Maine Follows New Hampshire’s Fuel-Switching Lead

By Bill Bell | July 22, 2013

The energy-related actions decisions made by Maine’s recently adjourned state legislature perhaps reflect similar discussions in other states.

Prior to commencement of the legislative session, experienced lobbyists predicted a veto-driven standoff between Republican Gov. Paul LePage and the sizable Democrat majority in both houses. They predicted the exceptions would be the budget, where stalemate means a state shutdown, and perhaps a major environmental bill, for which suburban and coastal Republicans might join with Democrats to override a gubernatorial veto.

The observers were right about the budget, where a careful and difficult compromise between appropriations committee members was vetoed by an angry governor, but overridden. The other major veto override, however, came on what became known as the Omnibus Energy Bill. More than anything else, Maine’s legislators felt that energy was the most important subject on which they needed to work out differences and show progress.

 Equally significant was the high priority within the energy bill—to lower heating costs for Maine citizens. Maine’s governor set a tough tone by pronouncing that Maine’s energy agency should “be more concerned about Mainers heating bills than about curlicue light bulbs.” To the dismay of the energy audit and insulating industrial complex, the governor and his energy director made a convincing political case for lowering heating costs by fuel-switching, particularly by providing more homeowners access to natural gas and pellet heat.

 The successful energy bill compromise involved finding more funds for both efficiency measures and fuel switching. The increased efficiency funding will come primarily from a settlement surrounding the closing of Maine’s nuclear plant years ago. The fuel-switching financing will be derived from revisions in Maine’s participation in the Northeast’s Regional Greenhouse Gas Initiative.

So, which sectors of the heating industry will benefit from the new emphasis at the state energy agency? At its first meeting after the new energy bill went into law, the agency put solar, natural gas, electric heat pumps, and biomass (pellet stoves as well as boilers) on the table. In contrast to all of the other heating systems costing between $3,000 and $5,000, pellet boilers retail at a much higher price, therefore requiring a much higher consumer incentive if sales are to be effectively boosted. It’s up to the pellet boiler industry to make their case.

Part of this case will certainly be New Hampshire’s example, where the state public utilities commission has an ongoing pellet boiler incentive program providing rebates of 30 percent or $6,000, whichever is lower, to homeowners. Another good example is the Berlin, N.H., Model Neighborhood Project, assisted by the Northern Forest Center, in which incentives have enabled nearly 50 homeowners to generate huge cost and carbon emission savings by switching to pellet boilers. If political support counts, the 2 to 1 majority, by which both houses of the Maine legislature passed a measure supporting the pellet boiler industry, may be that industry’s best card.

 While showing clear support for fuel switching, the Maine legislature took a rain check on the chance to make controversial choices between renewable energy systems. Programs relating to hydropower, onshore and offshore wind power, tidal and solar power, and biomass energy are all to be “studied” between now and December by a special legislative commission, particularly with regard to Maine’s renewable energy credit portfolio. Again following New Hampshire’s example, where thermal biomass last year was added to the renewable energy credit program, thermal energy credits will be part of this “summer study.”

 This stuff is getting complicated.

Author: Bill Bell
Executive Director, Maine Pellet Fuels Association