Bill’s impact on utility rates eyed

AUGUSTA – Lawmakers began delving into the complex details of a plan to curb greenhouse gas emissions on Tuesday with a key focus on how Maine’s involvement in a multistate program could affect consumers’ utility bills.

The vast majority of people who spoke during a nearly five-hour public hearing Tuesday voiced strong support for a bill, LD 1851, that lays out the terms for Maine’s participation in the Regional Greenhouse Gas Initiative.

Known as RGGI, or “Reggie” for short, the initiative calls on member states to cap and then reduce emissions of carbon dioxide from fossil fuel-burning power plants by 2019. The program creates a regional “carbon market” where power plants that reduce emissions beyond their goal can sell their excess carbon “credits” to other plants.

Ten Northeastern states, including all of New England, have signed onto RGGI, the nation’s first multistate effort to curb power plants’ emissions of the heat-trapping gas linked to climate change.

“If we’re going to tackle this problem globally, we have to start with our own state,” George Jacobson, a professor with the University of Maine’s Climate Change Institute, told members of the Legislature’s Utilities Committee and Natural Resources Committee. “And we have such a great history in the state of leadership” on environmental issues.

During the hours of testimony, the lawmakers heard from environmental groups, businesses and health organizations supporting the compromise bill, which was negotiated by stakeholder groups over several months.

The committees also heard conflicting and sometimes inconclusive information on how Maine ratepayers’ electric bills will be affected by RGGI.

State officials have estimated that the average household’s annual utility bill could rise between $3 and $22 as a result of regulated power plants passing along the costs of purchasing their carbon emissions credits.

But Kurt Adams, chairman of the Maine Public Utilities Commission, said he doesn’t believe anyone can predict how implementation of RGGI will affect electric rates. What is clear, Adams said, is that rates will likely rise even if the state does not join RGGI because Maine is part of the ISO New England power grid.

Adams also predicted that the state could “blunt” or even offset those rate increases by investing the windfall generated by selling the carbon credits in energy efficiency programs, as proposed in the bill. The bill also contains a provision to pay consumers rebates if rates rise too high.

The PUC is not taking a stand on the bill but has worked with state environmental officials to address technical issues in the measure.

On the other hand, David Allen, a representative of Central Maine Power, suggested that the costs could be much higher than predicted. Those costs will eventually be passed along to consumers, he said.

Keith Van Scotter, president and chief executive officer of Lincoln Paper and Tissue, said his company supports the bill because of its emphasis on investing in energy efficiency and conservation.

Lincoln Paper and Tissue’s electricity rates have risen by approximately 60 percent during the past three years and now account for nearly as much expenditures as payroll.

“The high cost of power here [in Maine] is a definite burden,” Van Scotter said.