Testimony in Favor of LD 132

Friends of Maine’s Mountains  PO Box 60  Weld, ME  04285

March 18, 2015

Senator Woodsome, Representative Dion, and members of the committee, I am Christopher O’Neil, the Director of Public Affairs at Friends of Maine’s Mountains, testifying in support of LD 132, An Act to Remove the 100 Megawatt Limit on Hydropower under the Renewable Resources Laws.

In a minute I will give you multiple reasons why this bill is good policy – indeed critical policy - but first a little perspective.

In 1998, the 118th Legislature passed LD 2059, An Act to Repeal Certain Archaic and Unenforced Laws. In perhaps the most sweeping legislative act in Maine history, legislators acknowledged that circumstances and times change, Maine statutes were amended in several ways, including:

- Repeal the law providing owners of steamboats with a lien on the logs they tow.

- Repeal the laws governing duels, like the one saying it’s ok to duel on Wednesday but not on Sunday.

- Repeal the law authorizing towns to prohibit brick burning.

- Repeal the law requiring sheriffs to be whitewash their jails every May or June, and repeal the law making sheriffs monetarily liable when a prisoner escapes.

- Repeal the law requiring that prisoners being discharged from jail be given clothing costing up to $10, that they be given train fare up to $8, and pocket-cash up to $2.

Why did the 118th Legislature repeal those laws? Actually it was because the House Majority Whip (in the first year of the term limits era) had a bunch of talented freshman legislators he needed to keep busy, and who needed to learn about “the process.” While the repeal bill they finally wrote and enacted was sweeping in its scope, it was rather comical because of its actual policy insignificance. The group, including at least two House members who would later go on to become judges, would meet over brown bag lunches to scour the statutes for laws to repeal. But fundamentally those laws were picked for repeal because they were anachronistic. Times had changed so the law needed to change too. Not unlike the 100 megawatt law.

The 100 megawatt law is different; different because it is not “archaic and unenforced.” Unlike brick-burning laws, this law actually matters. It matters a lot, because it is an affirmative “policy of the state” that greatly impacts our economy and our environment. Times and circumstances have changed, so energy policy should change too.

As you know, the Maine RPS - and more specifically RECs - do not drive the buildup of new Maine generation such as wind. Sprawling industrial wind factories on Maine mountains are being driven by RPS mandates on southern New England utilities. Of course, we in Maine are directly impacted by the so-called “investment” in these wind factories that are unnecessary and essentially useless to the New England Grid, and entirely useless to Maine. Take your pick: high-cost wind electricity that destroys wild Maine while allowing continued emissions…or a leaner, cleaner, more affordable grid that employs material amounts of big hydro.

“Useless” is a strong term. But FMM’s warning several years ago has come to fruition. While we have blithely spent over one billion dollars on high- impact/low-benefit Maine wind generation, our grid has actually grown increasingly reliant on dirty and expensive oil and coal generation. This wasn’t supposed to happen! Our grossly negligent misallocation of infrastructure dollars should have gone not to useless wind turbines, but toward the useful and necessary infrastructure: high-capacity transmission from the north and expanded natural gas infrastructure from the south. Tragically, our blind devotion to low quality wind energy has wasted precious time and money in our war against climate change.

While we now know that our billions spent on wind (and even more on transmission) cannot prove a single ton of CO2 reduction or fossil fuel avoidance, Maine law says that fact is not only wrong, but it doesn’t matter. Last year a member of this committee asked a wind lobbyist if he thinks wind power really does provide “energy and emissions benefits” as the Wind Law decrees. Pressed repeatedly for a straight answer to the question, all the wind lobbyist repeatedly said was, “the law says so.”

“But do you think it does?”

“The law says so.”

Translate: “We’ve got our golden ring and we are not about to let it go.” Why is that relevant? Maine electricity policy was re-written in the last decade. Now we know what didn’t work, so we know how to fix it. We cannot let special interests stop us from making these critical fixes. The 100 megawatt limit won’t appreciably impact the Maine market directly, but it could pay huge dividends to the extent Maine is impacted by our participation in the New England grid. Working together with our partner New England states, we should be doing all we can to open the door to market competition that will best satisfy our engineering, environmental, and economic needs. As Connecticut, Rhode Island, and Massachusetts use Maine wind factories to fulfill their RPS mandates, they are doing nothing to replace dirty old generators and they continue to pollute our air. It is window dressing, and our windows are being dressed by massive wind projects that produce negligible amounts of useful electricity. There are six possible transmission projects on the drawing board that could each send 1000+ megawatts of high quality electricity from Canada into New England. Policies like the 100 megawatt limit serve as a deterrent to this critical infrastructure.

In a few minutes a parade of opponents to LD 132 will get up here to remind you how they paid a Muskie School professor to write a paper quantifying Burger King employees as among the beneficiaries of the wind boom. They commission these studies to help convince 80% of Mainers that the emperor’s new clothes really are beautiful. Before they come up here, let us remind ourselves of six sobering facts. Because facts matter.

1. Our natural gas deficiencies will be remedied, albeit not soon enough. But as long as New England desires escalating amounts of renewable and low emission electricity, we also must get connected to more big hydro. New England CO2 emissions are almost 200 million metric tons annually. If we were to build out Maine’s 3000 megawatt wind goal, covering all of northern Maine with glowing pinwheels - and using the very optimistic projections of the wind lobby – we might at best reduce CO2 by one percent, if at all.

2. We know that Nalcor and HQ are not going to give us underpriced electricity. But cut through the smoke. It isn’t so much a question of price as it is quality. Quite simply, big hydro is the good stuff. The 100 megawatt limit is tantamount to Maine charging a tariff on Florida oranges so we can protect Maine’s citrus growers. Fact is, Florida does oranges better than we do, just as our friends to the north do electricity better than we do, so we should stop wasting our money on dry little brown oranges.

3. There are 5000 to 8000 megawatts of base load and peak load generation capacity in New England that could be retired before you are term limited. That firm capacity is as much as a quarter of our fleet. We know that low quality wind power cannot perform base load or peak load grid functions, therefore it cannot replace or even displace those aging generators. Big hydro can. Yet wind gets this hallowed place in statute, so we are hurtling for a massive blow to Maine’s invaluable Quality of Place, and we are still going to be wanting for the high quality generation that can sustain our grid. This will be costly, and will continue to send us dirty emissions.

4. ISO-NE tells you that in the last five years and the next five years, the cost for Transmission is $11 Billion. Maine’s 8% share of that is roughly $880 million. And you can rest assured that as FMM pushes wind generation further from load, those T&D estimates will be much greater. The policy in question today is in large part driving this traumatic extraction of disposable income from the Maine economy, via the delivery side of our light bills. The reports you get trumpeting the economic benefits of wind apparently don’t think $880 million matters.

5. Maine annual electricity consumption is about 11.4 million megawatt Hours. If we increase the delivery side or the energy side of our light bills by just $10 per MWH (or a penny per KWH) Mainers will lose $114 million, not including the multiplier effect. Based on Maine’s median income, that disappearance of money is the economic equivalent of losing 4000 jobs. How many of you would pass on a ribbon cutting where an employer is creating 400 jobs? 40 jobs? Even 4 jobs?

6. The ISO-NE announced a year ago that for the first time in eight years, capacity had dropped significantly, so after the auction capacity payments this cycle almost tripled, from $1 Billion to $3 Billion. Fast forward to this month: they determined that $3 billion won’t do it, so the 2018 number is $4 billion! This $4 billion comes out of our light bills. Keep in mind that the total wholesale cost for New England energy in all of 2012 was $5 billion. There is an increased likelihood that southeastern Massachusetts and Rhode Island could have supply problems. This auction also includes payments for import capacity and demand curtailment, i.e., payments to to shut down power use at big power consumers. No number of wind turbines will remedy this problem. We need firm capacity. It must be dispatchable. It would be a bonus if it is also clean! Look north for scalable generation that we need.

Finally, as I was writing this testimony I logged in and perused the ISO-NE dashboard to see what was going on. It was cold and very windy outside. I compared the average generation mix and cost with the trending numbers. On that day, as has become all to frequent, was a stress peak time for our 34,000 MW grid. Load was moderately high at about 20,000 MW. But dirty expensive Coal and Oil, which two years ago combined for only 4% of all annual generation in New England, were cranking at 34%. Gas, which averages more than 50% of generation, was sputtering at 23%. Speaking of sputtering, New England’s multi-billion dollar wind fleet was at 1%. And the cost was over $400 per MWH, which is ten times the average. Industrial facilities like Maine paper mills close up shop and send workers home when this happens. The same upside-down grid scenario played out last summer, and it will again this summer, siphoning off millions of precious dollars from our economy while increasing CO2 emissions and smog. Why does this matter? Because, as you well know, we are hampered by critical infrastructure deficiencies for natural gas transmission. Yet Maine policy says spending billions on wind power is more important. If our roof had a hole in it and our walls needed insulating, would we spend the paycheck on lawn ornaments and patio furniture? Maine needs to encourage the proliferation of high quality, affordable big hydro.

We talk a lot in this room about tangible benefits. But we don’t talk enough about tangible impacts such as the few that I have just presented, most of which are a whole lot more tangible than the so-called benefits. Balancing impacts and benefits requires weighing both, not just one side of the equation. Most of the so-called studies that were used to justify our backward policies, and that are now used to defend them, hold a thumb on the benefit side of the scale, and they rarely even acknowledge the impact side, let alone weigh impact. The lobbyists who are clutching their bass ring would lead you to believe that impact doesn’t matter. FMM begs to differ. LD 132 is a step in the right direction, in that it seeks to remove the thumb.

Speaking of thumbs, as a rule of thumb it is perfectly acceptable and expected that legislators learn from experience and make adjustments based on that experience. Remember Car Test? Changing policy is why we have elections and come here year after year. No law is sacrosanct, save for those to whom it delivers a brass ring.

FMM supports solid policy. We support efficiency and conservation. We support high quality renewables. We support reasonable incentives for consumer-owned solar panels, which could take a real bite out of peak load. We support measures that reduce emissions. And we support energy policies that protect our economy. FMM recognizes that only two states in the country are cleaner when it comes to CO2 from electricity generation, that Maine’s RPS is the highest in the nation, and that Maine has already “gotten off” oil and coal. This is all good. But we cannot be foolish.

LD 132 opens the door to greater competition and high quality, clean, sustainable energy. It poises us to solve our grid climate challenges. It helps apply a tourniquet on the massive bleeding that flawed and “archaic” energy policies are causing our economy. The critical and unavoidable issues raised in this bill are hitting you in the head. They matter. A lot. And they need to be revisited. Opportunity knocks. Let’s stop dueling, sit down with our brown bag lunches like they did in 1998, and fix it this year.