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Maine Legislature Mulls Reducing Electric Rates for C&I Customers

January 18, 2016 By Cheryl Kaften

A bill (LD 1398) that would reduce the rates paid by Maine’s commercial and industrial electricity customers failed to gain traction at a session of the state legislature’s Joint Standing Committee on Energy, Utilities, and Technology on January 7.

Sponsored by Sen. Garrett Mason (R-Lisbon), An Act To Reduce Electric Rates for Maine Businesses would increase rebates to businesses from the state’s Regional Greenhouse Gas Initiative (RGGI) Trust Fund, retroactive to 2015-2016 and going forward through 2018-2019.

The RGGI is a cooperative market-based effort among nine states – Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont – to reduce carbon pollution from power plants and spur investments in energy efficiency and renewable energy. The trust fund is financed by carbon auctions that require participating energy producers to pay for the fossil fuels they burn to create electricity.

Currently, about 15 percent of the trust fund – estimated to grow in value to $20 million by 2017 – is returned as rebates to commercial and industrial ratepayers, according to the Maine Sun Journal. Sen. Mason’s new legislation would increase that rebate amount to 55 percent.

“I constantly hear that our electricity prices — the 12th highest in the country — make it difficult to continue to operate in our state, hire Mainers, and grow our economy,” Sen. Mason told the Sun Journal. “From the paper industry to mom-and-pop stores, too much is being spent to keep the lights on and the businesses operational. Lawmakers must step up and take action to provide relief. This bill is one way to do so.”

However, environmental advocates, including the Natural Resources Group of Maine, oppose LD 1398, on the grounds that less money would be allocated to energy efficiency projects, with funding cut from 50 percent to 10 percent; and that the amount that would be rebated without specific mandates (except to use the funds “in a manner that provides maximum benefit to the Maine economy”) would rise from 15 percent to 55 percent.

The group has distributed materials panning the legislation, saying “This bill goes in exactly the wrong direction, if one is concerned about lowering energy costs for businesses. Maine’s RGGI-funded energy efficiency programs are extremely cost-effective and have been demonstrated to provide substantial economic benefits to the state. As of December 2013, Maine had invested $31 million of RGGI funds through Efficiency Maine initiatives, and generated $257 million in lifetime energy savings. Roughly 70 percent of those funds have gone to large and small businesses through programs that leverage substantial private investment from the participating businesses. For example, $12 million (out of the $31 million) leveraged $35 million in private investment at Maine’s largest energy consuming facilities.”

The bill will stay in committee for the next few weeks, until a decision is made whether to debate it on the full legislature floor.

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