🔒Politics & Co.: Should utilities be allowed to lease electric heat pumps to customers?

The question of whether utilities such as Emera Maine should be allowed to lease electric heat pumps to their customers is proving to be as challenging for lawmakers as it was for the Maine Public Utilities Commission.

First, some background.

Last fall, the PUC rejected Emera Maine's proposal to install and lease heat pumps as a way of helping its low-income customers save on their heating bills. Although PUC commissioners found merit in Emera's overall goal, they ruled that under Maine's existing laws governing utilities any such leasing program should be handled by an affiliate rather than the utility itself.

LD 1558, “An act to make efficient electric heat pumps available to utility customers, including low-income customers,” sponsored by Rep. Martin Grohman, D-Biddeford, attempts to remove that legal obstacle and any others that might prevent utilities from doing so.

As noted by Verrill Dana lawyer Jim Cohen, speaking on behalf of Emera Maine at a Feb. 9 public hearing held by the Energy, Utilities and Technology Committee, Grohman's bill would clarify language in the 2013 Omnibus Energy Act limiting utilities to offering heat pumps only through a “pilot” program. Cohen said that since Emera Maine's pilot proved their effectiveness, that constraint is no longer necessary. The bill also would allow utilities to make heat pumps available to customers for a monthly equipment charge as a “non-core” service. Finally, he said, it adds “important consumer and market competition protections.”

“This bill is about expanding the number of Maine customers who can benefit from heat pumps,” he said in his testimony. “It is about Maine taking important additional steps toward energy independence, clean energy and energy price stability.”

But, just as the PUC found when it solicited stakeholder views on Emera Maine's heat pump leasing proposal last year, not everyone sees it that way.

“We strongly oppose the idea that the utility could be allowed to offer appliances, financing for appliances, or advertising of appliances through its core business,” testified Jamie Py, president of the Maine Energy Marketers Association, a trade association composed of 300 member companies delivering heating oil, biofuels, motor fuels, propane and kerosene and offering service and installations on the equipment that operates on those fuels.

“The bill seeks to allow a utility to enter the competitive market, thus opening a crack in the longstanding public policy and financial bargain that gives utilities a monopoly franchise, with guaranteed profits, in exchange for government oversight to prevent the utility from using its monopoly power in open and competitive markets,” Py told the committee.

Of the 13 other stakeholders who testified, eight supported the measure, two were opposed and three were neutral.

Not surprisingly, the Energy, Utilities and Technology Committee wasn't able to achieve a consensus at its Feb. 24 work session, with Reps. Beth O'Connor, R-Berwick, and Nathan Wadsworth, R-Hiram, voting that the bill “ought not to pass.” That means the bill, when it gets sent to the House and Senate for a vote, will be submitted with a “divided report.”

At press time, the committee continued to work on the bill's language. When the bill is sent to the House and Senate for final votes it will carry a majority report with the recommendation that it should be passed as amended, and a minority report recommending that it ought not to pass.

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