by Pete Didisheim, Advocacy Director
Senator Bartlett, Representative Martin, and members of the Committee on Maine’s Energy Future. My name is Pete Didisheim; I am the Advocacy Director for the Natural Resources Council of Maine, the state’s leading environmental advocacy organization with more than 12,000 members and supporters. I appreciate this opportunity to testify in strong support of L.D. 886, An Act to Secure Maine’s Energy Future.
Nearly 100 different bills have been introduced this session that deal with energy in some fashion. These bills contain many good ideas, but if there is one idea that seems to rise above all the rest, it is the idea that we must help Maine people and businesses reduce their dependence on imported heating fuels.
Maine is vulnerable, highly vulnerable to an energy shock that could cripple our economy and disrupt lives and businesses statewide. Our heavy dependence on heating oil, and the age and inefficiency of our buildings, are setting us up for an extremely challenging future.
When home heating oil last summer hit prices above $4.70 per gallon, we all anticipated the possibility of a grim and potentially disastrous winter. We cannot forget that warning. Although the current economic crisis has caused energy prices to fall, they will rise again – almost certainly. And when they do, Maine people will wonder what the Legislature did with the breathing space that was provided.
When the economy recovers and oil prices spiral upwards yet again, Maine homeowners and businesses could yet again experience fundamental threats to their ability to survive in Maine. Last summer, there was widespread talk about people being forced to leave their homes, moving in with others. Such talk could easily return, if our infrastructure remains as vulnerable to high oil prices in the future as it is today.
That is why the time to act is now
This legislation, L.D. 886, is based on the best thinking about what needs to happen in Maine to help Mainers get control of their energy costs and position ourselves for the future.
Federal stimulus funding will be important, but these funds will only support a short-term strategy. Funding will be available in 2009 and 2010, providing a short burst of activity and jobs in the energy services sector, and then the work will end. There will be short-term hiring; many homeowners will benefit from improved weatherization investments; and then it will be over – with hundreds of thousands of Maine homes and businesses no better off than they are today.
What we need is a long-term approach that will provide enduring jobs and will get the job done over the next 10 to 20 years of retrofitting, weatherizing, sealing, and insulating our buildings. L.D. 886 can do that, by providing an ongoing revenue stream similar to what is currently in place for electricity efficiency programs through Efficiency Maine.
Since 2002, Efficiency Maine’s programs have delivered more than $310 million in lifetime economic benefits to individuals and businesses in Maine. These savings are available to be invested elsewhere in our economy, and that is the fundamental purpose of L.D. 886 – reducing home heating oil costs by 20% – 30% by 2020, so that these funds are available to improve the economic condition of Maine people, businesses, and our communities.
Our electricity efficiency programs have been a big success, but they are not sufficient to address the core challenge before us now. Electricity costs are not where we really need to focus our resources and attention today. Rather, it is heating oil – costing to the tune of $2.5 billion annually – where huge paybacks and big steps forward are possible.
And this will require resources. L.D. 886 would establish a Heating Fuels Efficiency and Weatherization Fund, with resources coming from a surcharge on heating fuels similar in concept to the mechanism that funds our electricity efficiency programs. The surcharge would start at 2.5 cents/gallon and increase to 7 cents/gallon in 10 years.
Attached to this testimony is a chart showing what the surcharge would amount to, were it to have been in place during the 2007-2008 heating season. The new heating oil price, with the initial 2.5 cent surcharge, can be seen as a new thin red line a hair’s thickness above the market price. The slight increase in oil price (less than 1% for most of that heating season) would have generated sufficient revenues to help thousands of homes cut their energy costs by 20%. With passage of L.D. 886, nearly 100,000 homes and thousands of businesses would be made energy efficient over the next decade – with their owners made more secure and our communities and economy kept better intact.
And we will have created jobs for the long-term. Not just the jobs that come in a spike through one or two years of economic stimulus spending, but enduring jobs.
Efficiency Maine works with nearly 600 program allies – these are the contractors, vendors, suppliers, wholesalers and associations that help deliver electricity efficiency programs to ratepayers. With the Heating Fuels Efficiency and Weatherization Fund, Maine similarly will help create and sustain hundreds of jobs for contractors and energy auditors, for oil companies that expand into a broader array of energy services, and builders who can deliver the necessary weatherization and efficiency upgrades.
With new home construction at a standstill, and a huge number of unemployed contractors looking for work, this is an excellent time to put in place programs to train, certify, and redirect this workforce toward energy retrofits and whole building energy performance programs.
NRCM strongly supports the restructuring and consolidation of Maine’s energy efficiency programs, as proposed in L.D. 866. We believe this approach maintains the accountability necessary through oversight by the Maine PUC, while also providing the independence and mission-focus made possible through a non-profit corporation model. This approach is based on the best thinking across the country, and a proven record of success in states where a similar structure has been established. The Efficiency Maine Trust would be outside of state government, yet fully accountable to Maine ratepayers through planning, program plan approval by the PUC, independent program evaluation, strict cost-benefit requirements, and reporting to the Legislature.
In closing, NRCM urges the Committee to work with this bill, which is the product of many months of development and open conversation with key stakeholders. Every provision is not perfect; friendly amendments and improvements certainly could strengthen the final product. But the idea behind this bill is the BIG IDEA that needs legislative action this year. We need a focused, integrated, all-fuels approach to energy efficiency, and L.D. 886 does that.
As you consider this bill, we ask that you pretend that it is a few years from now. The economy has recovered. Nations around the world are resuming their energy consumption levels. Oil prices are on the rise. Home heating prices soar to $3.00/gallon, then $4.00/gallon, heading toward $5.00/gallon. And Maine people consider what has happened since the last time this happened. We urge you to be part of the process that prepares Maine for the next big increase in energy prices, and thereby improve our energy security and the long-term viability of our homes, communities, businesses, and economy.
I appreciate this opportunity to testify in support of L.D. 886 and urge that you approve this bill.