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November 27, 2012

Skeptics blast study making energy claims

Gov. LePage cited the report in an effort to change renewable-energy mandates in Maine, but critics say it was backed by fossil-fuel interests.

By Steve Mistler smistler@pressherald.com
Staff Writer

In September, Gov. Paul LePage cited a study that said Maine's renewable-energy mandate would cost electricity ratepayers $145 million and nearly 1,000 jobs by 2017. The study was immediately challenged for its conclusions, and now its motives are under scrutiny.

click image to enlarge

Maine Gov. Paul LePage

Gregory Rec / Staff Photographer

The Beacon Hill Institute at Suffolk University in Boston, which published the study, has received significant funding from fossil-fuel interests.

The Washington Post reported that the study has been used to bolster model legislation co-written by the conservative American Legislative Exchange Council and The Heartland Institute, a group that denies climate change, in a coordinated effort to repeal renewable-energy mandates in several states.

The Heartland Institute has also received funding from fossil-fuel interests, including ExxonMobil and Charles G. Koch and David H. Koch, the billionaire libertarians whose Koch Industries has substantial oil and energy holdings competing against renewable-energy companies.

Adrienne Bennett, LePage's spokeswoman, said Monday that the administration was unaware of the Beacon Hill Institute's backing from fossil-fuel interests.

Bennett said LePage supports any energy source that lowers costs for Maine ratepayers, including renewable sources.

"The real issue isn't who funded the study," Bennett said. "It's that renewable energy and wind energy is more expensive than other sources."

That point also is in dispute.

In 2011, LePage led an effort to freeze Maine's law that requires power companies to get a portion of their electricity from renewable sources, such as wind and solar power. The law, passed in 1999, requires that 30 percent of retail electricity sales come from renewable sources.

The requirement was increased in 2006, setting a goal of 40 percent by 2017.

Twenty-eight other states have similar laws, which supporters say are designed to jump-start the clean energy economy, lower carbon emissions from coal- and oil-fired plants and create jobs in rural areas.

Opponents, including LePage, argue that mandating renewable energy sources is a tax on ratepayers and contributes to Maine's high electricity costs.

The Republican-controlled Legislature balked at the governor's call to freeze the mandate and, later, to allow 100-megawatt hydropower to count toward the annual requirement. Hydropower under the 100-megawatt threshold currently count toward the renewable mandate.

Instead, the Legislature commissioned an independent study by London Economics International, a global consulting firm with clients in multiple energy sectors. That study ultimately dissuaded lawmakers from backing LePage's proposals.

The study showed that the renewable-energy mandate now adds one half of 1 percent -- 37 cents -- to each consumer's monthly electricity bill.

When the mandate hits its peak of 40 percent in 2017, the cost will increase to $1.72 per month, the study showed.

The report also said the mandate will lead to 12,000 permanent and temporary construction jobs and increase Maine's annual gross state product by $1.1 billion by 2017.

The governor has not backed away from the issue. He has talked about it three times in the past two months, first citing the Beacon Hill report in a press release in September, then raising the issue in a video address in October. On Saturday, he revisited the topic in his weekly radio address.

He didn't name the Beacon Hill study but said "studies indicate that Maine's current Renewable Portfolio Standards Law" ... will raise the cost of electricity in Maine by 8 percent over the next five years."

The Beacon Hill Institute's study was republished by the Maine Heritage Policy Center, a conservative advocacy group that used the findings to estimate the impact in Maine.

The two groups belong to the State Policy Network, the umbrella group for free-market organizations that attempt to influence policy-making in state legislatures.

The State Policy Network has also received funding from the Koch brothers, and has come under fire by progressive groups that say it is advancing an extreme conservative agenda while concealing corporate donors.

(Continued on page 2)

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