The state legislature is considering an enormous energy bill that combines provisions from several pieces of legislation into a package that encourages natural-gas expansion, energy-efficiency measures, and lowering electricity and heating costs. The so-called “Omnibus Energy Bill” — An Act to Reduce Energy Costs, Increase Energy Efficiency, Promote Electric System Reliability, and Protect the Environment — which passed 12-1 out of the Legislature’s Energy, Technology, and Utilities Commission at the end of May, enjoys bipartisan support but has split the environmental community and doesn’t yet have the backing of Governor Paul LePage.
While there are certainly things missing from this bill, and provisions that raise eyebrows, the bill is undeniably an attempt to re-envision the state’s role in shaping energy policy, especially given the absence of federal action.
For example, consider the bill’s approach to natural gas. While about half of the state’s electricity is generated from natural gas, only five percent of Maine homeowners heat with this clean(er) and cheaper fuel source. The state uses just six percent of the natural gas that comes into the region. In other words, the incentive doesn’t yet exist for natural gas companies to robustly expand into this state.
But lawmakers believe that extending the natural gas network in Maine and New England would result in lower prices for residential and industrial consumers. Thus, the centerpiece of the omnibus bill is a provision that aims to provide that incentive, by allowing the Maine Public Utilities Commission (PUC) to purchase pipeline capacity (up to $75 million per year) in an effort to spur new gas pipeline construction throughout New England. The commission can raise the money to do so through rate assessments or bonds. Future cost savings and revenues would then be used to reduce energy costs for ratepayers, to the tune of $200 million annually, according to a draft version of the bill.
But not everyone is so gung-ho about natural gas, which is extracted from the earth through the controversial practice of fracking and is a source of greenhouse-gas emissions (albeit less than petroleum). The Conservation Law Foundation, Environment Maine, and the Sierra Club Maine publicly asserted their opposition to the bill in May.
“Subsidizing natural gas companies with Maine ratepayer money keeps the state addicted to fossil fuels and would result in more global warming and air pollution,” says Glen Brand, director of the Sierra Club’s state chapter. “It’s shifting our eggs from one fossil fuel basket to another.”
What’s more, said Greg Cunningham of the Conservation Law Foundation, “natural gas is a volatile market and is likely to be much more expensive” in the future. A better choice, opponents maintain, would be to continue to support diversification of clean, renewable fuel sources such as wind and solar. (The bill barely addresses renewables, but it does support the University of Maine’s Deep-Water Offshore Wind Energy Pilot.)
“There is no basis to believe that the price of natural gas will increase to anywhere near the price of oil,” says Tony Buxton, a Preti Flaherty lobbyist for the Industrial Energy Consumers Group who helped craft the bill. In fact, a large-scale shift to natural gas could help take a “gigantic bite out of growing poverty in Maine.”