AUGUSTA — One missing word in the Legislature’s 2013 energy law will reduce funding for energy efficiency programs for homeowners and businesses across Maine by up to $38 million.
A single omission of “and” in the 11,633-word law led the state Public Utilities Commission to determine Tuesday that funding for the Efficiency Maine Trust will be capped at $22 million for the fiscal year beginning in July 2016, rather than the $60 million the Legislature apparently intended.
The 2-1 PUC vote means less money will be available for a program that homeowners used to buy 2.5 million discounted low-energy light bulbs last year and that 3,000 businesses used to reduce their electricity costs with rebates or subsidies for a wide range of energy-saving improvements.
“It really runs the gamut between the smallest light bulbs to the biggest piece of industrial machinery,” Michael Stoddard, executive director of Efficiency Maine, said of the program.
The energy law authorizes the PUC to set electricity rates to raise money for energy efficiency programs, as long as the amount raised does not exceed 4 percent of “total retail electricity transmission and distribution sales” in Maine. What the law should have said was 4 percent of “total retail electricity and transmission and distribution sales,” according to several members of the Legislature’s energy committee.
By not including the first “and” the law reduces the amount of revenue used to calculate the 4 percent cap, resulting in a $38 million reduction in funds that would be available for energy conservation in the 2017 fiscal year.
The decision has been widely derided by Democrats and environmental organizations, who have accused Gov. Paul LePage’s two appointees to the commission of ignoring the intent of the law to side with the governor in his long history of antipathy toward Efficiency Maine. They also said the cut defies the governor’s oft-stated goal of wanting to reduce electricity costs for Mainers and businesses.
“This clearly flies in the face of what the governor says he’s trying to do,” said Sen. Dawn Hill, D-Cape Neddick. “This isn’t a pilot project. This is a tried-and-true program that’s getting real results. We should be expanding it, not contracting it.”
READING PLAIN LANGUAGE OR PLAYING POLITICS?
Mark Vannoy, a 2012 LePage appointee who heads the commission, joined Carlisle McLean, the governor’s former legal counsel, in the majority decision. Vannoy defended his decision to interpret the law as written, despite evidence that the lawmakers who vetted the proposal intended to use 4 percent of total retail electricity sales, as well as transmission and distribution sales, to fund Efficiency Maine.
Vannoy told the Press Herald that the language was clear and the commission had no reason to explore the Legislature’s intent.
“The first thing you do in a case like this is read the plain language and see if the words in the language have meaning,” he said. “If the words in the language have meaning, and is not ambiguous, then that’s what the statute says. That’s what you have to apply.”
Vannoy said lawmakers’ intent was irrelevant. Asked if the intent of the Legislature should matter when interpreting the laws it passed, Vannoy replied, “It does matter, but what matters more is what the statute actually says. If you look at the history of this bill, it got reported out of committee without that ‘and’ in it.”
He said to interpret the law differently would have required adding the word “and.”
“I didn’t feel that was the appropriate role for me as a commissioner to do that,” he said.
A draft copy of the bill showed that the word was included when the energy committee passed the bill on May 26, 2013.
Rep. Sara Gideon, D-Freeport, a member of the committee, said the omission was likely a drafting error.
“Who knew the word ‘and’ was worth $38 million?” she said.
Gideon said Democrats and Republicans will have to work together to fix it. The Legislature is currently divided. Republicans control the Senate while Democrats have the majority in the House of Representatives.
“From my perspective, what we crafted with the omnibus energy bill was a very big bipartisan compromise,” she said. “All of us who were here want to honor that and we need Republicans and Democrats to work together to do that. It shouldn’t be conditional on anything else.”
Republicans have not responded to the PUC decision. Rep. Kenneth Fredette, R-Newport, one of the leading advocates for the 2013 bill, could not be reached for comment and did not return messages left with his communications director.
Efficiency Maine funding is derived from a variety of sources, including surcharges on individual electric bills, a settlement connected to the now-defunct Maine Yankee nuclear power plant in Wiscasset, federal money and the cap-and-trade carbon emissions program known as the Regional Greenhouse Gas Initiative. Efficiency Maine anticipates spending more than $50 million on electricity efficiency programs for homeowners and businesses during the fiscal year that ends June 30, according to Efficiency Maine staff.
The surcharge proposed in the energy law to fund efficiency would be reflected on Mainers’ electricity bills. Currently, the Efficiency Maine surcharge costs ratepayers 0.145 cents per kilowatt hour, or about 78 cents a month, based on the average ratepayer’s monthly consumption of 540 kilowatt hours. It would increase to 0.58 cents per kilowatt hour, or $3.13 a month on an average bill, if the funding was calculated with the “and” included.
Stoddard said the PUC decision could force Efficiency Maine to make a decision between funding electricity efficiency programs or home heating efficiency programs.
There was speculation Tuesday and Wednesday about whether the PUC decision was politically motivated, given LePage’s past criticism of some Efficiency Maine programs and the fact that he appointed both Vannoy and McLean.
“I can’t comment about what the governor’s involvement in this decision was, but the decision is so baseless from a legal perspective and so clearly not what the Legislature intended that it is reasonable to conclude there is some ideological viewpoint that is behind it,” said Dylan Voorhees, who handles clean energy issues for the Natural Resources Council of Maine.
Voorhees said the council’s first move will be to formally petition the commission to reconsider its decision. If that fails, the organization could pursue court action.
Both LePage spokeswoman Adrienne Bennett and the governor’s top energy adviser, Patrick Woodcock, said the governor had no role in the PUC vote.
“He has no communication whatsoever with (the commission) in terms of decision-making,” Bennett said. “He puts people in place who are qualified for the task at hand and he has the utmost confidence in those commissioners.”
SEEKING SOLUTION FOR ‘A CLERICAL ERROR’
But Woodcock said the administration views the way the program is financed – through a fee on ratepayers’ electricity bills – as “an antiquated model for funding efficiency programs.”
“Obviously more resources are better, but can we obtain them in a way that doesn’t charge people on their electric bills?” Woodcock said.
The LePage administration opposed the way the program was designed in the 2013 bill. Woodcock said LePage also believes that the state should be putting a higher priority on programs that help Mainers convert to more efficient or less costly home heating systems, rather than spending more money on electricity efficiency.
PUC Commissioner David Littell, who cast the dissenting vote, said the legislative record makes it “absolutely clear that it was a clerical error.” Littell said that, in addition to the legislative documents, there also is correspondence between the PUC’s former chairman, Tom Welch, and staff supporting the higher cap.
“There is simply no question, and that is why the majority didn’t want to look at the record,” Littell said Wednesday. “Because the record is clear.”
Littell would not speculate about the reasons behind the differing interpretations of the law. But Littell, whose term ends March 31, predicted that the decision, along with one last month involving long-term contracts for wind power, will ultimately increase electricity bills.
Gideon, the Freeport lawmaker, said Democrats were concerned that the independent commission had exceeded its regulatory duty by ignoring lawmakers’ intent in 2013.
“We are very, very distressed about the PUC decision and the implications of it. They have now stepped outside of the realm of regulatory authority, in our view, to actually change policy that the Legislature has enacted,” Gideon said.
“We know that ratepayers, from individuals in homes to our largest businesses, are going to be impacted by this adversely,” she said. “We are trying to find a solution.”