“Open for business,” says Maine’s government website. But it could say “Open for energy efficiency business,” following a recent doubling of money available for core efficiency programs.
State lawmakers increased funding for electric efficiency to about $21 million in an omnibus energy bill (LD 1559) that became law in late June. The change comes after flat funding for about 12 years.
Until now, Maine’s energy efficiency program has been the poor stepchild living among rich and successful brethren in the Northeast. Massachusetts has held the number one spot nationally for energy efficiency for two years running in an annual scoring by the American Council for an Energy-Efficient Economy. Connecticut, Rhode Island and Vermont all held slots within the top seven last year. New York placed number 5.
Maine’s ranking? A middling 25.
However, the new funding, along with other revenue from sources like the Regional Greenhouse Gas Initiative, puts Maine’s efficiency budget more on par with its notable neighbors.
“This puts us closer to the per capita spending levels we see in the surrounding Northeast states. It is not going to be as aggressive as Massachusetts and Vermont, but it’s much closer,” said Michael Stoddard, executive director of Efficiency Maine Trust, in a recent interview.
Other Pluses for Maine
The state is poised in other ways, too, as a market to watch. For one, it has Efficiency Maine Trust, which state lawmakers established in 2009 to run the state’s efficiency programs. Only a few such organizations exist nationally. Oregon and Vermont have similar setups. These not-for-profit agencies create and administer state energy efficiency programs, supplanting what’s usually the role of the conventional investor-owned utility. Since utilities make their money selling or delivering energy, not saving it, many have little economic incentive to push energy efficiency. So these independent entities help overcome a major obstacle to reducing energy use.
Further, Maine has a reputation for eking out a lot of energy savings from a little money. The state’s energy productivity is high – it spends less to save a kilowatt-hour of energy than others in New England, according to filings before ISO New England. Maine invested about $53 million from 2009 to 2011, saving about 282 GWh annually and reducing peak demand by 11 MW. The state, which has a peak demand of about 2,075 MW, has set a 2020 target to reduce peak load by 300 MW.
The increase in electricity funding frees up other money that the state can use to tackle a unique and difficult problem. Maine has more households than any other in the nation — about 70 percent — that depend on oil for heat. As a result, Maine households pay unpredictable and often high bills to keep warm during the state’s severe winters.
“The people in Maine are getting killed on the price of heat,” Stoddard said.
This makes heating conservation a major priority. Efficiency Maine provides incentives for homeowners to undertake air sealing – which not only cuts energy bills but also starts homeowners on a path to do more. About 5,000 homes annually are taking advantage of the air sealing program.
“Most importantly, they are establishing a relationship with a home weatherization contractor, so they are in a good position to take the next step and move toward insulating the attic and the basement and looking at their heating systems,” Stoddard said.
If homeowners know who to go to, and who to trust for information, they are more apt to seriously contemplate switching from oil heat to a ductless heat pump, natural gas, wood pellets or solar.
“People don’t make $5,000 or $10,000 purchases at the snap of finger. They may debate it over period of years,” Stoddard said. “That is different from how most energy efficiency programs operate. Most are trying to step in the middle of a purchasing transaction that takes anywhere from 10 minutes to 10 hours to 10 days, but not 10 years.”
To help nudge homeowners toward the bigger and harder decisions, the state is making incentives available for higher efficiency heating equipment, and low-interest loans for home weatherization and heating system upgrades.
On the electric side, Maine plans to make its existing programs available in a larger geographic area, and offer more custom energy efficiency projects for commercial and industrial customers.
Stoddard sees a lot of excitement emerging from the changes in the state’s energy program, including “bipartisan support from the policymakers and broad satisfaction and acceptance from customers and the contractor community.”
In Part II of Rising Market: Maine we’ll look at ways the state is test driving up-and-coming technologies.