Former Maine Public Advocate Urges Policymakers Give “Greater Attention” to Investments in Energy Efficiency and Generation Distribution

Stephen Ward sees “no magic bullets” for solving Maine’s energy dilemma in the decade ahead
Augusta, Maine (Thursday, October 21, 2010)—Writing on behalf of the Maine Center for Economic Policy (MECEP), former Maine Public Advocate and current member of the MECEP Board of Directors, Stephen Ward argues in “No Magic Bullets: Energy Policy for Maine in the Next Decade” that “close-to-home investments” offer the best hope for reducing Maine’s energy costs in the short term. 

“Close-to-home investments in energy efficiency and distributed generation confer immediate benefits and warrant greater attention from policymakers in Augusta and Washington,” Ward writes.  “These include undertaking the weatherization of oil-heated buildings funded by a surcharge on oil bills, to be managed by the Efficiency Maine Trust. Maine could also offer incentives for solar arrays that heat hot water at a considerably lower cost than the transmission investment necessitated by new on-shore wind projects. Such efficiency and solar projects create no air pollution or greenhouse gas, reduce the import of fossil fuels and confer clear benefits on Maine’s economy.”

“Energy efficiency measures costing 3 cents per kilowatt-hour make much more sense than on-shore wind projects costing 10 cents – plus another penny in rates for the necessary transmission investment,” Ward adds. “And we should continue to look at small and targeted opportunities for energy investments within the broad context of restructuring, preserving cost reduction and energy reliability.”

Ward notes that continued association with Independent Service Operators-New England (ISO-NE), created in 1997, has made it more difficult for Maine ratepayers to realize the low costs of wind, tidal or biomass generation produced in Maine.  ISO-NE manages electricity markets for the region as a whole, based on hourly generator bids.  Ward further asserts that Maine’s continued participation in ISO-NE to safeguard the reliability of the region’s energy grid also precludes establishment of a state sponsored power authority with the capacity to sell electricity below market rates.

“Many proposals for driving down Maine’s energy costs require significant investment in new transmission lines that ratepayers will have to absorb in their monthly utility bills,” Ward writes.  “Although such investment would bring spin-off benefits of employment and spending in Maine’s economy, very few projects will actually lower prices for retail consumers and, given current economic conditions and a near-term surplus in generating capacity, are unlikely to attract the necessary financing to become a reality.” 

Ward emphasizes significant progress since the 1990s when Maine’s power rates were 50% above the national average.  Citing the restructuring of the state’s electric industry beginning in March 2000, he notes that Maine power rates today are closer to 20% above the national average and are consistently the lowest in New England.

“While it is easy to state the goal of lowering Maine’s energy costs, it is very hard to make sustained progress,” Ward concludes. “This is because no magic bullet has emerged in the form of new technologies or industry models. Even if it did, it would be implemented nationwide, causing no change in Maine’s relative position to the national average. Also, learning from history, we should not risk placing Maine’s Legislature and PUC in the unenviable role of out-witting global energy markets.”

Stephen Ward served as Maine’s Public Advocate from 1986 to 2007 under four successive Governors, representing the interests of utility customers at the Maine PUC, FERC, the FCC, the Maine Legislature and Congress. Ward was President of the National Association of State Utility Consumer Advocates from 2000 to 2002. He currently serves on the board of the Maine Center for Economic Policy.