Maine’s Renewable Energy Portfolio Standard – an incentive for alternative energy growth

LePage's attacks on Maine's Renewable Energy Portfolio Standard could harm alternative energy growth

January 11th, 2013 · Filed under: Business & Innovation, Energy Issues, Environment, Issues, Maine's green energy potential · No Comments

Efforts by Gov. Paul LePage’s administration to rework the state’s renewable energy portfolio standards (RPS) could do more harm than good because the RPS acts as an incentive for producers of alternative energy.

Some paper companies have installed biomass to produce electricity and stem so they can sell their excess electricity to Maine’s market, and make a profit. Solar Thermal Electric, Photovoltaics, Landfill Gas, Wind, Hydroelectric, Geothermal Electric, Fuel Cells, Municipal Solid Waste, CHP/Cogeneration, Tidal Energy, Fuel Cells using Renewable Fuels, and other Distributed Generation Technologies that also produce excess energy can do the same, with the current RPS.

Bill Cohen, Verso Paper Corp.’s manager for mill communications and regional government affairs, said his company is hoping to refocus the energy debate at the Legislature in 2013. Verso installed a biomass power plant that produces electricity and steam for its paper mill in Bucksport with the help of Maine Maine Technology Institute bond money and federal grants. The Verso plant, which can produce 25 megawatts of energy, has become a model for other paper companies in the state.

“Last session it got quite contentious because he (LePage) was very specifically concerned about the renewable portfolio standard and that has a tremendous impact on Verso,” Cohen said in the Sun Journal article. “Basically, we hadn’t even finished a $42 million investment and he was trying to take away some of the rules by which we had made that investment.”

Verso never would have made the investment without the RPS incentive.

A spokesperson for the LePage said that lowering the cost of electricity in Maine has been a key focal point for the LePage administration because it is one of the biggest concerns for businesses here and businesses considering moving here. That ironically was the exact concern shared by Governor John Baldacci whose administration, with the legislature, enacted amendments to strengthen the RPS. Baldacci saw different avenues to the same goal, and by all accounts the RPS is beginning to meet that goal.

In 1999, Maine’s Public Utility Commission (PUC) adopted rules requiring each electricity provider to supply at least 30 percent of their total electric sales using electricity generated by eligible renewable and certain energy efficiency resources. Actually, at the time of passage, the required percentage of renewables was actually lower than the existing percentage supplied.

The RPS was designed to attract alternative energy initiatives and businesses to the state so Maine’s dependency on oil would diminish. Businesses that use alternative energy sources lower their manufacturing costs by saving on energy costs. Over the past ten years Maine’s fossil fuel dependency has lessoned by 10 percent. The RPS has helped that transformation.

The RPS allows all renewable energy facilities that generate less than 100 megawatts of energy to be eligible for inclusion in the portfolio. The standard also carves out an exemption that allows all wind projects, even those over 100 megawatts, to be eligible.

But because the renewable portfolio standard only accounts for about 3 percent of the total price of a kilowatt-hour in Maine, eliminating it would stymie Maine’s alternative energy producers. The actual electricity savings to consumers by eliminating the RPS is minimal.

The Maine Renewable Energy Association (MREA) — whose members sustainably manufacture electricity from biomass, hydropower, wind, waste-to-energy, and tidal — recently highlighted a study, “MPUC RPS Report 2011 — Review of RPS Requirements and Compliance in Maine,” completed for the Maine Public Utilities Commission by London Economics International, LLC (LEI).

“This study helps articulate the importance of what a consistent and predictable state energy policy can provide for Maine in terms of economic and employment benefits,” said Jeremy Payne, the executive director of MREA. “We know there were those who questioned whether the costs outweighed the benefits, but the London Economics report makes it crystal clear how important this policy is to Maine’s economic growth. The LEI report showed us that Maine stands to see the creation of nearly 200 jobs per month over the next five years.”

The study found that RPS policies in Maine and New England will create 11,700 jobs in Maine over several years, while the cost of the RPS for consumers may reduce employment by 32–129 jobs. The gain far outweighs any losses.

In addition the RPS will lead to $1.14 billion of new investment in Maine, according to the report.

The study described how new renewable power and “investment in Maine renewable generation has the potential to be a meaningful contributor to the state’s gross state product” by two percent over several years.

“The fact of the matter is the renewable energy industry has injected a tremendous amount of investment capital into the state over the last 12 years — over $2 billion has been spent on Maine facilities. MREA members pay nearly $20 million annually in property taxes, and many of these projects are in rural Maine,” said Payne.

Maine’s business community has benefited from the RPS program with more than 300 businesses having worked to construct, support, and maintain the state’s existing renewable energy assets. Reed & Reed even started a new division of their construction business specializing in erecting wind-farm turbines.

When more alternative energy sources become available to Maine consumers, electrical energy prices could go down as renewables are sustainable and reliable. Oil is a diminishing resource that fluctuates in price dramatically.

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