Skip Maine state header navigation
March 5, 2003
Representative Donald Berry
Utilities and Energy Committee
100 State House Station
Re: Follow-up to LD 298, An Act to Define Standard-offer Service as a Service of Last Resort
Dear Representative Berry:
During the Public Hearing of LD 298, it became apparent that the primary concern of many stakeholders is that the Maine Public Utilities Commission would initiate a “green offer” that would compete with products – either existing or future -- being sold by open market competitors. I would like to clarify the Commission’s position regarding a green offer.
The Commission discussed a Commission-sponsored green offer in its Standard Offer Report submitted to the Committee in December 2002 (the relevant pages are attached to this letter). We produced the report and conducted the underlying investigation at the direction of the Legislature (P.L. 2002 ch. 528). The law required us to investigate the question: “Beginning March 1, 2005, should any standard-offer provider selected by the commission pursuant to subsection 2 be required to offer at least one standard-offer service that is composed entirely of renewable resources as defined in section 3210?” When the question was posed and our report was written, there was no widespread green product and many persons (including members of the Committee, members of the Commission, and others) were concerned that a green product would not develop through an active retail market. Within that context, our report recommended that the Legislature authorize (but not require) the Commission to establish a green offer after March 1, 2005.
There are important aspects to this recommendation. First, we commented in the report that we were “concerned that the green offer could have the effect of slowing the development of a competitive market for other green products.” We stated that we “would act quickly to phase out the green offer if green markets appeared to be developing elsewhere or if there is evidence that the green offer is inhibiting the development of such markets.” Recently, Maine Interfaith Power and Light (MIPL) introduced a green product (an event that we greeted with enthusiasm). We would not support offering a Commission-sponsored product that competed with an active MIPL product.
In addition, the legislative
authorization recommended in the report would not become effective until March
1, 2005. Our report states: “since we do
not propose to initiate a green option until March 1, 2005, the Commission
should have the discretion not to establish a green offering if a private
market had developed for green power by that time, or if a green market existed
only for certain classes, to exclude those classes from the Commission’s
offering.” Furthermore, existing
standard offer contracts are effective until 2005 and might be voided or
revised if an event such as a Commission-sponsored green product occurred,
reinforcing the wisdom of waiting until 2005 to offer a Commission-sponsored
green offer. Until then, the Commission
would be happy to monitor the progress of
Finally, we believe that we likely do not have the authority to establish a green offer under current law. In any case, as stated in our report, “it is the Commission’s view that such a program should not be implemented without explicit legislative authority.” We do not intend to carry out such a significant action without direct Legislative approval.
We continue to oppose the overly
broad wording of LD 298 as written or as amended at the public hearing. However, we are neither for nor against a
bill that authorizes or prohibits a Commission-sponsored green offer in 2005 or
earlier.
Sincerely,
Marjorie R. McLaughlin
Legislative Liaison
cc. Members of the Utilities and Energy Committee
Jon Clark