Senator David Woodsome, Chair
Representative Seth Berry, 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 me to present this testimony.
NRCM has been a steady supporter of Maine’s Renewable Portfolio Standard (RPS) since 2007 when Representative Ken Fletcher (R-Winslow) proposed what became the Class I RPS. We oppose this bill, which would provide no significant benefits to ratepayers or the increased production of renewable energy, and could risk the progress we’ve made to-date to grow Maine’s renewable energy economy.
A version of this bill has been introduced, and defeated on a bipartisan basis, at least four times before in the last several sessions of the Legislature:
LD 132, An Act to Remove the 100-megawatt Limit on Renewable Sources of Energy” – Majority ONTP
LD 1339, An Act to Provide Relief to Maine Ratepayers – Majority ONTP
LD 646, An Act to Remove the 100-megawatt Limit on Renewable Sources of Energy – Majority ONTP
LD 1863, An Act to Lower the Price of Energy for Maine Consumers – Majority report left 100 MW limit
The purpose of an RPS, which today exists in most states, is to stimulate market demand for new investments in renewable energy, in order to diversify our portfolio mix and transition away from our reliance on fossil fuels for power. Fossil fuels make up roughly half of our electricity portfolio. Maintaining this mix for energy is undesirable for many reasons, from pollution and public health impacts, to costs for businesses and families, to overdependence on fuels that we must import at great expense and insecurity. Renewable energy includes different sources of generation, but as a whole they are far less polluting, sustainable, and stable over the long-term, and “made in Maine.”
New renewable energy generation faces several market barriers, many stemming from the fact that our entire energy system—from policies to markets to physical infrastructure—has been oriented for many decades toward oil, gas, and coal. Our federal government has spent hundreds of billions of dollars over the decades to subsidize oil, gas. and coal extraction, processing, and generation, while spending a small fraction on renewables. The cumulative effect of decades of lopsided subsidies has left the energy playing field very unequal.
Interestingly, there have been similar government subsidies for large-scale hydro by our Canadian neighbor to the north. This bill would allow a large, government-backed foreign utility, such as HydroQuebec, to become eligible for our Renewable Portfolio Standard credits. HydroQuebec does not need to receive benefits from Maine ratepayers any more than big oil or big coal do in the U.S. Nor would Maine’s economy benefit from providing them.
In recent years London Economics International was hired by the Maine PUC to conduct a cost-benefit analysis of Maine’s RPS. Their objective analysis found that our RPS, in combination with those of the other New England states, will continue to provide major economic and employment benefits to the state. If the purpose of this bill is shift ratepayer support for renewables into Canada, then it directly follows that it will correspondingly lower the benefit to our economy that comes from investments in renewable energy. And in doing so, it could increase our dependence on a foreign source of power.
Because of some of the confusing rhetoric around this issue it is important to set some facts straight.
First, there is no evidence that HydroQuebec would sell power to Maine at below market rates. Perhaps the most useful piece of evidence is looking to Vermont, which has a long-term contract with HydroQuebec. Vermont’s contract escalates in relation to market prices, but most significantly, Vermont’s electric rates are 30% higher than Maine’s. Although both states are part of ISO-NE’s electricity market, a key difference between the states (beyond the fact that they have a HydroQuebec contract) is that Maine has built and is continuing to build up a substantial supply of local renewable generation. All else equal, more supply means lower prices.
Second, this bill is about Canadian mega-hydro and has nothing to do with existing or possible Maine hydropower. There are no, and are very unlikely to ever be, dams in Maine or New England greater than 100 MW. (Smaller new Maine hydro plants are already eligible under the RPS, but as the Committee knows, this has not made it sufficiently economic.)
Third, nothing would prevent HydroQuebec—or any other generator—from selling power into Maine today for the 60% of Maine electricity demand not covered by the RPS. The only reason the Public Utilities Commission hasn’t signed a contract with them is because they haven’t indicated any real intent to offer Maine low-cost power.
We also cannot fail to mention that massive hydropower projects in Canada often have significant environmental impacts—in some river ecosystems, truly massive impacts. We do not oppose the use of Canadian hydropower, nor are we supportive of the inefficient biomass power plants that are a primary recipient of RPS credits today. And we believe Maine’s RPS can be substantially improved in the coming years, now that it has reached its 10% target. Nonetheless, simply opening up Maine’s RPS to Canadian hydropower is not a constructive or balanced reform.
For all of these reasons we urge you to vote this bill down as the Legislature has in the past.