Maine Governor Vetoes Solar Compromise Bill

Joseph Bebon
Written by Joseph Bebon
on April 29, 2016 1 Comment
Categories : Policy Watch

Editor’s Note: Originally published on Thursday, April 28, this article was updated on April 29 to report the outcome of efforts to override the veto.

Despite eleventh-hour negotiations, Gov. Paul LePage, R-Maine, vetoed a comprehensive solar policy bill on Wednesday. Bill advocates tried to override his decision not once, but twice, on Friday. However, both attempts fell short.

State lawmakers first announced the legislation, L.D.1649, in February, and it aimed to replace Maine’s net energy metering (NEM) policy with a market-based program. The novel approach was the result of a months-long stakeholder process.

Under NEM, utilities provide billing credits to homeowners and businesses with solar installations for excess energy that the projects add to the grid. The policy continues to be a topic of debate across the U.S., such as in Nevada, but L.D.1649 garnered broad support from Maine solar companies, utilities and community leaders.

“Seeing other fights around net metering happening elsewhere in the country, and wanting to get to a place where we could enter a collaborative rather than combative relationship with utilities, we were eager to join this ‘stakeholder’ process and contribute our thinking,” says Fred Greenhalgh from solar installer ReVision Energy. “We truly believe it is a remarkable and innovative policy. Good for Maine, good for solar and good for ratepayers.”

L.D.164 proposed to swap Maine’s NEM policy with a new program requiring regulated utilities in the state to enter into long-term contracts for solar across several segments, including residential, commercial and grid scale.

The bill originally called for adding 248 MW of solar over the life of the program, which is much more than the state’s current installed solar capacity of about 20 MW. However, lawmakers eventually amended the bill in an effort to gain two-thirds majority support necessary to override an almost-certain veto from the governor, who had voiced his opposition to the bill from the start.

Among other changes, the amended bill cut down the 248 MW requirement to 196 MW, lessened the program from five years to four, and added some more ratepayer protections. According to a document supplied by the Maine State House Majority Office, the bill would have led to 650 more jobs and save ratepayers $58 million to $110 million.

Although the amended version easily passed in the state Senate, the House of Representatives approved it by 91 to 56 – still short of the two-thirds tally advocates were hoping for.

Before LePage issued his veto, Assistant House Majority Leader Sara Gideon, D-Freeport, met with the governor to try and work on a compromise. She and bill proponents ultimately rejected one of LePage’s three demands, though.

“I was extremely skeptical that these conversations would lead to an agreement. But I’m glad [Gideon] tried,” says Rep. Norman Higgins, R-Dover-Foxcroft – one of the legislators who amended L.D.1649 – in a press release. “We made a good-faith effort to find common ground with the governor and get this law into place together. We agreed to his first two requests, but we have to draw the line when the changes are going to cost us jobs.”

In his veto letter, LePage writes, “The legislation would increase energy costs for those Maine businesses and households that cannot afford expensive solar panels by tens of millions of dollars – picking winners and losers in Maine’s energy mix. The cost of ever-increasing solar mandates in this bill would be borne by ratepayers with no price cap, allowing above-market contracts to be added to stranded costs.

“I tried to negotiate in good faith with Democrats to reach a compromise that would not add to the burden of ratepayers,” he continues. “I requested that the bill include all renewables, return all renewable energy credits to ratepayers and have a cap on the price we pay in long-term contracts. We could not reach an agreement.”

LePage further claims the lawmakers “are not serious about reducing the price of energy for Maine families or job creators.”

In a separate announcement, the Maine State House Majority Office notes that negotiators were open to including other renewable energy resources in the legislation and argues the bill “already monetizes the value of renewable energy credits and returns that money to all ratepayers to lower their costs.”

Nonetheless, the office maintains that the cap LePage wanted would have been “harmful to nearly all of Maine’s solar installers.”

ReVision Energy’s Greenhalgh comments, “The governor’s refrain has been that Maine’s energy costs are too high and that Maine needs jobs. This bill provided a proposal to create new solar jobs and save ratepayers over $100 million. Yet, it was vetoed by the governor. We are still confused at this apparent inconsistency.”

Maine lawmakers returned to the state capitol Friday to address a number of vetoed bills, including L.D.1649. Advocates of the solar bill vowed to push for an override, and push they did – twice. The House voted to override the solar bill veto in the morning, but according to documents from the state legislature, the 96-52 outcome was just three votes shy of the necessary 99 yeas. An Associated Press report says the House later took a second vote on the matter after a legislator requested it. More lawmakers were absent during the redo, and the 93-50 result was again three votes away from a two-thirds majority. The bill is dead.

Without L.D.1649, the NEM issue will go to the Maine Public Utilities Commission (PUC), which is expected to make a ruling this summer and whose commissioners were appointed by LePage.

“Though there is no net metering cap in Maine, there is a review that is triggered when solar hits 1 percent grid penetration, as it did last year,” explains Greenhalgh, adding that the commissioners “have a lot of room to make changes to NEM.”

“But even assuming a neutral or positive amendment to NEM, the immediate impact of more months of market uncertainty is bad for business – as the upcoming review will mean some percentage of our potential customers will wait and see what the PUC will do prior to making a solar investment,” he concludes.

Comments

  1. Since LePage is a Koch puppet, I only hope the citizens and reps of Maine will override this veto. It sounds as if they hammered out a program that will be a valuable model for solar. There is no reason for solar and government to be at odds, locally or globally, unless personal greed is involved.

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