Monday, March 10, 2014
AUGUSTA – Lawmakers plan to take up a compromise bill Tuesday that could lower energy costs by investing in increased efficiency and helping to pay for heating systems that burn less expensive fuels.
The bill, which supporters say has input from Democrats and Republicans, is to be presented to the Legislature's Energy, Technology and Utilities Committee.
According to a draft summary obtained by the Portland Press Herald, the measure would increase funding for Efficiency Maine's electricity conservation programs by using millions of dollars from a recent settlement between the federal government and the owners of the former Maine Yankee nuclear power plant in Wiscasset.
It also would earmark money for Efficiency Maine to help homeowners upgrade their heating systems or switch to cost-effective alternatives.
The bill is the product of promises by politicians to do something meaningful this year to lower the state's above-average heating and electricity bills. It incorporates ideas from at least nine separate bills that already have had public hearings, including bills introduced on behalf of Gov. Paul LePage and Democratic leaders. At issue is the best ways for Maine to use government money to advance cost-saving goals.
In general, Democrats and their allies, including environmental groups and various small businesses, favor programs that promote efficiency and conservation. Their approach maintains and expands energy-efficiency programs, steering millions of dollars to efforts to weatherize drafty homes and help businesses use less electricity.
Efficiency is the most cost-effective resource, supporters say, noting that 20 percent to 40 percent of the $5 billion that Mainers spend on energy each year is wasted.
Republicans, including LePage, mostly want to shift a share of that spending to heating. They favor redirecting efficiency money to reduce home-heating costs, perhaps by letting Mainers use rebates to help them buy new heating systems.
Home heating is the biggest energy burden for Mainers, advocates say, with many residents spending $3,000 a year to keep warm.
Over the past few weeks, legislative leaders, the governor's office and key interest groups have been working to meld elements of several competing energy bills into a package that they hope will win support in the Legislature and be acceptable to LePage.
Highlights in the draft summary show that Democrats, in general, support the notion that homeowners and businesses could save hundreds of millions of dollars by beefing up efficiency programs. That is consistent with findings by the Public Utilities Commission.
Democrats support raising additional money through the system benefits charge, the tiny fee extracted from everyone's electricity bill. Republicans and LePage have rejected that fee hike.
The compromise package suggests getting the extra money from the Maine Yankee settlement. Efficiency Maine now receives $28 million from the fee over a two-year period. The extra money would raise the total to $44 million.
That is a new and untested approach. It assumes that the Legislature can redirect money that the federal government is paying to the owners of Maine Yankee for the government's failure to dispose of spent nuclear fuel from the reactor.
In ongoing legal proceedings, Maine Yankee won $81.7 million, before taxes, in a settlement last winter. The money has been put in a trust fund while the company files a plan with federal utility regulators for using the award to benefit ratepayers. The settlement money is expected to slightly lower electricity rates, based on how much power customers use.
A second major part of the legislative package would send $6 million that the state receives from a regional auction of air-emission limits, known as RGGI, to Efficiency Maine for programs that lower home heating costs. The programs could include improving heating systems' efficiency or installing new natural-gas boilers or wood pellet units, for instance.
Another element would attempt to slash $200 million a year from Maine's electricity costs by making natural gas cheaper in New England. Half of the region's power plants burn gas, but inadequate pipeline capacity has been causing gas prices, and associated wholesale electricity prices, to spike in the winter.
One remedy, supporters hope, is to give the PUC authority to help contract for new gas capacity in the region, spurring construction of a new pipeline.
Another element would allocate $6 million to $10 million over six years for electricity conservation projects for large users, such as factories and hospitals.
The package also is noteworthy for omitting elements that were in earlier bills but were rejected by the governor and some special interests. For instance, it wouldn't raise the system benefits charge to increase funds for Efficiency Maine's programs, nor would it shift RGGI money from energy efficiency to other programs, such as fuel switching.
With time running out in the session, the challenge for the energy committee is to craft a final bill that's acceptable to the Legislature and LePage, and will create cost reductions that a wide spectrum of Mainers will notice.
Tux Turkel can be contacted at 791-6324 or at: