On June 26, Maine's Governor Baldacci ceremonially signed LD 1075, “An Act to Promote Community-based Energy Pilot Program.” The new law establishes a six-year pilot program to encourage the development of community-based renewable energy in Maine, defined as a majority locally-owned facility that generates electricity from an eligible renewable resource. The pilot program has an overall program cap of 50 MW, 10 MW of which is reserved at the outset for projects that have a generating capacity under 100 kW or are located in the service territory of a consumer-owned utility. To be eligible for the program, renewable energy projects must (1) have a generating capacity of 10 MW or less, (2) secure a resolution of support from their local community (projects with a capacity of less than 100 kW are exempt from this requirement), (3) be connected to the grid, and (4) have an in-service date of September 1, 2009 or later.
Under the pilot, participating renewable energy projects can choose one of two incentives: a long-term contract or a 150% multiplier on the value of renewable energy credits (RECs) for electricity generated. For the long-term contract option, the Public Utilities Commission can direct investor-owned utilities to enter into long-term contracts (consumer-owned utilities to enter into long-term contracts at their option). These contracts can be up to 20 years in duration, and the Commission is directed to contain costs by ensuring that the average price per kWh in each contract year does not exceed 10 cents.
According to Maine Rural Partners (pdf), a supporter of the bill, the law creates a economically feasible “green power option” for consumers. But another supporter of the bill, the Midcoast Green Collaborative, points out that while the pilot program “includes key elements of the feed-in tariff concept – long term contracting on the basis of predetermined rates for small power generators that use renewable energy as defined in Maine law”, what started out as a feed-in tariff (FIT) eventually became, as passed, “only a very modest incentive effect at best.”
Concerns about long-term contracts and mandatory rates, or, as Vermont’s governor called them “statutory standard offer rates”, ordinarily make it very difficult for robust FITs to become state or federal law. (One notable exception is the Vermont FIT, featured in an earlier post.) In fact, concerns about costs were among those that led to the modification of LD 1450 (pdf), the original FIT proposed in Maine, into LD 1075. While FIT advocates argue such concerns lack merit, some solar industry leaders appear to have a more pragmatic response to the political challenge, and are leaving the quest for FITs for another day.
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