PORTLAND, Maine — Maine regulators have approved a settlement to allocate roughly $186 million to in-state energy efficiency measures at homes and businesses over the next three years, ending a long fight over the agency’s next budget, which starts July 1.
Michael Stoddard, executive director of the Efficiency Maine Trust, said he’s pleased with the funding amount that came in — about 15 percent lower than the agency’s original request last fall.
The lower amount does not reflect a lack of interest in efficiency programs, Stoddard said, but was a matter of math. Continued drops in the price of electricity and fuels — such as natural gas — used to produce it have made it more difficult for certain efficiency measures to provide the forecasted payback required by law.
“It’s not something that we feel badly about. It just reflects the reality of current prices,” Stoddard said.
Staff at the Maine Public Utilities Commission expressed concerns about the need for updated forecasts in a February analysis, writing that updated, lower power prices made some cost-saving measures no longer worth the investment.
All three PUC commissioners approved the settlement in deliberations Tuesday.
Stoddard said the final settlement reduces his agency’s allotment from electric utilities by about 22 percent, which is in line with the forecasted decrease in power prices since Efficiency Maine’s initial budget request in October.
“Some things that used to be cost-effective no longer save more than they cost, but there’s still a heck of a lot that remains that’s cost-effective,” Stoddard said.
The agency’s budget comes from a variety of sources, with the bulk from an assessment on electric utilities that helps fund measures to reduce electricity use. That assessment was the subject of political controversy, when a missing “and” caused regulators to read the law as setting a lower than intended cap on electricity program funding.
PUC staff in February recommended a total three-year budget of about $171 million, a level about 8 percent lower than the settlement approved Tuesday.
Environmental groups involved in the case and the settlement expressed disappointment that the new spending plan does not go far enough.
The Conservation Law Foundation had filed an objection to the settlement, arguing it should have used a 2015 annual report produced by parties across New England to determine the value of energy efficiency measures, called the Avoided Energy Supply Costs in New England, or AESC, report.
“Every energy efficiency program administrator in New England uses the AESC,” CLF attorney Ben Tettlebaum wrote in the May 31 objection. “It is the benchmark study and accepted regional best practice for determining avoided energy costs in the region.”
PUC commissioners in their decision Tuesday ruled that they are not obligated to rely on that report alone and may consider other market information, including a study on energy forecasts done for regulators by consultants London Economics International.
The settlement agreement also sets aside some lingering disputes for a second phase of the case, including over a natural gas conservation program run by Summit Natural Gas.
Stoddard said the budget approval is roughly in line with past years and allows the trust “to continue offering the same basic program at a very robust level for the next three years.”
It also doubles the amount of money from a regional greenhouse gas auction that will go toward low-income heating conversion programs to about $1 million per year, Stoddard said.
The budget approved keeps the funding roughly flat for the agency’s 2017 fiscal year, at about $58 million. The budget forecast then increases to about $60 million in fiscal year 2018 and $67 million in fiscal year 2019.
The settlement agreement calls for the agency and regulators to reassess energy costs again each year in March, using the framework for the three-year spending plan that regulators approved Tuesday, which Stoddard said could result in changes to the total program budget.