AUGUSTA, Maine — Recent controversy about funding for Efficiency Maine has caused a bit of an ironic twist for the energy-saving organization: So many businesses, municipalities and nonprofit organizations flocked to its Business Incentive Program that it had to notify contractors last month that reimbursement rates have been cut.
“We got more applications in the last two weeks of March than we got in the entire prior year,” Efficiency Maine Executive Director Michael Stoddard said Tuesday.
More than 1,600 new enrollments were submitted to Efficiency Maine in the final two weeks of March.
Kicking off that two-week flood of orders was a March 17 decision by the Maine Public Utilities Commission that because of an omitted “and” in a law that resulted from legislation enacted in 2013, Efficiency Maine’s annual funding cap would be some $36 million less than the Legislature intended. Lawmakers on both sides of the aisle have floated plans to fix the typo.
The PUC ruling applies to Efficiency Maine budgeting rules set to take effect in July 2016.
Stoddard said media coverage around the PUC’s vote triggered an influx of interest, even though the funding in the PUC controversy is a future allocation and separate from the money Efficiency Maine has on hand for current projects. That interest has strained the agency’s budget.
Another reason the reimbursement rates have been lowered, according to Stoddard, is because the cost of efficient LED lighting fixtures has dropped as they have become more popular.
Stoddard said Tuesday that the organization had previously notified contractors that rebates would be reduced, depending on budget availability and number of applications.
Efficiency Maine then sent second notices to its qualified contractors on April 3 that explained rebates for pre-approved lighting equipment would be reduced for projects submitted after March 19. The notice attributed the cut partially to the rush of orders and partially to falling prices.
Efficiency Maine’s April 3 notice inadvertently stated that the applicable date was March 13.
That has led to some angry customers, said one electrical contractor who didn’t want to be identified because he said speaking to the media might jeopardize his business relationship with Efficiency Maine.
“I sold the program on good faith,” the contractor wrote in an email to the BDN, which said rebates have fallen by as much as 50 percent. “Now I am faced with a very irate customer. … Now magnify my example by hundreds of fixtures.”
The drop in rebates aligns with a decrease in the price of lighting. The price for LED exit signs, for example, has gone from $40 to $20.
Stoddard said the overall budget for this particular program is around $11 million.
The contractor wrote that he and others he knows have been selling jobs for the past several weeks based on the previous reimbursement amounts.
Stoddard said Efficiency Maine, which has had to amend its reimbursement rates many times before, has taken steps to ensure contractors don’t become mired in that situation, and that if they are, it might be of their own doing.
For large projects of more than $10,000, pre-approval is required before any work begins. For smaller projects, anyone who submitted enrollment paperwork before March 13 will receive the original, higher rebate levels. The only thing that has changed, according to Stoddard, is that those projects will have to be completed before May 31, as opposed to in 60 days, as is the norm.
From a practical standpoint, that just means that the smaller projects have to be done a week or two more quickly than normal.
The only scenario that would result in lower-than-expected reimbursements for customers, according to Stoddard, is if a contractor promised the lower prices on a pre-approved project — generally with rebates worth more than $10,000 — but didn’t file the correct paperwork before March 13.
Stoddard said the lower reimbursement rate is designed to ensure that the program could fund all of its commitments between now and the end of the fiscal year on June 30.
