Maine’s current energy policies create opportunities and jobs for Maine businesses


October 17, 2012

Gov. Baldacci in 2006 talking with paper company officials on how to help their company diversify by producing energy from waste, saving and making them money. photo by Ramona du Houx

By Ramona du Houx

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 Regional Renewable Portfolio Standard (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.

Additionally, the LEI report found that many of the state’s largest consumers of electricity, pulp and paper mills, had repositioned their assets to capitalize on the revenue available to them from renewable energy policies. But Gov. Paul LePage wants to restructure the RPS. Changing the rules in the middle of the game would strongly discourage this type of reinvestment.

The LEI report was commissioned in response to a request from the Legislature. Upon review of its findings, the Legislature rejected attempts to eliminate or weaken the RPS.

In a statewide poll last year, Maine Citizens for Clean Energy found that about 75 percent of Maine residents supported a ballot initiative to increase the RPS to a 20 percent mandate of electricity from utilities to come from renewable sources.

But recently LePage touted the study, The Economic Impact of Maine’s Renewable Portfolio Standard, conducted by the Maine Heritage Policy Center, an ultra-right-wing conservative think tank, and the Beacon Hill Institute for Public Policy Research. This report criticizes Maine’s RPS system started under Gov. John Baldacci.

“This study shows that special interests are hurting Maine’s economy and costing us jobs,” said LePage.

He thinks the RPS is too much for residents to pay. Under current law, the average Maine resident pays 37 cents on their monthly bill for the RPS program.

An analysis from last year found that from 2005 to 2010, the five states with the highest solar- and wind-power capacity (22.4GW) experienced a cost increase per kWh substantially below the national average. Moreover, the five states with the least amount of solar and wind capacity (.001GW) experienced a higher cost increase than states with considerable renewable energy capacity.

Advocates of the RPS say the price will diminish over time with more alternative energy sources coming online.
The LePage gamble over the RPS —

LePage has made it clear that he wants to change or even abolish the RPS for Maine. By doing so he’s risking ten years of alternative-energy growth, where the RPS has been its foundation.

LePage is also gambling jobs in the forest industry.

“Not only are we producing clean energy for our state; we are helping other New England states meet their own renewable standards by exporting energy produced here to neighboring states via the electricity grid,” stated Bob Cleaves, president and CEO of the Biomass Power Association. “Biomass alone represents more than 1,000 good-paying jobs in Maine today. We shouldn’t be leading the way in ending RPS policies when they are supporting jobs here at home.”

Forests cover about 90 percent of Maine.

“The biomass and forestry industries have a sort of symbiotic relationship; biomass purchases the materials left over from harvesting wood to keep forests healthy and to make paper and other products. Eliminating the RPS would likely have negative consequences for both industries,” said Cleaves in a Bangor Daily News op-ed.

In Maine we have allocated reasonable funds to aid the sustainability of our natural resources, by encouraging viable, renewable-energy sources with RPS standards.

The result of removing or even decreasing the RPS will be an increase of the use of fossil fuels for electricity, primarily from natural gas, the source of energy LePage continues to promote. One big problem: he hasn’t developed a plan for natural gas to reach many rural towns in Maine that are hundreds of miles from a pipeline.

These areas need energy resources that are local, available, and help their own rural economy, like biomass, wood pellets, wood, wind, and solar.

The current RPS has been successful in diversifying Maine’s energy sources.

Corinth Wood Pellets in 2007 was recognized as the premier wood-pellet manufacturer in the state. The company put Corinth, a town of less than 3,000, on the map selling wood pellets throughout America. Three other Maine wood-pellet manufacturing companies in Strong, Athens, and Ashland recently received funding from the U.S. Department of Agriculture to encourage the production of advanced biofuels from waste products. All these companies are helping their local rural economies.

The University of Maine’s new Technology Research Center (TRC) facility and equipment were capitalized in 2009 with a $4.8 million grant from the Maine Technology Asset Fund (MTAF), which was started by the Baldacci administration. TRC connects private industry with UMaine researchers in the Forest Bioproducts Research Institute, in order to help commercialize developing biofuels and advanced material technologies from forest bioproducts at an industrially relevant scale. The center converts wood chips, grass, and other biomass into fuel and plastics. A new process developed at the University of Maine for creating biofuel from wood wastes will be studied further at TRC.

The goal of the center’s research is to make these products commercially viable as alternatives to petroleum-based products.

“TRC is an exciting step forward for new technologies that have the potential to revitalize Maine’s economy,” said U.S. Rep. Mike Michaud, during center’s opening in Old Town. “The research and production performed here not only have the potential to create new economic opportunities, but to help Mainers reduce our dependence on foreign oil.”

Without Maine’s renewable energy goals, bonds, and the RPS, the TRC facility may never have happened.

Maine supports an “all-of-the-above” energy strategy, as President Obama does, because it helps keep our natural resources sustainable and creates jobs throughout the state.