Renewable Power Standards Face Uncertain Future
A consumer subsidy for renewable power in Maine may be ending — or at least changing. It’s called the Class 1 Renewable Portfolio Standards program, and many stakeholders, including environmentalists, say it’s ready for reform.
Your electric bill pays for a lot of things: the electricity itself, the poles and wires that get it to your house and some extras, such as assistance for low-income electricity users and renewable energy. That last charge allows electricity generators powered by solar, wind, hydro or biomass resources to get a little extra when they sell that electricity onto the power grid, or even when they use it themselves.
The renewable portfolio charge amounts to roughly 2 percent of a typical electric bill. For the past nine years, most of it went to boost payments for new renewable resources, called Class 1 renewables. Lawmakers required that by 2017, 10 percent of all electricity sold into Maine come from new renewable resources or, in some cases, from substantially revamped, existing renewable systems.
“It probably has helped to support some investment,” says Tim Schneider, the state’s public advocate.
Schneider says the RPS program has helped some biomass generators stay in business. But the value of the credits renewable generators receive can vary wildly, he notes, depending on just how much renewable energy is available in the region at a given time. That volatility, says Schneider and others, means that banks or other investors will not recognize the RPS program’s value when deciding whether to finance a big renewable project.
“I think when people first passed this, if you look at the list of technologies that it’s supposed to support, this isn’t helping new wind get built in Maine, it isn’t helping new solar get built in Maine,” he says. “That’s probably what people intended when they passed this in the first place.”
In recent years, the Legislature has turned back efforts by Gov. Paul LePage and others to revise or even eliminate the Class 1 RPS program. That ongoing effort, though, could gain additional momentum in the next legislative session because the statute that authorizes the program makes no mention of whether it should continue beyond 2017.
Although state regulators on the Public Utilities Commission created a rule, back in 2007, that envisions the program continuing indefinitely, lawmakers such as House Republican Leader Ken Fredette are asking, so what?
“Well let’s be very clear. The PUC does not set policy, the Legislature sets policy. So in regards to any rule, I find it almost offensive that the PUC would add a sentence that would suggest that it would go beyond the legislative intent,” he says.
Democratic leaders seem to be resigned to a new debate over the program, but they may try to turn it toward discussion about better ways to incentivize renewable energy generation.
“You know, maybe this does present us with an opportunity to look at, how should we modernize?” says state Rep. Sara Gideon, the Democratic speaker of the House.
Gideon says Maine should consider joining other New England states in seeking joint, long-term contracts for renewable energy — contracts that could prove more effective in providing the stability that the financial world wants when making loans for the construction of wind or solar projects, or transmission infrastructure needed to serve them.
“Is this an opportunity to think about regionalization, to work maybe with our other New England states, see if we can sort of think about what our next definitions of renewables are in a way that continues to grow renewables overall?” Gideon says.
And in contrast to other years, environmentalists appear ready for the debate too.
“I think there’s plenty of room for our RPS to be more effective at accomplishing the goals of incentivizing new, renewable generation that is creating local economic benefits and more energy security,” says Dylan Voorhees, energy director at the Natural Resources Council of Maine.
But while each side spars over the cost, effectiveness and even the necessity of programs that encourage renewable energy, it does seem likely that both will try to attend to the needs one beneficiary of the RPS in particular — the state’s remaining biomass generators, which are seen as essential to the survival of the beleaguered forest-products industry.