April 22, 2013

Can state cut energy costs? The heat is on

The governor and Legislature will need to compromise to come up with sorely needed efficiencies.

By Tux Turkel tturkel@pressherald.com
Staff Writer

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In this October 2012 file photo, The Revs. Alice and David Anderman show off a new energy-efficient furnace, hot water tank and foam insulation-covered walls in the basement of their home in Waterville.

Staff photo by David Leaming

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Census figures show that Maine's overall electric rates are the lowest in the Northeast. But industrial rates, which average 8.4 cents per kilowatt hour, are more than a penny higher than some states with forest products competitors, such as Michigan and Wisconsin.

Very large electric users in Maine, such as paper mills, already are exempt from paying the system benefit charge. Exempting more businesses would take roughly $2 million from Efficiency Maine's programs. And that savings would cut average industrial electric rates only a fraction of a cent.

Woodcock, however, says the cut is more than symbolic.

"It is a marginal difference," he said. "But we continue to hear from industrial consumers that margins are important."

But environmental activists say this approach doesn't make sense because efficiency investments have such a quick payback. One group, Environment Northeast, points to The Jackson Laboratory in Bar Harbor, which used a $1 million Efficiency Maine grant to buy a wood-fired boiler. The unit cost $4.4 million. But it will save $2 million a year in oil costs and trigger $1.8 million in spending for the state's forestry industry.

Efficiency Maine's data show that its programs deliver energy savings at an average cost of 1.27 cents per kilowatt hour, compared with the 8.7 cents or so that larger businesses can pay for power. Handing the system benefit charge money back to some large businesses also ends up costing other companies more in the long run if they can't gain access to the agency's programs, said Dylan Voorhees, clean energy director at the Natural Resources Council of Maine. He estimates that the shift contemplated by LePage will cost businesses $100 million over the next three years.

Voorhees said he's not opposed to spending more to cut home heating costs, but doesn't think it should be done at the expense of proven, cost-effective savings on electricity use.

"It's not one or the other," he said. "They're not competing ideas. We should be fully investing in energy efficiency, across the board."

Voorhees' group is supporting a bill being presented by Sen. Jim Boyle, a Democrat from Gorham. It would let the Public Utilities Commission, rather than the Legislature, determine the system benefit charge, based on what it determines to be cost-effective efficiency measures. The bill also would seek small, voluntary payments from the sale of oil and propane to establish a fund for efficiency improvements and weatherization.

A pair of bills that would help expand natural gas lines in Maine and New England, presented by House Republican Leader Ken Fredette of Newport, had public hearings last week before the committee. One would let the state issue bonds to help finance new or expanded pipelines. The goal is to increase the capacity of gas flowing into the region, and lower the price. Natural gas is about half the price of oil, but it's higher in New England than in other parts of the country.

These and other measures provide a starting point for discussions on how to enhance Maine's energy policies, said Rep. Barry Hobbins, a Saco Democrat who co-chairs the committee with Cleveland. Hobbins credited LePage with reaching out early to Democratic leaders -- through Woodcock -- in search of consensus.

"This session, there is an opportunity that I don't want to squander," he said.


Tux Turkel can be contacted at 791-6462 or at:



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