What the Regional Greenhouse Gas Initiative is Doing for Maine

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Harrison Horning Director of Energy and Facilities for Hannaford Supermarkets, described the company's commitment to energy efficiency and Efficiency Maine at a news conference about the Regional Greenhouse Gas Initiative photo courtesy of Natural Resources Council of MaineOn September 3, 2014, businesses and energy leaders gathered with the Natural Resources Council of Maine (NRCM) in Westbrook to celebrate the success of the Regional Greenhouse Gas Initiative (or RGGI). The multistate program to limit climate-changing carbon pollution from power plants achieved a milestone as the 25th auction of “carbon permits” took place.

These permit auctions are the centerpiece of the program and provide about $10 million per year for Maine to support energy efficiency initiatives for homes and businesses. Supporters of RGGI released two newly-published case studies that illustrate how these energy efficiency funds are cutting energy bills for Mainers, and improving the overall economy: one from Hannaford and one from a Brunswick homeowner.

“Maine should be proud of the phenomenal success RGGI has been for the state, and the decisions we’ve made to invest in our economy and our clean energy future,” said Dylan Voorhees, Clean Energy Director for NRCM. “Maine’s experience with RGGI shows clearly how we can slash carbon pollution while growing the state’s economy, having turning $30 million in smart energy efficiency investments to-date into $250 million in energy savings.”

“Energy-saving projects that Hannaford has completed in partnership with Efficiency Maine have cut our electricity use and reduced our carbon footprint substantially,” said Harrison Horning, Hannaford’s Director of Equipment, Purchasing, Maintenance and Energy. “When we reduce our energy use, everyone benefits – the environment, our company, and our customers.”

Auction 25 resulted in $2,453,386 in revenues for the State of Maine. The previous quarterly auction was held in June and generated $2.5 million for Maine, equivalent to about $10 million per year. By Maine law, the vast majority of RGGI proceeds are used to support efficiency improvements for Maine homes and businesses, administered by Efficiency Maine.

As of December 2013, Maine had invested more than $31 million of RGGI funds on efficiency programs and grants for homeowners, businesses, and industry. These investments save Maine homeowners and businesses $257 million over the lifetime of these efficiency improvements, according to a report released by NRCM using information from RGGI, Inc. and Efficiency Maine. (An additional $22 million in RGGI funds has been received by Efficiency Maine as of August 2014, and was committed for efficiency programs and large custom projects that are either ongoing or for which the final results have not yet been compiled.)

The largest portion (40%) of RGGI funds spent so far has gone to Efficiency Maine’s Large Customer program, which provides competitive matching grants to businesses that are among Maine’s largest energy consumers to invest in a wide variety of efficiency projects. As of December 2013, $12 million of these grants had leveraged $35 million in private spending at Maine’s industrial and other large facilities, and generated $139 million in lifetime savings.

The NRCM case study released with Hannaford Supermarkets illustrates the results of one such project. Other recipients include Huhtamaki, Jackson Labs, the Lewiston-Auburn Water Pollution Control Authority, Madison Paper, Maine Wild Blueberry, Mt. Abram Ski Area, SAPPI Paper, Sugarloaf, Twin Rivers Paper, and the University of Maine.

Hannaford used its two RGGI-funded grants to complete lighting retrofits in refrigerated areas in its distribution center and in display cases at 10 grocery stores. Inefficient lighting creates heat, which increases electricity and cooling costs. The new ultra-efficient LED lights in these facilities will save Maine’s largest employer about $200,000 in energy costs every year.

“We design and install high efficiency lighting retrofits,” said Steve Grimshaw, President of Lighting Solutions, Inc., which completed the Hannaford distribution center project. “The incentives offered by Efficiency Maine play a pivotal role in encouraging our customers to say ‘Yes’ to executing a lighting retrofit project. These incentive programs are accelerating the adoption of high-efficiency lighting technology, which is expanding our business opportunities in the state.”

In June of 2013, the Maine Legislature overrode a veto from Governor LePage and passed the “omnibus energy bill” into law. This law made several changes to the RGGI program, including an adjustment that significantly reduced allowable pollution levels (i.e. reducing the amount of carbon permits available). Another change directed Efficiency Maine to use 35% of RGGI funds for home energy efficiency efforts aimed at reducing heating oil and other fuels. That program (a re-vamp of a temporary federally funded program in 2009-2010) started in September and has already helped more than 5,000 homeowners.

A second case study released by NRCM described a home efficiency project by Brunswick resident Emily Vail, completed by family-owned contracting company Upright Frameworks. Vail’s 1950’s cape got new insulation and air sealing to reduce oil bills and make the house much more comfortable. The $7,000 project (less $1,500 thanks to Efficiency Maine and RGGI) reduced her household energy use by 30%.

“We do about 100 projects like this every year, and we are always happy to make homeowners more comfortable in their homes,” said Josh Wojcik, founder of the family-owned Upright Frameworks. “The news of the rebates definitely draws customers in. We would take the brakes off our company’s growth if we really knew that the program’s funding would be consistent over time, and it’s finally starting to look that way in Maine.”

Independent analysis has shown RGGI to be a clear net gain for the economy of individual states and the region as a whole.

“RGGI has proved to be effective not only in protecting the environment that makes Maine special, but also in strengthening the economy,” said Colby College’s Mitchell Family Professor of Economics, Emeritus Tom Tietenberg. “From an economic perspective, joining RGGI has turned out to be one of the best policy decisions Maine has made in the last decade.”

RGGI has been operating in Maine since 2008, having won bipartisan support across the region and in the Maine Legislature in 2007. It is the only regional program—and the only program outside of California—that sets mandatory global warming pollution limits for power plants. The program requires large fossil-fuel power plants to hold a carbon permit for every ton of carbon pollution they emit, but does not specify how much individual power plants can emit. Instead, the states auction a fixed number of carbon permits and let the market determine which plants will emit how much carbon pollution.

RGGI gained additional importance this year when the U.S. EPA proposed the first ever national limits for global warming pollution from power plants. The EPA specifically recognized RGGI as a model for how to cut carbon from power plants while enhancing the economy and reducing energy costs. The EPA also created flexibility options to allow states to use RGGI (or similar approaches) to meet the new national limits.

“Maine’s leadership in adopting RGGI is paying big dividends,” said Voorhees. “Not only is the program helping support energy-saving efficiency programs that grow our economy, but it puts us in a great position to meet the EPA’s climate rule right out of the gate. That’s good news for our climate and our economy.”

Download the reports here:
RGGI Report
Hannaford Case Study
Vail Homeowner Case Study

Photo: Harrison Horning, Director of Equipment, Purchasing, Maintenance and Energy for Hannaford Supermarkets, described the company's commitment to energy efficiency and Efficiency Maine with (L-R) Joshua Wojcik, Paul DuPerre, Dylan Voorhees, Tom Tietenberg and Steve Grimshaw. Photo courtesy of Natural Resources Council of Maine.

For further information contact: Judy Berk  at judy@nrcm.org or 207-430-0103 or mobile 207-462-2192

Natural Resources Council of Maine, 3 Wade Street Augusta ME 04330.

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