Sides line up in renewables debate
Source: Maine Public Utilities Commission
A referendum to double Maine's standard for new renewable electricity generation will not be on the ballot in 2012 — but the battle lines are already forming for its likely appearance next year.
A coalition of business, environmental, religious and labor groups known as Maine Citizens for Clean Energy began gathering signatures in late October, knowing it faced a Jan. 30 deadline for submitting the 57,000 signatures it needed to qualify the measure for the ballot. The proposed referendum would accelerate Maine's existing renewable portfolio standards for new electricity providers from its current benchmark of 10% renewables by 2017 to 20% renewables by 2020. The standard covers only new sources. Maine already has a 30% renewable base in its electricity production, mostly from hydro. The proposal would also require utilities to make significant investments in efficiency.
A volunteer spokesman for the coalition, David Farmer, says organizers knew all along it would be tough to gather signatures in just three months. A press conference was canceled when it appeared there “might not be a comfortable margin,” Farmer says. Signatures remain valid for 18 month, so there's little question the campaign will succeed later, he adds.
Organizers were aiming to be on a ballot that's expected to include not only the presidential race but another attempt to legalize same-sex marriage. But Dylan Voorhees, clean energy director for the Natural Resources Council of Maine, says the main reason for haste was to get a new standard on the books quickly. “It takes a long time to ramp up new sources of electricity, and the sooner we get started the better,” he says.
While debate about the proposal has been relatively muted so far, it has acquired at least one passionate critic in Gov. Paul LePage. LePage celebrated the initiative's failure to gain ballot status as soon as it was announced. A few days earlier, at the Maine Real Estate & Development Association conference in Portland, LePage called the proposal “the single largest job-killer we've had in years,” and added, “This will destroy the state of Maine.”
Last year, LePage proposed freezing the renewable standard at the 4% level due for 2011, but failed to convince the Legislature to act.
At the Governor's Energy Office, Director Ken Fletcher doesn't echo his boss' flamboyant rhetoric, but says that in its first three years, the renewable requirement has brought additional costs of $8 million. This runs contrary to the administration's goal of reducing electricity costs across the board. “We can't ignore that there are costs involved, costs that will increase over time,” Fletcher says.
Fletcher refers to the draft report by London Economics for the Maine Public Utilities Commission as evidence for his contentions about renewable costs. The same report is cited by referendum proponents to back up their prediction that increased renewable production can create 11,700 jobs during a decade of construction.
Jackson Parker, president of Reed & Reed, based in Woolwich, which has built all of the state's industrial wind farms now on-line, sounds puzzled when asked about the governor's claim of job losses. “This is a major new industry,” he says. “Since construction started six years ago, there's been a $1 billion investment in Maine. No other industry can make that claim.”
Adding the 1,250 megawatts of wind capacity now on ISO-New England's pre-construction list, he says, could result in another $4 billion investment. “We strongly believe that renewable energy is a great opportunity for businesses, as well as the public,” Parker says. Referendum proponents also estimate a $1.1 billion increase in the annual gross state product.
Both proponents and opponents agree that the projections in the London Economics report factor in a wide array of circumstances, not the least of which are the future prices of competing fuels, such as petroleum and natural gas.
NRCM's Voorhees says that some of the dispute reflects the reality that any new generation source will have upfront costs before yielding long-term savings. Proponents say there would initially be a bump of about $1 a month in consumer bills, but there would be at least $8 a month in overall savings by the target date of 2020.
Fletcher says there's no way to regard that as anything more than a ballpark prediction: “We know costs went up initially. We can't say what's going to happen down the road.”
Voorhees says that when voters consider the measure, they'll need to realize that efficiency must be coupled with any new sources, which under the existing standard include hydro, biomass, solar, tidal, geothermal and wind. “Efficiency is still our cheapest source, about 3 cents a kilowatt hour,” he says.
LePage also claimed at the MEREDA conference that the process envisioned by the referendum “bypasses the Legislature, bypasses the governor.” He said, “State government will lose total control of rate-setting. It's going to be done by Efficiency Maine. Big, big problem.”
Voorhees says there would be no change in the existing system at the PUC, which must approve utilities' plans to bring any new sources onto the grid. “Renewable standards are commonplace today,” he says. In the rest of New England, only Vermont has yet to establish renewable standards “and the trend is toward increasing, not decreasing, them.”
Parker says he has little doubt Mainers will continue to embrace renewable generation that's based here, rather than continue fuel imports. “It will reduce the cost of electricity over time and improve efficiency. It will increase our tax base and our economic productivity,” he says, adding, “I don't understand why the administration won't acknowledge that.”
Looking at the balance between costs and savings, Parker says, “This is an enormous bang for the buck.” n
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