In new video Gov. LePage pans Maine's renewable energy portfolio

LEWISTON — In a new video, Gov. Paul LePage warns that energy costs in the Pine Tree State could increase enormously in coming years.

LePage also says in the video posted on the governor's website that elected officials have pushed a renewable energy agenda that depends too heavily on federal subsidies and one that will cost Maine millions of dollars and thousands of jobs.

"Energy in the state of Maine has a long ways to go," LePage says. "In the past several decades some of the wealthier, more politically well-connected individuals in the state have pushed an agenda that requires federal subsidies. Federal subsidies are paid for by ratepayers. So we have to find renewable energies that do not require subsidies."

LePage also suggests Maine could become an "intermediary" and a transmission pathway for low-cost electricity from Quebec that would then be sold to other states in New England.

"We can get competitive rates by purchasing large amounts of cheap hydro power from our neighbors to the north," LePage says.

In 2007, the Legislature passed a law requiring a 10 percent increase in the amount of renewable electricity produced here, adding 1 percent a year until 2017.

That law, known as the Renewable Portfolio Standard, also caps eligibility for renewable producers of energy — except wind power — at 100 megawatts of installed capacity per facility.

Critical of the law, LePage said the 100-megawatt cap ought to be removed.

"Right now, the only one that benefits from the 100-megawatt limitation is wind power," LePage said. "Wind power, wind power, wind power. So why don't we just remove the limitation on all alternatives, all options and let the free markets take over?" 

Lifting that cap would make larger hydro-power plants in Quebec and New Brunswick eligible to supply Maine with power deemed renewable, which Maine would then supply to the New England grid.

The plan, according to Kenneth Fletcher, director of the governor's Energy Office, is to make Maine a conduit to southern New England for inexpensive Canadian power. Maine would be able to tap into that lower-cost juice, helping drive rates down.

Fletcher said the high cost of electricity is often cited by business people as one of the barriers they face when thinking of expanding or relocating in Maine.

He and LePage acknowledge that Maine still enjoys the lowest-cost commercial and industrial power rates in New England.

"The point is, we are the lowest in New England, but New England is one of the highest in the country," Fletcher said. "That's not the only thing that drives economic development. There are other things . . . a whole group of things as to why the economy in certain states grows faster than others."

In 2011, for example, the 10 states with the fastest-growing economies were not the 10 states with the most affordable electricity.

Only four in the top 10 for economic growth were also in the top 10 for low-cost power, including North Dakota, Oregon, West Virginia and Utah, according to data available from the Energy Information Administration and the U.S. Department of Commerce's Bureau of Economic Analysis.

Four others in the top 10 for economic growth were also among the 10 states with the most expensive electric rates, including Connecticut, Alaska, Massachusetts and California. 

Maine has the 12th most expensive electricity rates in the nation.

LePage said he would like to see that ranking go to about 40th.

"I think that would be good; that would be competitive for us," LePage said. "This is one instance where being on top is not good."

Following a study of the issue by the Maine Public Utilities Commission, LePage tried to advance legislation in April 2012 that would have lifted the 100-megawatt cap, but the Legislature rejected it. 

That study completed by London Economics International, a Boston-based consulting firm, showed pros and cons of the state's policy on renewables. It notes costs and benefits, but also says it is not a cost-benefit analysis.

The study has been widely cited by those on both sides of the issue, with those opposed to rolling back the cap noting it will stymie the state's ability to build renewable-energy capacity and would kill jobs.

Among the pros is more than 11,700 construction jobs and more than $560 million of capital investment for Maine. Those estimates are based on conservative calculations that assume only half of the wind-power projects proposed for Maine would be built.

"These economic development benefits are cumulative for the $560 million of investment, but would in reality accrue over multiple years, given the likely staggered timing of this investment," the report states.

It also notes that the Renewable Portfolio Standard is likely to increase rates, which calculates to increased costs for Maine businesses and possible job losses, Fletcher said.

"In the same analysis, at the end, after you've constructed 625 megawatts, the estimated permanent jobs created is about 60 jobs," Fletcher said. The report also shows an increase in electric rates in Maine would translate to a decrease in real household income because more spent on power is less spent on other things in the economy, Fletcher said.

"Decreasing household income by $12 million would have a negative effect on gross state product and that could be 129 permanent jobs lost," Fletcher said.

The issue is likely to resurface when Maine lawmakers return to session in 2013. In his video, LePage urges residents to contact lawmakers about the issue.

"As a Mainer, if you think you are paying too much for energy, contact your legislators," LePage says. "Hold their feet to the fire. Make them tell you they will fight for lower energy costs."

sthistle@sunjournal.com

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Comments

Alice Barnett's picture

GREEN

RPS in Massachusetts causes Towns to buy WIND. at 10 cents a kwh. How much did HQ charge Vermont?

Thought for the day.
WIND sells to mandated renewable buyers in another area, miles away..working out at
9.92 cents per kilowatt hour. WIND signs an agreement stating to produce/sell an "X" amount of energy. If WINDs turbines cannot produce (and they work at about 8% efficiency in Western Maine), they make up the difference by purchasing strips from ISO-NE at around 4.5 cents per KwH. That's where the true scam comes in. Reselling non-green energy under the guise of wind produced.

Boston could claim to be one of the GREENEST cities on earth if they buy hydro.

Dan McKay's picture

Step No. 1 : Change the RPS

Step No. 1 : Change the RPS in Maine to allow hydro over 100 MW to be defined renewable
Step No. 2 : Watch as the other New England States do the same thing with their RPS
Step No. 3 : Good Bye to expensive wind.
Step No. 4 : All acts and laws favoring wind disappear.
Step No. 5 : We all win

Dan McKay's picture

One of the things brought up

One of the things brought up in the " London Economics International Study of Maine's Renewable Portfolio " is the ACP ( alternative compliance payment ). The electricity marketers who don't satisfy the RPS by purchasing REC ( renewable energy certificates) must buy ACPs from the Maine Public Utilities Commission. The study indicates the ACP reflects the ceiling price of RECs, and should be set at a price that would hand over renewable developers enough investment funds to multiply such development. This is clearly the complete opposite of how a free market system works and ends up penalizing the ratepayers with higher costs. Allowing systems like this into the realm of " making a living " or what we, the average Joe, does to get by, opens the door to the destruction of the principles that made this country great and is not a burden anyone should have to bear. Putting all renewables on a level playing field only makes sense, for the Maine PUC who oversees that the electric rates are reasonable, and, mostly, for all of us buying electricity.
And if you think Southern New England has an adversity to Canadian Hydro, they actually imported over one million megawatt-hours worth of it last August.

Penny Gray's picture

Thank you, Scott Thistle, for

Thank you, Scott Thistle, for reporting comprehensively on a subject of importance to all Mainers. The Portland Press Herald could certainly take some lessons from you. Governor LePage is correct about the RPS potentially crippling Maine businesses and hurting Maine ratepayers. The 100 megawatt cap on hydro should be removed.

Steve  Dosh's picture

In new video Gov. LePage pans Maine's renewable energy portfolio

all 12.10.18 ? 3 pm EST •
Is this the Governor endorsed by the Sierra Club ?
A: ______________ <-
/s Steve

CLAIRE GAMACHE's picture

Cheap energy

I'm not sure what the difference would be between a governor who promotes the wind industry and makes money from it after he leaves and one who promotes the natural gas industry having received campaign support from the Koch brothers. I can understand that one guy believes wind will be a source of energy for the future and another who things cheap gas energy from frackering will provide needed cheap energy now. They are both right in that cheaper energy is the path to prosperity. One is looking at the future and the other is looking for a quick fix now. Both prospered personally and nothing is more heavily subsidized by the federal government than the gas and oil industries so no tax savings there at all. As for the cheap Canadian electricity issue, all the recent Maine governors have pursued that option. It sounds great except that Canada has blocked it each time by refusing to sell their electricity cheaply. So far they have wanted to charge more than the existing sources dashing everyone's hopes. Time will tell if they have changed their policies but I have to wonder why no one has negotiated this with them before coming out with this announcement.

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