How Maine can Match its Energy Policy to its Energy Challenges

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On March 3, 2017, the Environmental and Energy Technology Council of Maine hosted a forum in Augusta, entitled, “Playing Matchmaker- Aligning Energy Challenges with Compatible Policies”. The forum addressed the following questions: What are the most important energy challenges facing the State of Maine? What problems are we trying to solve and how do policy makers craft solutions to address the most critical issues? Green Energy Maine was there and brings you this report.

BACKGROUND

Maine’s largest end-use for energy, and biggest consumption of oil, is in the transportation sector. Yet, we have no coordinated policy on reducing oil use or developing alternative fuels, vehicles, or infrastructure programs. Heating Maine’s homes and businesses is an annual challenge, yet we fret every winter to ensure that our most vulnerable stay warm. Maine also has the highest per capita energy usage in New England, but we don’t have a focused strategy for reducing oil dependence while increasing productivity. Maine’s businesses struggle to remain competitive with states that have lower electricity, transportation, and heating costs. On the other hand, policymakers are asked to consider dozens of proposals annually to incentivize renewable electricity generation and promote energy efficiency.

The speakers provided their thoughts on whether these are the best priorities, what real problems need to be solved, what our energy goals should be and how we can reach them. The panel was moderated by John Carroll of Avangrid.

Maine Public Advocate Timothy Schneider photo by Kay MannA 20-WORD ENERGY POLICY

After opening remarks by Lisa Smith of the Governor’s Energy Office (included in a separate report), the first panelist of the morning was Maine’s Public Advocate, Timothy Schneider.

Schneider began by citing LePage energy advisor Jim LaBrecque’s distillation of the current administration’s energy priorities into 4 points:

reduce reliance on oil
reduce carbon emissions
lower the cost of energy and
be technology neutral.

To summarize this policy in 20-words, “Maine should use any technology available to consume less oil and emit less carbon while keeping prices low and stable.” Schneider pointed out that there is consensus around this policy in most corners. The only areas that may be debated are how labor-intensive energy production must be and what its environmental impacts may be. He followed by elaborating on each of the four priorities.

Why should we use less oil? Maine is one of the most petroleum-dependent states in the nation with the highest per capita petroleum consumption in New England according to the Energy Information Administration (EIA). Geopolitical events can and do affect the price of oil and thus our pocketbooks.

Why should we emit less carbon?

Maine’s $600 million fisheries and other nature-based industries are being affected by carbon emissions. We cannot afford to sustain further damage to them.

Why have low & stable prices?

According to Competitive Energy Services, when you look at the efficiency of how different New England states convert MMBTU of oil into GDP, Maine is lowest and Mass is highest. Across the US, the average level is slightly higher than Maine.

Why should we be technology neutral?

This “neutrality” is sometimes used to bludgeon certain industries such as solar or hydro. When Arizona allowed all energy technologies to compete side by side, it opened space for innovation and energy storage came out nearly in first place.

The electrification of heating and transportation that is already underway will allow Maine to take advantage of its position as a net energy exporter. Increasing our state’s electricity load can help to mitigate transmission & delivery costs increases, by spreading it out more evenly. This may be achieved through new investments and transferring uses away from oil to lower cost, lower carbon resources.

This will only work if prices are kept low and stable, which will require partnering with other New England states. We have not been good at this in the past. There is good potential to find consensus with our neighbors on this policy.

Michael Stoddard Executive Director of the Efficiency Maine Trust photo by Kay MannTHE ROLE OF EFFICIENCY

The second panelist to speak was Michael Stoddard - Executive Director of the Efficiency Maine Trust. Stoddard began with a challenge: How will Maine energy customers prosper in a world of rising energy prices and low-carbon goals? His answer? By transforming their buildings, energy systems, equipment and vehicles.

He then called out some of the market barriers to achieving this:

the higher upfront cost of higher efficiency equipment (such as appliances);
limited local stocking/inventory of higher efficiency equipment;
limited familiarity with newer technology or understanding of comparisons between product models (example: lower purchase price of less efficient equipment not being compared to the lower operating cost of more efficient equipment).
old habits: contractors sometimes lean on older and more familiar equipment rather than responding to new opportunities to install more efficient equipment and
split incentives (eg landlord v tenant).

Heating, lighting and transportation are our top three energy needs. There are supply and demand sides to these markets. Efficiency Maine focuses on the demand side: increasing efficiency to reduce power consumption, use smaller systems, etc.

Stoddard identified the following key opportunities:

Improved home envelopes;
next generation heating systems;
heat pumps;
water heater heat pumps;
higher efficiency heating systems such as wood/pellet heat, next gen oil and propane systems;
transformation of electronics to control lights, appliances and HVAC smart systems and 
electrification of vehicles.

He then listed what he sees as being needed to transform the marketplace:

informed, motivated customers (because people don’t tend to fix what is working “OK”);
informed, trained, motivated vendors and contractors;
marketing promotion to accelerate market-based activity and leverage private investment and
financing and administration of programs.

This must all be done well to maintain the public trust and respect, to drive customer demand, to influence purchasing decisions and to maintain the integrity of the policy in the eyes of policy makers. Hence EMT’s proven approach of using:

impartial, expert information and administration;
technical assistance;
quality assurance;
management of financial incentives and
measurement and verification.

The results? As a result of work done by EMT between 2010 and 2016, we have:

reduced annual statewide electricity consumption by 1.1 billion kwh;
reduced peak summer demand on the grid by 117.2 mw and
reduced natural gas, oil, and propane use by 980,000 mmbtu.

Stoddard highlighted the principal program that has made this happen: the Home Energy Savings Program. As of the end of 2016, 30,000 homes have participated. There has been a surge in the installation and use of heat pumps: 16,000 have been put into service in the last 3 years. This technology has evolved and works now even in the County where temperatures are lowest—it did not work just a few years ago. EMT has a goal to install 18.000 more in the next 2 years. Each week, 25,000 LED bulbs are being installed—only counting the screw-in type.

To close, Stoddard mentioned that Efficiency Maine does not collect any surcharge on oil sales as they do on electricity bills but that this could become a new policy.

Daniel Brennan Senior Director for Programs at the Maine State Housing Authority photo by Kay MannHELP FOR LOW-INCOME HOUSEHOLDS

The third panelist was Daniel Brennan, Senior Director for Programs at the Maine State Housing Authority. Brennan opened by commenting that everyone needs to keep housing costs low in whatever way they can.

Brennan said his agency has found it to be easy to sell the idea of adhering to green building standards to low income housing developers. MSHA has a representative on the Efficiency Maine Trust board and also works closely with MEOPA.

MSHA uses money from both state and federal governments to both finance and improve homes for low income people. They offer two core programs: fuel assistance and home weatherization. Only 25% of eligible people actually apply for the assistance.

The LIHEAP fuel assistance program distributes $35 million per year through community action programs, up to $750 per household each year. It is a gateway into eligibility for the home weatherization program. The DOE weatherization program provides $3 million per year to do energy assessments and reduce the energy burden for homeowners. 15% of the LIHEAP funding also goes into this program. MSHA tries to be efficient with the funds, measuring and evaluating the return on investment. In addition, real estate transfer tax revenues are used to meet certain housing needs; sometimes for energy, sometimes other needs such as drought relief.

Brendan mentioned being concerned for the future as federal budget cuts loom. Maine is a poor, rural state and the need for assistance will remain. MSHA looks to continue partnering with other agencies to provide services that are vital to its mission.

Peter Mills Executive Director of the Maine Turnpike Authority photo by Kay MannRE-VISIONING TRANSPORTATION

The final panelist of the morning was Peter Mills, Executive Director of the Maine Turnpike Authority. Mills began by asking how we got through the past 30 years without raising the gasoline tax. He posited that it would be the perfect proxy for a carbon tax: the cost of collection is zero. We could have put more people to work during the recent recession if we had this revenue. In fact, half of our carbon load is generated from cars and trucks.

Mills first looked backward, summarizing the history of the 20th century as the constant struggle to adjust to the internal combustion engine. Roads did not have to be paved or plowed 50-75 years ago

As for the future of transportation, Mills sees 3 trends:

1. The internal combustion engine is done with and we need to plan for this. We are slow to adapt but it is happening in other places. We need to put EV charging stations along the turnpike for starters.

2. Self-driving cars—the future does not bode well for older people and this technology would allow them to stay mobile.

3. More mass transit and housing trends that support the use of it. Today, the market is not supporting the use of mass transit. Millennials are using technology more, with apps such as Lyft.

The Maine Turnpike Authority does its planning 30 years out, because it controls its own revenue.. It has to encompass the highway needs for the future: repairs, toll levels, etc. Mills predicted that we will reach a time when technology can provide us with the transit maps for our daily agendas. People may own shared interests in vehicles (similar to zipcars today). We will see more ride sharing and ride hailing. Today, ride sharing is the most common mass transit method in Maine, with commuter vans, GO Maine, etc. seeing wider usage. We will be commuting in electric cars and driverless cars. Mills foresees that the cost of energy for EV’s will be close to zero, and they will be carbon-free if they are charged with solar power. 

Where does that leave the state’s highway system? Mills foresees no reduction in demand, if nothing else due to the growing mail order economy.

AUDIENCE QUESTIONS:

Q: Where will revenue come from to maintain roads if fuel use goes down?

Mills: There are many other ways of measuring miles travelled: metering use and billing registered owners, for example.

Q: Where is the money for making big shifts in spending and investment?

Stoddard: My small contribution to this is that when Maine decided to join RGGI, which set a cap on carbon emissions from power generation and auctioned off the permits, the proceeds came in to help fund Efficiency Maine without relying on federal funds. It has been $3-5 million per year. If carbon regulation grows, the revenue may grow also.

Brennan: You have to solve the problems of poverty, aging and winters. Corporate philanthropy is one thing to hope for. The need will not go away.

Q: The Canadians won’t pay us for our tolls. Massachusetts is billing people for tolls.

Mills: 28% of MTA’s revenue comes from cash at tolls. 78% of car registrations do not have permanent addresses, so we can’t send mail to them. Massachusetts converted to automatic tolling. They were at 86% penetration and did not have enough real estate to build more toll booths.

Q: It takes 6-8 kWh per day to power an EV, first generation. I use about 1/3 of my electricity each year for car charging. How can renewable energy meet the needs for greater electricity loads?

Schneider: In our deregulated environment, it has implications for the transmission & delivery system. Our neighboring states are being more aggressive in market interventions. 

Carroll: Timing is everything with shifting the load on the grid. We will want to encourage people to charge vehicles at off peak times.

Q. I recently did efficiency upgrades at home that reduced my annual heating oil needs from 1500 gallons to 500 gallons. Why aren’t we being more aggressive at making home energy changes in Maine?

Stoddard: We were directed to apply RGGI funds and this has been successful. Some lower income households  can’t afford the investment. We just need the commitment of funds to help folks to do it. With 500,000 single family homes in state; half are low income. 27,000 middle income homes are “done” (and it is ongoing work), so we have 95,000 more to go.

Brennan: Regulation relaxation in the area of home weatherization would help bring it to more people.

Q: If you doubled your revenue overnight, where would you put it?

Brennan: we discuss the placement of $$ all the time; weatherization is a better investment than fuel assistance.

Stoddard: The funding level we have is sufficient to meet a standard, for both electricity and gas. You don’t want to give people money to do what they should be doing themselves. We don’t want to fund more than 1/3 of the cost of a given project, to avoid resentment. The exception to this would be for low income households

The day’s session concluded with a presentation by Jeff Marks, Executive Director of E2Tech about the development of a new roadmap to Maine’s energy future. Read about it in our separate article.

Photo credits: All photos by Kay Mann.

 

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