As a Republican, Independent, and Democrat, we have differing perspectives on many public policy issues. But on the question of Maine’s energy problem, we are united in the belief that strong action is needed this year, and that a long-term commitment must be made to weatherize a large percentage of Maine homes over the next 20 years.
Last summer’s skyrocketing oil prices brought well-founded predictions of an impending economic and human disaster. We avoided a catastrophe largely because oil prices plummeted with the economy. But now is not a time for complacency.
The central energy problem for Maine homeowners is broadly understood. Maine has the highest dependence on home heating oil of any state in the nation, with more than 80 percent of our homes heated with oil. We have old, inefficient homes that waste an average of 20 to 30 percent of the energy we buy. And our average household income is low, so most Mainers are not in a position to invest in the insulation, replacement furnaces, or weatherization services that they need to cut energy costs.
As many as 400,000 Maine homes need to be weatherized. Otherwise, we will continue to waste hundreds of millions of dollars annually on oil that literally is heating the outdoors. Weatherizing this many homes is a daunting task that will take 15 to 20 years, or longer, and the job cannot not be accomplished without new resources.
Some may believe that education, low-interest loans, or two years of federal stimulus funding is all that is needed. Our view is that none of these approaches alone can provide the large-scale and effective response urgently needed if we hope to keep Mainers living in their homes, and living in Maine.
If heating oil prices had stayed at last summer’s levels, then we would have seen widows moving in with neighbors and the beginnings of a new mass exodus from the state. The problem is that serious. With oil at $4.75 per gallon, the cost of wasting 20 to 30 percent of a home’s energy is nearly $1,400 per year for the average home.
Maine lawmakers have been considering a raft of energy bills with a broad array of ideas. The weak economy complicates the challenge, but we see a common sense path forward.
First, Maine’s energy efficiency programs need to be brought together into a single unified entity and run as much like a private sector operation as possible. The Maine Technology Initiative (MTI) is a good model.
Second, lawmakers also should set an ambitious goal, something like ensuring that half of Maine’s businesses and half of the state’s 550,000 homes are weatherized by 2030.
Third, a funding strategy is needed. Federal stimulus funding can get the ball rolling, but only a short distance. State officials estimate that the $30 million per year in stimulus funding available for energy efficiency over the next two years will create 1,000 jobs, and cut energy costs for about 10,000 homes. But what happens when the funds dry up? Without an ongoing program, companies will be forced to lay off the very people hired with the stimulus money. Even worse, many individuals and businesses won’t make the investments needed over the next two years to move into the weatherization field if they don’t see a long-term commitment.
Several potential funding sources are being discussed at the State House, including bonds, a small surcharge on heating fuels, and fees from leasing highway right-of-ways for energy transmission lines. An electricity surcharge currently funds Maine’s successful electricity efficiency program, but electricity accounts for only 10 percent of the average Mainer’s energy bill. Home heating is where big savings can be achieved, and why a heating oil surcharge is being considered. If lawmakers have other ideas, then now is the time to put them on the table.
Whatever funding is provided, it should be used for rebates and incentives in a fashion that helps leverage private investment. The money should be managed as a trust account, and protected from being raided for any other purpose.
Finally, we believe that a light touch should be used in the area of work force development. A well-trained work force is essential, but government should not compete with the private sector. If the Legislature maps out a long-term program with funding, then Maine businesses will recruit and train the employees needed to do the work.
Five years from now, Maine citizens are likely to look back to 2009 and judge whether we did what needed to be done to prepare the state for the inevitable return of high energy costs. Maine’s lawmakers are elected to address difficult challenges like this. We encourage them to demonstrate the courage and nonpartisan approach necessary, so that Maine people of all political persuasions are not left out in the cold.
Richard A. Bennett is CEO of The Corporate Library and served as president of the Maine Senate as a Republican from Oxford. Angus King is co-founder of Independence Wind, LLC, and served as governor as an Independent. Mark Lawrence is York County District Attorney and served as president of the Maine Senate as a Democrat from Kittery.