AUGUSTA — An effort to cap electric rates in Maine at 10 cents a kilowatt hour or less will be voted on by the Legislature’s Energy Committee on Tuesday.
But the bill, LD 1339, authored by Senate President Michael Thibodeau, R-Winterport, also calls for the suspension of the state’s renewable energy portfolio requirements if suppliers cannot provide a 10-cent rate while still meeting the portfolio requirements.
State law requires a certain percentage of the state’s electricity to come from qualified renewable sources, which excludes hydropower facilities in excess of 100 megawatts. It’s a sticking point for some Republicans, including Republican Gov. Paul LePage, who has said the portfolio creates an uneven playing field for power producers and has the government choosing winners and losers instead of the marketplace.
While most of Maine’s standard offer rates are below 10 cents a kilowatt hour for most ratepayers in the state, Thibodeau said his bill provides assurance for businesses and homeowners alike.
The portfolio requirements were meant to spawn the development of renewable energy production by requiring suppliers of electricity to either provide a certain mix of renewables, like wind, solar and biomass in their production mix or purchase renewable energy credits from other suppliers to satisfy the portfolio standard.
“I look at this bill as a relief valve,” Thibodeau said in written testimony before the committee last April.
At the time, the standard offer for most Maine ratepayers was less than 7 cents a kilowatt hour. Today, it is at 6.5 cents.
“I am not opposed to renewable energy sources — however, when my constituents and the people of Maine are forced to pay higher energy costs because the government has decided to grant an industry special preferences, that is wrong,” Thibodeau said.
While carried over from 2015, the bill is the second offered by Republican leaders in the Senate aimed at lowering the cost of electricity in Maine. Earlier this month, a bill proposed by Sen. Garrett Mason, R-Lisbon, would change the way funds paid into the state’s Regional Greenhouse Gas Initiative Trust Fund are distributed.
About 15 percent of the trust fund, estimated to grow in value to $20 million by 2017, is returned as rebates to business ratepayers. Mason’s bill would increase the rebate amount to 55 percent by 2017.
The fund is financed by a carbon auction system that requires energy producers in nine Northeastern states to pay for the fossil fuels they burn to create electricity. It was established in an attempt to reduce the region’s consumption of fossil fuels and, in turn, reduce the output of climate-warming greenhouse gases.
The bulk of the funds in the trust now go to the Efficiency Maine Trust, which redistributes the funds in the form of rebates or grants for homes and businesses that make energy efficiency improvements. Opponents to changing the distribution of funds argue the rebates when spread out over all the largest consumers of electricity in Maine would be relatively small, as little as $30 a year. But the investments made in efficiency have a higher value and payback ratio of more than 2-to-1 over time.
Likewise, Thibodeau’s bill to cap rates at 10 cents a kilowatt hour by suspending the renewable portfolio standard has seen opposition from environmental groups.
Thibodeau’s bill seeks to only temporarily suspend the portfolio standard if a standard offer rate rises beyond 10 cents a kilowatt hour. Opponents said that would create uncertainty among investors in renewable energy production.
“Investors in generation must plan for the long term and deal with a variety of market risks and uncertainty,” Dylan Voorhees, the clean energy project director for the Natural Resources Council of Maine wrote in testimony to the committee. “This bill would add uncertainty by introducing the possibility — however remote — that the RPS will suddenly be suspended for reasons beyond the control of investors or generators.”
But Central Maine Power also offered support for the bill last April.
“The Senate president raises an important issue, there has to be a way to restrain prices and renewable energy certificates from artificially raising electric prices that are not tied to the cost of generation,” said Joel Harrington, a lobbyist testifying in behalf of Central Maine Power.
The committee is scheduled to begin taking votes on the bill or amendments to it starting at 2 p.m. Tuesday.
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