April 9, 2003
Honorable Christopher Hall, Senate Chair
Honorable Lawrence Bliss, House Chair
Joint Standing Committee on Utilities and Energy
100 State House Station
Augusta, ME 04333
Re: LD 1373, Resolve, to Establish the Commission on Comprehensive Energy Planning
Dear Senator Hall and Representative Bliss:
The Commission will testify neither for nor against LD 1373, Resolve, to Establish the Commission on Comprehensive Energy Planning. We will be present as the Committee considers this bill.
LD 1373 complements LD 669, which the Committee considered earlier in the session. LD 669 would review state energy-related policy regarding energy, the environment, transportation, and economic development, and present findings and recommendations. LD 1373 would require a new entity to develop a plan that explicitly considers transmission needs, a wide variety of supplies of electricity (e.g., conservation, cogeneration, Canadian imports, non-traditional power supplies, and gas-fired generation), environmental costs, the regional power situation, and deregulation of the electric industry. While LD 669 appears to encompass all forms of energy, LD 1373 appears to focus on electricity.
LD 1373 may also complement portions of LDs 1261, 1184, and other bills being considered this week that propose that a study group consider energy policies or practices and report back findings during the next Legislative session.
As we stated in our testimony on LD 669, coordination among entities that implement the State’s energy policies is beneficial. The Energy Resources Council has fostered such coordination, and we do not oppose initiatives that would further stimulate implementation efficiencies.
However, as we did for LD 669, we recommend that the Committee establish the expected use that will be made of any resulting plan. The time and resources required by LD 1373 (and other studies suggested by bills this week) are significant, and therefore should be focused on useable results. We have outlined, below, recommendations that would help focus the work directed by LD 1373.
First, we note that many energy policies and activities are not within State control, either because they are regulated through federal law (e.g., the FERC regulates transmission procedures and authorizes ISO-NE to establish many delivery and generation procedures), or because they are carried out in a competitive market (e.g., electricity generation). Thus, the investigation directed by LD 1373 would most profitably focus on the State’s response to market or federal activities, rather than on establishing policies to replace those activities. We supported an amendment to LD 669 that directed the investigation to identifying opportunities for improving the effectiveness of the State’s implementation of energy policy. We would support a similar activity-focused approach in LD 1373.
In addition, we recommend that, as it did with LD 669, the Committee narrow the focus of the investigation to a smaller, more focused group of issues. We supported an amendment to LD 669 that would focus the investigation on renewable energy and energy efficiency. We believe that, in the limited amount of time available, those carrying out the investigation could achieve useable results regarding those two issues.
In our testimony on bills related to renewable generation incentives, we supported establishing a study group to establish implementation details such as the means for disbursing system benefit charge (SBC) funds. This group would also have a relatively narrow focus and would produce results that would be used for a clearly defined purpose.
Finally, we question whether it is useful at this time to examine, using the resources proposed in LD 1373, the deregulation of the electric industry, divestiture of generating facilities, and the closing of Maine Yankee. First, it is not clear to me that enough time has passed to evaluate the major policy decisions made by the Legislature that led to restructuring and divestiture. The preliminary results appear to be quite favorable for most Maine ratepayers, but only time – more time – will confirm or dispute that judgment. Second, and perhaps more important, as a practical matter these are not decisions that can be reversed. Maine Yankee no longer exists; most of the funds from the sale of assets have already been returned to ratepayers; and the structural changes in the market are well ingrained. These are not, therefore, areas where a report – regardless of its conclusions concerning the wisdom of the decisions involved – would be likely to be of much practical use.
We will be present as the Committee considers the goals for the study groups that have been proposed through various bills and the most effective means of meeting those goals.
Sincerely,
Thomas L. Welch
Commission Chair