A recent decision by the Maine Public Utilities Commission (PUC) severely limits energy efficiency funding in the state. If the decision stands, Efficiency Maine Trust – the public entity that runs energy efficiency programs – would see its near-term budget cut from about $60 million to $22 million. This drastic cut in energy efficiency funding would essentially eliminate the cornerstone of sound energy policy in Maine. Fixing this mistake is vital to the state’s energy future.
The fix is easy (the entire fiasco boils down to the single word “and”), but the backstory is more complicated.
Energy efficiency works
The more energy consumers use, the more energy must be generated. Whether that energy comes from coal, natural gas, or renewable sources, the cost to generate that energy goes beyond the dollar figure on your utility bills. Part of that cost is sunk into the generation facilities themselves, and part is in the poles and wires needed to bring that energy into our homes and businesses.
Energy efficiency has the power to reduce the overall demand for electricity by encouraging technological advancements that produce the same service while using less energy. Less overall energy use means less transmission and distribution build out, less energy generation, and, ultimately, a lower energy bill for consumers.
Energy efficiency saves ratepayers money, improves the environment, stimulates commerce, and creates jobs. Since 2011, Efficiency Maine has saved ratepayers almost $1 billion in lifetime energy savings while creating thousands of jobs. Over their lifetime, the projects Efficiency Maine helped install in 2014 alone will save more than 1 billion kilowatt hours of energy consumption – the equivalent of more than 22 million gallons of oil. This translates to nearly $200 million in ratepayer savings. Every dollar Efficiency Maine invests provides at least three dollars in return.
All this raises a pressing question: Why would the PUC slash funding for energy efficiency?
How we got here
In 2013, the Maine Legislature passed the bipartisan Omnibus Energy Act. One piece of this legislation mandates that Maine, through Efficiency Maine, fund and pursue all maximum achievable cost-effective energy efficiency.
Let’s be clear – that is the law.
A single phrase of this voluminous statute determines how much annual funding Efficiency Maine receives to meet (or not) the law’s mandate. This funding, which is included in electricity rates, is capped at “4% of total retail electricity transmission and distribution sales in the State.”
The current fiasco all boils down to what “total retail electricity transmission and distribution sales” actually means. If you find that phrase confusing, you’re not alone. For those working in the electric industry, “retail electricity” sales mean sales of electricity generation. And “transmission and distribution” sales mean sales of the transmission and distribution of electricity. But mashing them together creates a phrase not used anywhere in Maine law, or in any other law in the country.
The problem stems from a missing “and.” The phrase as originally drafted by the legislature was: “total retail electricity and transmission and distribution sales.” That phrase means something. So what happened to the “and”? No one knows. But somewhere along the line, without any discussion, debate, or request, it disappeared from the final version of the bill – after a legislative committee approved a version containing this critical conjunction.
A matter of interpretation?
So, what does the PUC have to do with this? The 2013 Omnibus Energy Act directs the PUC to make a rule that interprets this phrase and thus the amount of energy efficiency funding. In making this rule, the PUC must follow what the legislature intended when it wrote the law. If what the law says is clear, the PUC need look no further than the text. But if the law is not clear, the PUC looks to the bill’s legislative history to determine what the legislature intended the law to mean.
As it turns out, the only people who have found that confusing phrase absolutely clear are two out of three PUC Commissioners. They read the language to include sales from only transmitting and distributing electricity, not sales from generating the electricity. That reading translates to a huge difference in how much money goes toward Maine’s energy efficiency initiatives – a $38 million difference.
Even as written – in other words without the “and” – the PUC got this wrong. The only thing that’s clear about the phrase is how unclear it is. That means the PUC must look to the legislative history to see what the legislature intended. And no one – not even the legislators who drafted the bill – disputes that the legislature intended much greater funding for energy efficiency by including sales from both electricity generation and electricity transmission and distribution.
Frustrated yet? There’s more.
The Maine Legislature now has the opportunity to fix the PUC’s decision. Doing so would save Maine ratepayer dollars. Unfortunately, as the Portland Press Herald reported recently, prospects for an easy legislative fix look dim.
Remember, the 2013 Omnibus Energy Act, which mandates energy efficiency measures, passed with bipartisan support. Legislators have introduced an amendment to the Energy Act that simply reinserts the word “and” – as the legislature originally intended.
But other lawmakers are trying to block this version. In an op-ed in the Portland Press Herald, House Minority Leader Kenneth Fredette (R-Newport) admitted that the Energy Act was intended to increase the funding cap to “roughly $60 million” instead of the roughly $22 million under the PUC’s interpretation. Nonetheless, he claims that the PUC correctly interpreted the law it was given, mistake and all.
What Representative Fredette and other lawmakers are now arguing is this:
- Yes, the Energy Act meant to increase energy efficiency funding.
- Yes, the PUC interpreted it to severely limit this funding.
- Yes, we the legislature should fix this.
- But NO, we are not going to simply insert a single word in order to do what a bipartisan legislature intended in the first place when it passed the law.
Why not? Governor Paul LePage. He is almost guaranteed to veto a fix of the bill because he does not want to invest more in energy efficiency. The legislature might not garner the two-thirds vote needed to override that veto, let alone pass the amended version in the first place.
What’s the alternative? A bill that compromises further on sound energy policy in Maine. To be clear, the original Omnibus Energy Act was itself the result of bipartisan compromise – which was meant to vastly increase energy efficiency funding. Now, because of one word, the governor and Republican legislators want another bite at the apple.
Tell your legislators to pass the clean fix of the bill and restore Maine energy efficiency funding! You can find your legislator’s contact information here. Help restore adequate funding for energy efficiency in Maine!