energy efficiency portions of the Omnibus bill could effectively be negated without restoration of the missing word. There is no dispute about the energy efficiency limit intended by the Energy & Utilities Committee, and no dispute that the word was left out by accident, after the Committee voted on the bill with the “and” in place. (Committee records from the day the bill was voted 12-1 by show specifically the bill language included the word “and” and that the intended cap was $59 million/year.)
Honoring those agreements and fixing this typo is the right thing to do. We commend the bill’s four sponsors for recognizing this imperative.
2. Failure to correct the error will severely limit Efficiency Maine programs going forward, which means higher energy bills for Maine homes and businesses.
If the PUC’s interpretation is not reversed soon, either by the Legislature or by the courts, it will radically limit Efficiency Maine’s next 3-year plan and budget to be developed and submitted to the PUC this fall. If the $22 million cap stays in place, the Plan will not be able to maximize savings as intended. Less efficiency means fewer savings. We estimate that energy consumers will pay $250 million in higher energy bills from missed efficiency savings in just those 3-years, an amount that could grow to $1 billion over 10 years.
The first casualties of this limit will be on efforts to help businesses reduce electricity costs. This includes an intensive initiative to help small businesses invest easily in efficiency upgrades. This small business program ran last winter in the Fort Kent and Houlton areas, and is currently operating in Waterville-Winslow and Oxford-Norway regions. Efficiency Maine has already scaled back this program in the current fiscal year because of lack of funding to go to new regions.
The limit would also severely restrict funds for the largest industrial consumers. A key source of funding for programs for these customers is through a PUC-approved long-term contract. The current contract expires in July, and the cap would likely foreclose any new contracts. That saddles our largest energy users—many of whom are also very large employers—with higher power bills.
Next, the limit on new electrical efficiency funds would likely force Efficiency Maine to shift its use of RGGI funds from saving oil, where they are currently spent, to saving electricity. (It may otherwise risk failing to meet its statutory directives and/or fail to deliver the savings it has promised to ISO-NE.) This would mean little or no funds to help homes and businesses save oil, including the incredibly popular and successful Home Energy Savings Program. That program includes everything from insulation to wood pellet stoves to heat pumps and more.
3. The energy efficiency sector has been growing as energy efficiency activity grows, and a reversal would jeopardize jobs and business growth.
Finally, after the Omnibus bill passed, hundreds of Maine energy businesses began to expand and hire new workers as a result of the predictable, long-term energy efficiency programs now being ramped up. These are good quality jobs that cannot be outsourced. Last year the Maine Technology Institute found that clean energy is the technology sector of Maine’s economy with the greatest capacity to grow, and with the highest wages. The Omnibus energy bill was one piece of accelerating growth in that sector. These businesses put Maine people to work helping other Maine people reduce energy costs and increase profits.
Without a correction, many of these jobs will be lost and the opportunity to increase good paying jobs in an important clean energy sector will be forfeited. Furthermore every time the legislature seriously considers taking away funding for efficiency or takes actions that lead to unpredictability, these businesses become more and more reluctant to grow and hire.
Again we commend the bipartisan support behind this bill and urge the committee and the legislature to swiftly pass LD 1215 with its simple, straightforward fix.
 NRCM strongly disagrees with the PUC’s interpretation of the law as written and will ask them to reconsider. However our testimony today focuses on whether or not the Legislature should correct the typo and eliminate any ambiguity.