Governor LePage Calls on Leadership to Help Lower Energy Prices

August 21, 2015

For Immediate Release: Friday, August 21, 2015
Contact: Adrienne Bennett, Press Secretary, 207-287-2531

Verso announces 300 job losses in Jay mill, cites energy costs, taxes

AUGUSTA – Governor Paul R. LePage sent a second letter Friday to legislative leadership calling for action to reform Maine’s obsolete and costly energy policies. The letter was prompted by an announcement from Verso about the loss of 300 jobs at its Jay paper mill.

Governor LePage sent a letter to leadership Thursday regarding the recent closure of Franklin Fueling Systems Saco facility, which outlined concerns about expensive energy and electricity prices in Maine. Both companies cited energy costs as a barrier to operating in the State.

“The announcement today that Verso Paper Company will shut down two machines in Jay and lay off approximately 300 Mainers is extremely troubling and disappointing—but not surprising,” wrote Governor LePage. “I have said over and over during nearly five years as Governor that we must make Maine more competitive and that capital investment goes where it’s welcomed and stays where it’s appreciated. Every decision I make as Governor attempts to make Maine more competitive. Unfortunately, too many legislators can’t say the same. Their strict adherence to the status quo will surely result in the loss of more jobs.”

The Governor’s Energy Office continues to collaborate with other New England States to build cost-effective energy infrastructure that reduces energy prices. “We are in partnership with four other New England states working to facilitate additional energy infrastructure to expand natural gas and hydropower into the region,” said Patrick Woodcock director of the Governor’s Energy Office. “The Administration has also proposed significant energy legislation to modernize and lower the cost of state policies that were put in place years ago. We should move forward with bold energy legislation rather than status quo policies that are simply adding costs to employers and not delivering results.”

Governor LePage last session introduced three bills to lower the cost of energy for Maine’s businesses. These included the following: •“An Act to Reduce Electric Rates for Maine Businesses.” The legislation would refund a portion of the pollution auction collected under the Regional Greenhouse Gas Initiative (RGGI) back to ratepayers. Specifically, starting in July 2015, 55 percent of funds collected under RGGI (approximately $5.7 million in FY 2014) would be returned directly to business ratepayers, thus lowering their electricity rates. The Legislature carried over this legislation until the next session.

•“An Act to Improve Natural Gas Price Competitiveness for Maine’s Manufacturers.” The bill authorizes the Public Utilities Commission to aid large natural gas users in obtaining adequate natural gas supplies at a reasonable cost. Utilizing the PUC’s existing authority to contract for natural gas capacity, this bill would permit large natural gas users to contract for their own supplies, using the state’s transmission and distribution utilities as the creditworthy ‘backstop’ for the supply contract. The Energy, Utilities, and Technology Committee voted against this bill in June.

•“An Act to Focus Energy Laws on Energy Cost.” The bill takes several actions to reduce energy costs for Mainers. The legislation authorizes the Public Utilities Commission to encourage aggregation of distributed generation (i.e., energy produced near where it is used), thus capturing the benefits of such generation for ratepayers. The bill also makes several changes to the state’s complex renewable energy policies, to encourage procuring clean energy sources at a lower cost. The bill changes the state’s long term contracting authority to focus on lower cost projects, and it eliminates both the net energy billing program and the state’s renewable portfolio standard. All ratepayers pay for these subsidy programs, but at current pricing is doing little to encourage development of cost-effective renewable energy. The Senate passed this legislation, but the House voted against the legislation in June.

In May, Governor LePage testified before the House Energy and Commerce’s Subcommittee on Energy and Power in support of a bill to speed the federal permitting process and lower energy costs across our nation.

The draft legislation aims to improve the permitting of interstate natural gas pipelines, along with a draft bill to reduce the regulatory burdens on hydropower production. Governor LePage spoke about how the process must be modernized and the hydropower licensing process improved to make it more efficient and transparent, while continuing to uphold environmental protections.

“Natural gas and hydropower are ready to power our idle mills. I appreciate the work that this Committee is doing to bring rationality to the federal permitting process,” said Governor LePage at the hearing. “I encourage the Committee to adopt these modest bills and to continue the work to accelerate the energy infrastructure projects that can bring additional prosperity to Maine and the rest of the country.”

Congress continues to consider this legislation with the House Energy and Commerce Committee passing a version of the natural gas legislation prior to the August recess.

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