Paying More for Renewable Energy – Are You Nuts?

Most power plants in New England need to pay for coal, oil, gas or uranium for fuel. The operating cost for these plants depends heavily on the cost of that fuel. When prices go up, the cost of electricity goes up.  We do not control the cost of these fuels, which is shaped by world events, demand, and availability.

Right now, because historically low natural gas and oil pricing, fossil fuel based electricity is cheap. That’s a good thing.

But we in Maine have no control over the price of oil and natural gas. And we’re at the far end of the pipeline. Prices can literally triple overnight, and many analysts think they will. Demand for gasoline is growing fast, and if there is an interruption in fossil fuel supply due to weather, war, or natural disaster – and this is not really a question of if, but when – prices will rise.

So we need to develop policy now, while fossil fuel costs are low, which will protect us. The community-based renewable energy program of the PUC is an attempt to do just that – to return some of our energy supply, and thus our energy pricing, to local control in Maine.  The program only allows locally-owned projects (as opposed to the large-scale wind projects owned by out-of-state entities that we’re all so familiar with).

There has been some controversy about a recent restructuring of the program.  In 2015, the legislature restructured and improved it in three ways:

  • Previously, there was no incentive for a provider to bid in at a lower price. The result was that all the projects bid in at or near the maximum rate of 10 cents/kwh.
  • Previously, there was no timeline. Projects could tie up space in the program but not ever get completed.
  • It specified that only those projects that provide the most benefit to ratepayers be chosen.

These changes improved the program, and new projects were selected, including hydropower in Dover-Foxcroft, a biomass plant at Robbins Lumber in Searsmont, and a solar project in Monroe majority-owned by Cianbro. These projects were awarded long-term contracts, the lowest of which is 6.7 cents/kwh (just slightly above today’s retail electricity rates) which is impressive for homegrown renewables.

Currently, this has a rate impact of about .03 cents per kWh on your electric bill, or about 15 cents a month – couch change.

However, when that interruption in fossil fuel supply arrives and electric rates increase, these projects could end up saving us all much more than 15 cents a month. In the meantime, we are making a local investment in technologies like anaerobic digestion fueled by food waste and cow manure, adding to the availability of hydropower, and helping our biomass industry.

 

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