Friday, March 7, 2014
By STEVE WARD and DOUG BASTON
Gov. LePage has launched another of his lonely attacks on Maine's long-standing energy policies, this time on Efficiency Maine and the idea of energy efficiency generally.
Efficiency Maine offers rebates to Mainers who replace their old refrigerators, like this one, owned by a South Portland family, with newer models that use less power.
2010 File Photo/Gregory Rec
He apparently believes that a good way to bring down electricity costs is to stop funding for energy-efficiency projects that lower electric bills. This is like trying to lose weight by canceling your gym membership. It doesn't add up.
The reason Maine's electricity rates are high is simple: We don't have the abundant hydropower of the Tennessee Valley or the cheap coal of the Midwest. We are not unique in this. It's a geographic reality for the entire Northeast.
What's unique is that the rest of the region fully embraces the one resource we have to offset our disadvantage -- one that is completely under our control, lowers the costs of running a business or maintaining a home and creates good local jobs. What is it? Energy efficiency.
Rather uniquely, Gov. LePage sees a policy that is generally accepted as a triple win to be a "Ponzi scheme" -- that is, a fraud that produces no return and inevitably will collapse. The governor's perspective is both unique and unsupported by any conventional economic analysis.
For almost 30 years -- under governors of all political persuasions -- our neighboring states have steadily expanded their investments in efficiency as the lowest-cost resource to meet their energy needs. New England's grid operator, ISO New England, now counts on efficiency as a part of our regional energy mix, applies the same reliability standards used for power generators, and expects growing efficiency acquisitions to meet a large part of our future energy needs.
Elsewhere, the fact that energy efficiency is an inexpensive and reliable resource is so obvious and well-accepted that it provokes little debate. Utilities see delivering energy-efficiency programs as an accepted part of their business model.
Tom King, the president of National Grid, a utility that serves 3.3 million customers in Massachusetts, New Hampshire, New York and Rhode Island, spoke for much of his industry when he testified before Congress.
He stated that his company "stands with many other energy providers ... in recognizing that energy efficiency uniquely addresses many of our nation's core energy issues -- it is more cost-effective than building new power plants, has the potential to dramatically lower greenhouse gas emissions and provides consumers with long-term savings on their energy bills."
Here in Maine, the three commissioners of the Public Utilities Commission will be acting this month on an Examiner's Report recommending a dramatic increase in the budget for Efficiency Maine. The Maine PUC's staff economists and analysts have concluded that more public investment in efficiency is cost-effective for the state's ratepayers. This recommendation, however well-documented and however consistent with those of many other utility regulators around the country, is one that Gov. LePage is ready to attack.
It is unclear why Gov. LePage rejects the strong consensus supporting energy efficiency. His belief that it raises rates is simply incorrect.
Independent economists have established that efficiency investments avoid the construction of new, expensive power plants, which, if built, definitely will raise rates. And in any event, customers pay bills, not "rates," and as any business that has participated in an Efficiency Maine program will tell you, their bills went down, often substantially.
By every measure, Efficiency Maine has performed its highly technical mission admirably. Its books are open. Its programs are regularly evaluated by independent outside professionals. It is regulated by the PUC. For reasons unclear, however, the governor now seems determined to bend this independent, nonpolitical, analysis-driven agency to fit his personal political philosophy.
Ironically, by defunding Efficiency Maine and diverting away from energy efficiency the revenue from Maine's share of Regional Greenhouse Gas Initiative auctions, the governor would deprive Maine businesses of the best tool they have to reduce the energy-related costs of doing business in Maine. Now that really would be a Ponzi scheme.
Steve Ward of Newcastle was Maine's public advocate for more than 20 years, serving under Republican, Democratic and independent governors; and Doug Baston of Alna is president of North Atlantic Energy Advisors and has consulted on energy policy to electric utilities and state and provincial governments for more than 20 years.
- Special to the Telegram