June 6, 2013

Ambitious energy bill moves forward in Senate

By Tom Bell tbell@pressherald.com
Staff Writer

AUGUSTA — An ambitious energy bill aimed at lowering Maine’s high electricity and heating costs is moving quickly through the Legislature with bipartisan support.

The Maine Senate on Thursday voted 28–7 to pass L.D. 1559, the Omnibus Energy Bill. The vote followed Wednesday’s initial unanimous support of the bill by the House. It faces further action in the House and the Senate.

The bill incorporates ideas from at least nine separate bills and would encourage the expansion of natural gas pipelines into New England, increase funding for energy-efficiency efforts and provide financial assistance to help low-income families switch to more affordable heating systems.

Energy interests have cheered the bill, hailed by Sen. John Cleveland, D-Auburn, on the floor as a “true compromise.” Tony Buxton, a lobbyist for large energy consumers such as paper companies, has called the bill “historic.”

“We were very pleased,” said Dylan Voorhees, clean energy director for the Natural Resources Council of Maine, after the vote. “Given the significance of the bill, I don’t think any of those votes were cast lightly.”

However, Gov. Paul LePage opposes the bill in its current form. After the Senate vote, Patrick Woodcock, his energy director, said he would veto the bill.

While it incorporates some of his ideas, he doesn’t like it because it doesn’t scale back the state’s ambitious wind power goals or lift the cap on renewable generators, an action he believes would open the door to cheaper hydro power from Quebec.

Before passing the bill, the Senate rejected two amendments from Sen. Edward Youngblood, R-Brewer, that would alleviate other LePage concerns, including a provision that allows Maine Public Utilities Commission, instead of the Legislature, to set the charge added to all Maine electric bills to fund certain efficiency and conservation programs.

Both the House and the Senate amended the bill to add an emergency clause requiring the approval of two-thirds of members in each chamber, the same threshold needed to override a possible veto.
The clause allows the bill to become law as soon as it is signed by the governor rather than 90 days after the end of the legislative session.

The bill, supporters say, would make Maine a player in the gas pipeline capacity market.

It authorizes the Maine Public Utilities Commission to enter into contracts for new gas line transmission capacity into New England, up to $75 million annually. A new gas line would allow Maine consumers to save $200 million annually on electricity costs, according to a committee analysis.

A company won’t build a pipeline unless it lines up capacity ahead of time, according to industry experts. To help a project move forward, the PUC would issue bonds to fund its share of a pipeline’s capacity.

Those bonds would be repaid by Maine electricity ratepayers, but that investment would be more than offset by lower electric rates driven by lower gas prices, according to the bill’s supporters.
L.D. 1559 already has caught the interest of gas companies.

On Monday, LePage met with Kinder Morgan, the nation’s third-largest distributor of natural gas. The company plans to bring gas to New England from the Marcellus shale formation, the country’s most productive natural gas field, located in Pennsylvania, Ohio and West Virginia and New York.

The pipeline would cross the length of Massachusetts and increase the volume of natural gas available for Maine, said Woodcock, who said the company met with LePage because it is looking for customers.

Woodcock said it’s unclear whether the project would qualify for support under L.D. 1559 because the project already is going forward. He said the bill is intended to foster the development of a new pipeline, not increase the capacity of a pipeline already planned.

The emergency clause is needed because gas companies are looking for Maine’s involvement now, said Rep. Barry Hobbins, D-Saco, chairman of the Legislature’s Energy, Utilities and Technology Committee.

The bill would change the mission of the PUC, which regulates utility companies. The PUC is now charged with ensuring that rates are “just and reasonable.”

It also would require the PUC to focus on strategies to lower energy costs, such as investing in cost-effective efficiency for electric and gas consumers.

The bill beefs up funds that Efficiency Maine uses for electricity conservation programs from $28 million over a two-year period to $44 million. The extra money would come from an $81.7 million settlement between the federal government and the utilities that owned the now-closed Maine Yankee nuclear power plant.

To help homeowners switch to more affordable heating systems, Efficiency Maine would get $6.6 million over two years from the regional auction on air-emission limits, known as RGGI.
The bill also would implement reforms to the Greenhouse Gas Initiative, which would lower greenhouse gas emissions in Maine and continue the RGGI program.

State House Bureau writer Michael Shepherd contributed to this report.

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