Gov. Paul LePage vetoed a landmark solar energy bill Wednesday, after failed attempts by Democratic leadership to reach a compromise during extensive negotiations.
Solar advocates now plan to press lawmakers to override the veto when they reconvene Friday.
Rep. Sara Gideon, D-Freeport, the assistant majority leader, said a request by the governor to cap at a very low level the price that homeowners receive for solar power they generate was a deal breaker.
“That would have tanked this market immediately,” she said.
The controversy centered on “net metering,” the state rule by which utility companies provide a one-to-one credit to home customers for solar power they generate and feed back into the grid. The credit is based on the retail price of power.
Net metering rules across the country are under fire by politicians and utility representatives, who say the price amounts to a subsidy that’s forced on all utility customers. In Maine, however, the bill was supported by Central Maine Power and Emera Maine.
According to Gideon, LePage asked for a price cap that would have started at 10 cents per kilowatt hour and declined in 18 months to the standard offer price for energy supply, which is around 6 cents. By comparison, the retail price, which includes energy and distribution charges, is around 12 cents in southern Maine.
Democrats and their allies, which include environmental groups and many small businesses, have been trying to gain support for a bill that would increase the use of solar energy in Maine, which lags behind other northeastern states.
The Legislature approved the measure last week after changes were made to better insulate utility customers from rate increases. But the margin of support falls short of the two-thirds majority needed to overturn the veto by the governor, a frequent critic of Maine’s renewable energy policies.
The bill aims to add 196 megawatts of solar energy to the state’s energy portfolio over the next four years, down from the 248 megawatts called for in the original version. Maine has roughly 20 megawatts of installed solar energy today. It also would replace net metering for new solar customers with a complicated, alternative system involving hourly metering and the Public Utilities Commission entering into long-term contracts.
Supporters argue that the bill would provide a much-needed boost in Maine to an industry that is thriving elsewhere and stands to add as many as 650 jobs, while protecting 300 current jobs.
But Republican critics dismiss the bill as another policy that will force all electric ratepayers to help subsidize the solar energy systems of the wealthy households that can afford to install them. Throughout the debate, critics have portrayed the initiative as largely benefiting wealthier areas of southern Maine at the expense of ratepayers in poorer, more rural areas, where solar energy systems are less common.
In his veto letter, LePage said the bill would increase energy prices for homes and businesses that cannot afford solar panels “by tens of millions of dollars – picking winners and losers in Maine’s energy mix.” He said the bill would only increase the cost of doing business in Maine, adding that he has heard from executives at companies such as Bath Iron Works, Barber Foods and Pratt-Whitney “imploring us to lower the cost of energy.”
“I tried to negotiate in good faith with Democrats to reach a compromise that would not add to the burden of ratepayers,” LePage wrote. “I requested that the bill include all renewables, return all renewable energy credits (RECs) to ratepayers and have a cap on the price we pay in long-term contracts. We could not reach an agreement. They are not serious about reducing the price of energy for Maine families or job creators.”
Gideon said the governor asked for, and received, two earlier concessions in the bill. One would have opened up the PUC contract process to other renewable energy sources, not just solar. Another would have used the above-market value of renewable energy credits for so-called stranded costs, expenses that customers pay on their bills for past investments in power plants.
Clean energy advocates said they weren’t happy about either of those compromises, but went along with Gideon in hopes of persuading the governor to support the bill in some form. But the price cap request, they said, would have killed the existing solar industry.
“The governor’s final request,” said Vaughan Woodruff, owner of Insource Renewables in Pittsfield, “was a deal breaker because it sought to eliminate the solar industry that currently exists in Maine by undercutting the value that solar customers provide to the grid.”
Woodruff said he already has had to lay off two workers because of the uncertainty surrounding the bill.
He called on legislators to override the governor’s veto.
“This bill does exactly what many of them championed during their campaigns,” he said, “creating good-paying Maine jobs, reducing energy prices, and making Maine companies more competitive.”
Dylan Voorhees, clean energy director at the Natural Resources Council of Maine, indicated that the outcome wasn’t surprising because LePage had threatened to veto the bill all along.
“This bill represents the very best of people working together to find solutions and common ground,” he said. “We don’t often see such diverse interests align to do something that benefits jobs, consumers and the environment.”
Tux Turkel can be contacted at 791-6462 or at: