The legislature is closing in on a major climate bill. Will real estate developers stand in the way?

As the state legislature enters the home stretch on a major new climate bill, a familiar battle line is being drawn, pitting real estate developers and climate advocates against each other on a crucial question: Should communities be allowed to ban fossil fuel hook-ups for new buildings?

That question concerns just one aspect of a wide-ranging bill. The measure will would reconcile an ambitious House bill focused on developing offshore wind with a Senate bill that includes a broader array of climate provisions, including measures to increase the number of electric vehicles on the road, make public transportation greener, and pour money into the development of clean energy.

But in the final days of negotiating the bill before it goes to the governor’s office, a contentious debate has arisen over a provision in the Senate bill that would allow 10 communities to ban fossil fuel hookups in new buildings.

It’s an issue that has dogged the state for years, since Brookline first attempted to ban new fossil fuel hookups in 2019. Attorney General Maura Healey subsequently advised that such a step violated state law. Since then, several communities have attempted to pass so-called “gas bans” via home rule petitions, but none have been implemented.

The measure proposed in the Senate bill would launch a pilot of sorts, allowing Cambridge, Newton, Brookline, Lexington, Arlington, Concord, Lincoln, Acton, Aquinnah, and West Tisbury to opt in.

Developers and fossil fuel interests are pushing back hard. In an email blast to its members Thursday, NAIOP Massachusetts, a lobby for developers and building owners, wrote: “FINAL CLIMATE BILL ANTICIPATED TO INCLUDE FOSSIL FUEL BANS – NAIOP NEEDS YOUR HELP.”

The response from climate groups was swift.

“We know that the gas industry and their allies are organizing and communicating with the lawmakers, opposing what we want,” wrote organizers from Mothers Out Front, on a web page that urges followers to press legislators to support the ban, along with other priorities.

As of noon Friday, 250 members had used the website to send emails to legislators, according to Andra Rose, who coordinates the legislative team for Mothers Out Front.

“Now is the time to stop it,” Rose said, referring to the state’s reliance on natural gas. “The way to stop it is with the lowest-hanging fruit: New buildings, and buildings that are going through major renovations.”

Tamara Small, the CEO of NAIOP, said there are risks to switching off fossil fuels entirely, including concerns that electrified sources of heat wouldn’t be adequate on the coldest days. She said full electrification could stress the grid, and that it would increase costs for builders and homeowners.

“In a nutshell, while our members are successfully pursuing electrification for all product types, only hybrid electrification is feasible at this time, particularly for office and lab properties,” she said via e-mail, referring to a combination of gas and electric.

Christine Milligan, spokeswoman for National Grid, agreed, calling hybrid electrification “the least costly, most effective way for our customers and the Commonwealth to achieve our net zero goal.”

But climate advocates — as well as Senator Mike Barrett, a Democrat from Lexington, the author of the Senate bill — said exemptions would be allowed for facilities like labs and hospitals, and that across the region, fully-electric buildings are coming online and proving that they can withstand the cold of a New England winter.

They also question whether it actually costs more to build a fully-electric building.

According to a report commissioned by the state Department of Energy Resources, thanks in large part to new rebates from Mass Save, it usually costs less to build fully electric. Compared to a house built according to the base building code, for instance, a fully electric, five-bedroom single-family home in Worcester would save a builder $20,062 and save the buyer $548 a year.

A large gas home, meanwhile, would cost $3,184 more than the base for the builder, while saving the buyer $302 a year compared to a house built to the base building code. An all-electric small single family home would provide even greater savings. A small single family home using gas, meanwhile, would cost a builder nearly $8,000 more than a house built to the base code, and would cost the homeowner $496 a year. A 6-unit multifamily also offered savings if all-electric.

According to the analysis, the only example that did not offer savings if it were fully electric was a townhouse, which could cost a builder $11,492 compared to the base code, but would still save the buyer $316 a year.

Advocates note that, unlike the situation when Brookline first proposed its ban in 2019, cities around the country are beginning to enact gas bans.

“This isn’t some sort of fanciful concept that no one is able to do,” said Kyle Murray, a senior policy advocate at the Acadia Center, a clean energy advocacy organization. “New York City‚ one of the largest cities and most economically powerful, just passed a ban on new fossil fuel hookups. New York is considering doing it statewide. DC is in the process of working on a ban on new fossil fuel hookups. This is not something that is out of left field, crazy, not able to be done.”

In Cambridge, housing advocate Becca Schofield, who co-chairs the non-profit A Better Cambridge and is an affordable housing developer, said she supports the fossil fuel banning measure, as long as the needs of low and moderate income people aren’t forgotten.

“The fear is that this would further limit affordable housing opportunities,” she said, adding that she would like to see exemptions for affordable housing developments. “Not that they’ll use it,” she said. “In my own work, I’m not making any new gas connections.”

The legislature technically has until the end of the month to finalize the bill, but it must send it to Governor Baker’s office by Thursday if it wants to ensure legislators will have time to override a veto from the governor’s office, should one come.

In late 2020, concerns from the real estate industry about the potential impacts on the price of housing development contributed to Baker vetoing the state’s landmark climate bill mandating that the state slash emissions to half of 1990 levels by 2030 and get to net-zero by 2050.

Baker, who has been vocal in his concern about a lack of affordable housing and the housing shortage in general, did not comment about the new proposal to allow gas bans in 10 communities. “The governor will carefully review any legislation that reaches his desk,” said spokeswoman Anisha Chakrabarti.

But activists worry that this issue could once again draw a veto.

“We can’t keep doing that — it doesn’t work for the health of the people or the planet,” said Karl Müller, a climate organizer with UU Mass Action and Mass Power Forward, who on Thursday and Friday was among a small group of activists singing and calling for the climate action at the State House.

“The stakes are high, and people need to see progress,” Müller said. “It’s an incredibly dark time to be an advocate, and to be caring about the planet and about justice. We need to keep moving forward.”

Read the full article in The Boston Globe here.

Inflation and supply chain problems blunt efforts to ramp up renewable energy

The bumpy road to better electric utility decisions

Maine’s transition to clean energy hinges on a wholesale transformation of the electrical grid. Several laws passed in recent years may improve grid planning, but legislating institutional change in the utility field could prove challenging.

A recent decision by the Maine Public Utilities Commission (PUC) points up how investor-owned utilities still steer the grid-planning process and how often they operate with clear conflicts of interest and a fuzzy understanding of their own systems. That’s a big problem since the PUC often defers to the presumed expertise of utilities in its decision-making.

In this instance, Central Maine Power requested permission to rebuild the Section 80 transmission line serving the Midcoast at a cost to New England ratepayers of $63.6 million. Now about 32 feet high, the transmission towers would increase to around 80 feet along a 22-mile corridor running from Winthrop to Warren.

For the first time ever in this case, ratepayers had two other state entities, armed with data from a third-party expert, advocating on their behalf. In a compelling written argument (see item 438), the Maine Office of the Public Advocate (OPA) and Efficiency Maine Trust claimed that the PUC’s preliminary justification for its decision “mischaracterizes the factual record” because it relies on “CMP’s outdated and undocumented assertions about the facts underlying the projected need for the Section 80 Rebuild.”

They further argued that “overbuilding” transmission lines  “is the most expensive way to respond to perceived but unknown needs and should not be approved here based on the scant CMP factual record before the Commission.” They advocated that the PUC defer a decision and seek a more thorough analysis from New England grid operators.

Their advocacy made this case more visible, generating an unusual degree of public comment. Nearly 400 residents (myself included) weighed in to express concerns about the enlarged transmission line.

The Commission acknowledged the input and then voted to grant CMP’s rebuild request.

First established in 1914, the PUC has been operating in much the same manner for a very long time. Like the grid itself, the Commission needs an overhaul.

For that institutional change to occur, more Maine residents need to understand what happens in the arcane world of PUC deliberations. Welcome to case number 2011-00138, the first test of Maine’s 2019 “Non Wires Alternatives” (NWA) Act.

Understanding the significance of non wires alternatives

While more or larger transmission lines are sometimes needed to modernize the grid, in many cases the most cost- and climate-conscious choice does not involve more wires, concrete or steel. Much of the electricity Maine will need to get vehicles and heating systems off fossil fuels will come from distributed energy resources (DER, in utility lingo), which can include new generation (like and wind and solar systems), battery storage and “demand response,” managing the load on the grid by providing rate incentives for consumers to use energy at off-peak times.

“In an ideal world, a lot of innovation could happen at the edge of the grid — in generation, storage, and demand response. The utility could be an active participant, moving us toward cleaner, cheaper options,” observed Seth Berry, a long-time co-chair of the Legislature’s Energy, Utilities and Technology committee, who stepped down in June to devote more time to Maine’s Our Power campaign for a consumer-owned utility.

In the real world, investor-owned utilities typically ignore distributed energy resources because their profits derive primarily from a rate of return pre-established with state utility commissions (typically upward of 9 percent) on investments made in new infrastructure. Put simply, they have a vested interest in overbuilding the grid.

To counter that, the law charged the public advocate’s office with overseeing work by an expert to assess costs and benefits for each planned infrastructure project, determining whether ratepayers would be better served by distributed energy resources rather than more and bigger power lines.

The non wires alternatives legislation is a small step toward remedying the huge “asymmetry of resources” built into the system, Berry noted, in which utilities have far more legal and financial resources and more grid information than regulators or advocates. By establishing an outside review, the law makes regulators somewhat less beholden to utilities for data.

The Maine OPA hired an international engineering firm with a strong background as electrical system planning experts, and it has proven “incredibly competent at the technical side of [this process],” said Andrew Landry, OPA’s deputy director. With funding covered by Maine ratepayers, the firm undertook the sort of expert analysis that the PUC cannot do in-house.

It concluded in this case that DER options, such as new solar farms and demand response, could meet future demands without a transmission line rebuild. Efficiency Maine, which Landry said plays a “very important role… [providing] supporting analysis and recommended solutions on the customer side of the meter,” agreed.

Why did an improved process still lead to a poor outcome?

Just as the law had intended, the PUC had far more complete information on which to base its decision, with an outside technical review and greater public input.

But none of that changed the Commission’s decision. This might not bode well for recent laws intended to ensure that the PUC factors climate and equity considerations into its decisions and oversees the grid-planning work of utilities. These measures do not have the built-in oversight mechanisms of the NWA Act, which could make their prospects for influencing PUC decision-making even slimmer.

Staff at the public advocate’s office took several lessons from this frustrating initial test case. For more collaborative outcomes, Landry said, the expert NWA Coordinator will need to “have access to [utilities’] planning at a much earlier stage” and utilities will need “to have extremely clear planning standards” identified at the outset. In this instance, he said, CMP was “frequently adding new planning standards that our alternative would have to satisfy.”

The OPA found a shocking lack of data underlying CMP’s transmission line rebuild request. “I don’t know how they do planning,” Landry said. “It doesn’t appear they have enough data about their system, particularly at the distribution level, to analyze system needs.”

Advocates of grid reform, while disappointed with the Commission’s decision, express gratitude for the active role the OPA and Efficiency Maine took. With a new public advocate who knows utilities well, Berry said, the office “has the capacity to do some historic good serving the people of Maine and our energy future.”

Jeff Marks, a senior policy advocate with the nonprofit Acadia Center, said he’s hopeful that the combined impact of recent laws “will force the PUC to look at things more closely and come to different decisions.” Just days ago, the PUC did approve a non-wires solution in the second test case under the new law, eliminating the need to rebuild the Section 31 transmission line in Topsham, a smaller and less costly project than Section 80. The settlement that the public advocate negotiated with CMP in that case is expected to save ratepayers an estimated $8.5 million over time and provide additional consumer benefits like energy-efficiency savings.

Going forward, more citizens and advocacy groups will need to scrutinize the regulatory process to ensure that the needs of ratepayers, climate and equity receive fair consideration. Until significant change occurs in the grid-planning process or utility business model, Marks noted, “we need to hold the PUC’s feet to the fire.”

Read the full article in The Maine Monitor here.

Federal court rules against part of New England grid operator reliability plan

A federal appeals court has thwarted part of a plan to improve the reliability of New England’s electric grid during the winter that would pay electricity generators extra for keeping fuel on-site.

As climate change causes more unreliable weather and conflict in Ukraine pinches energy markets, ISO-New England, the organization in charge of keeping the region’s lights on, is planning to provide payments to electricity generators to keep three days worth of fuel on hand.

Their plan, called the Inventoried Energy Program, is meant to improve the reliability of the grid during winter, in particular on some of the coldest days of the year. The program would be used for the winters between 2023 and 2025.

But after federal regulators approved the plan in 2020, a group of petitioners, including the state of New Hampshire, challenged their decision in court.

Challengers said certain kinds of electricity generators – those using coal, nuclear, biomass, and hydropower – already keep three days worth of fuel on site. ISO-New England would be paying those generators an extra $40 million dollars a year for just doing what they already do.

While the federal appeals court agreed with the challengers, saying those generators would not change their behavior in response to subsidies, it also upheld the rest of the Inventoried Energy Program.

Melissa Birchard, director of clean energy and grid reform at the Acadia Center, said the decision was a partial win.

“This decision from the court does at least protect consumers from some wasted expenditures,” she said.

But, Birchard said, what the grid needs is long-term solutions for reliability that move away from fossil fuels, which New England has to import from sometimes-volatile international markets.

Solutions that move towards renewable energy are also important for mitigating climate change, Birchard said.

“We need markets, regional markets that promote the development of clean reliability resources,” she said. “And right now, our markets aren’t doing that effectively. And so instead, we keep relying on fossil fuels.”

Energy efficiency, battery storage, and demand response programs – where consumers shift the time of day when they use electricity – can all contribute to reliability, Birchard said.

Read the full article in New Hampshire Public Radio here.

Maine energy efficiency plan puts priority on equity, electrification

Maine’s utility regulators have approved the state’s latest three-year energy efficiency plan, a set of programs and incentives that environmental and community advocates say will make it easier for low-income and rural residents to weatherize their homes and access electric vehicle chargers.

The plan substantially increases funding for programs serving low- and moderate-income households, continues efforts to expand electric vehicle charging infrastructure into more sparsely populated areas, and builds upon the state’s already nation-leading heat pump incentives. In total, the plan calls for spending just under $300 million over three years and projects a lifetime benefit totaling $1.5 billion for the state, in addition to the environmental gains it is expected to produce.

“We think that these benefits extend beyond the economic savings to include really important progress with carbon reductions and improving our energy independence, which has never been more important,” said Michael Stoddard, executive director of the Efficiency Maine Trust, the quasi-governmental agency that administers the bulk of the state’s efficiency programs.

Efficiency Maine puts out a new plan every three years, outlining its intended goals, spending, and programs. The newly approved plan, called Triennial Plan V, covers the years 2023 to 2025 and has been widely praised.

“This is a wonderful plan,” said Jeff Marks, Maine director for climate and energy nonprofit the Acadia Center. “This gets at a lot of the priorities in Maine.”

In recent years, Maine has made some ambitious climate commitments. In 2019, a new law set a goal of having 100,000 electric heat pumps installed in Maine by 2025, a target the state is well on the way to reaching. That same year, Gov. Janet Mills set a goal to make the state carbon-neutral by 2045. And, at the end of 2020, the state released Maine Won’t Wait, a comprehensive climate action plan that lays out a roadmap for reaching the state’s goal of cutting greenhouse gas emissions by 80% by 2050.

At the same time, this new plan arrives at a moment when Maine is increasingly feeling the strain of rising energy prices. At the beginning of the year, prices for electric supply went up between 83% and 89% for customers of Maine’s major electric utilities. More than 60% of homes in the state use heating oil for home heating, and prices for that fuel have more than doubled since the same time last year.

“We saw the family impacts of fossil fuel volatility really strike home this winter,” said Jack Shapiro, climate and clean energy director for the Natural Resources Council of Maine.

The plan’s strong focus on making cost-saving measures available to lower-income and rural residents is therefore especially welcome, advocates said.

The plan calls for spending some $33.2 million on services directed to low- and moderate-income households, an increase of more than 40% over the amount budgeted in the previous three-year plan. Much of this growth comes thanks to money from the American Rescue Plan Act, the federal COVID-response bill. This infusion of federal money will allow a sixfold increase in spending on weatherization services for households in the target group.

To scale up these services effectively, Efficiency Maine will in many cases conduct outreach directly to eligible households, help homeowners select the right products for their needs, and coordinate with vendors for installation.

This strategy is key for reaching some of Maine’s more isolated communities, said Suzanne McDonald, chief community development officer for the Island Institute, a nonprofit that supports island and coastal communities in Maine. Residents of rural areas may have a difficult time finding qualified contractors who are local or willing to drive or fly to remote towns or island communities. The direct outreach model can help overcome those barriers, she said.

Another $6.8 million will be directed into electric vehicle initiatives. The plan will continue to fund point-of-sale electric vehicle rebates — $2,000 for a new battery-electric car, $5,500 for a new car purchased by a low-income buyer, and $2,500 for a used vehicle for a low-income household. The plan also calls for the deployment of more charging infrastructure in rural parts of the state where opportunities to charge up are few and far between.

“What makes this plan feel like it’s made in Maine, for Maine is that it has a real commitment to equity in terms of income equity and geographic equity,” McDonald said.

Another $57.7 million — a 33% increase over the previous plan — is budgeted to accommodate expected increased activity in home energy savings programs, centered largely on weatherization and heat pump installation. And $86.8 million is allocated to commercial and industrial programs, including education about and incentives for energy-efficient heating and cooling, ventilation, and lighting systems.

While environmental and community advocates had strong praise for the new plan, they have started to think about strategies for even better serving Mainers and cutting energy use next time around. Particularly, many activists would like to see a focus on whole-home retrofits, considering heating, appliances, and weatherization as a system.

“If we can somehow incentivize whole-home packages, we will be able to make those improvements better and stronger,” Marks said.

As a whole, the plan provides a model other states should take note of, said Erin Cosgrove, public policy manager for the nonprofit Northeast Energy Efficiency Partnerships. Most notably, Maine’s heat pump program is charging ahead, she said, while other states in the region are still conducting pilot programs.

“They’re leading the way as we look at transitioning into electrification,” Cosgrove said. “Maine is really a shining example.”

Read the full article in Energy News Network here.

Average CMP bill to decrease almost 3% for home customers starting in July

Who says energy prices never go down?

The typical Central Maine Power residential customer will see their monthly bill decrease by $3.40 or 2.7 percent of the total bill, effective July 1, state regulators announced Tuesday.

The decrease is the result of an annual reconciliation of costs, power contracts and other financial considerations conducted by CMP and Versant Power, the state’s two largest electric utilities.

In approving the rate decreases for both utilities, the Maine Public Utilities Commission said the sale of energy from renewable energy projects, in particular, is driving generation costs down, resulting in lower customer bills.

Versant Power customers will see a slightly smaller rate decrease than CMP customers will get, the commission said, although it had yet to complete the exact calculations for Versant on Tuesday.

With consumer price inflation still out of control, PUC commissioners said they are interested in keeping Mainers’ electricity costs as low as possible this year.

“It’s not always easy to quantify the impact of the renewable energy procurements facilitated by the commission, as it can take some time to see the results,” PUC Chairman Philip Bartlett said. “This is an example of the payoff of those procurements, and we are pleased to be able to offer this positive news during a time when energy prices have been trending upward at an unprecedented rate.”

Maine law requires utilities to buy electricity generated by renewable energy suppliers at rates negotiated by the PUC. The utilities then generally sell that electricity on the open market. This year, the market was particularly favorable for those with a supply of electricity to sell.

The utilities were able to make millions of dollars off the sale of the electricity, which is then calculated in the year-end reconciliation of costs and revenue, resulting in a rate decrease for customers.

The PUC noted that the calculations are the result of “many moving parts,” but said the net impact is lower costs for customers of CMP, Versant Power-Bangor Hydro District residential customers and Versant Power-Maine Public District residential customers.

“This is welcome news for many Mainers as they face increasing costs across the board,” Joe Purington, president and chief executive of CMP, said in a statement.

State officials also applauded the rate cut, particularly since it was due at least in part to increased renewable energy generation in Maine.

“The PUC’s action shows the clear connection between renewable energy and lower electricity costs,” said Dan Burgess, director of the Governor’s Energy Office. “These savings from renewable energy couldn’t come at a better time for Maine people.”

The rate reduction also was lauded by the Acadia Center, which pushes for environmentally friendly energy policies.

“We’re tough on our utilities when their performance fails, but Maine homeowners will appreciate the small dip in their electricity delivery rates next month,” said Jeff Marks, the center’s Maine director.

Marks said new laws to ensure utility accountability and grid planning “will help ensure rate decreases are not an anomaly, especially as more solar and wind come online.”

Despite the short-term savings attributed in part to solar, Maine ratepayers are still expected to see significant future rate increases as more renewable energy projects come online.

State officials have estimated that power delivery rates – which only account for half the bill – could rise by at least 35 percent by 2025 if solar projects totaling 1,667 megawatts of capacity come online as planned.

Nailing down the precise impact on ratepayers isn’t easy because of the complicated formula that underpins Maine’s net energy billing incentive program for solar developers and uncertainty about the number of projects that ultimately will get built.

Read the full article in Portland Press Herald here.

Rhode Island House Members’ Proposed $13.6 Billion Budget Fails to Fund EC4

PROVIDENCE — The agency that is taking the lead on the state’s climate-change response will have to go another year without a budget, after House lawmakers failed to include funding for the Executive Climate Change Coordinating Committee (EC4) in their spending plan.

House members unveiled their version of a $13.6 billion state budget last week.

Gov. Dan McKee’s budget proposal in January suggested “scooping” $6 million annually from state energy-efficiency money to fund the committee, which operates without funding and relies on a single staff member on loan from the Rhode Island Department of Environmental Management. While the move from the governor was not popular among local environmental groups, the House did not provide an alternative method of funding the EC4.

“The ratepayers scoop of energy-efficiency funds has been removed, which is a good thing, we advocated for that,” said Hank Webster, Rhode Island director of the Acadia Center. “However, we also advocated for policymakers to find another way to fund the EC4’s activities.”

DEM director and EC4 chairman Terry Gray told ecoRI earlier this year that the greater impact would come from the committee having no operating budget. “From my standpoint as the EC4 chair, we need money to implement the Act on Climate,” he said. “The source of the money can be debated, and where it comes from is I think secondary to the fact that we get some kind of investment in the EC4 to make the work happen.”

Still, the fiscal 2023 budget indicates lawmakers are ready to spend money and resources on environmental management. DEM is slated to receive 16 new full-time positions under the House version of the budget, as opposed to the nine it requested earlier this year. At least six of those new hires would be in the department’s permitting and compliance offices, areas in which staffing for years has been seen by outside observers as insufficient.

The Coastal Resources Management Council (CRMC) would receive $150,000 to hire a full-time hearing officer, an attorney, to adjudicate contested decisions by its voting body. McKee had proposed $15,000 for a part-time hearing officer. Hiring a full-time hearing officer was one of the short-term recommendations from a special legislative commission created to study CRMC reorganization.

Lawmakers are also giving $4 million to the Ocean State Climate Adaptation and Resilience (OSCAR) Fund. The fund was created last year by the General Assembly, but at the last minute its funding mechanism — charging a nickel per barrel of oil and petroleum products imported into the state — was stripped from the bill.

“It’s really great news, we’ve been advocating for OSCAR for five years,” said Topher Hamblett, director of advocacy and policy for Save The Bay.

OSCAR awards grants to municipalities to improve climate resiliency by using and improving “natural” features: resizing culverts or restoring floodplains and saltwater marshes, for example. The program is in addition to Municipal Resilience Program grants administered by the Rhode Island Infrastructure Bank.

The House Finance Committee also recommended $25 million from State Fiscal Recovery funds for an electric heat pump incentive program, designed to help low- and moderate-income households buy and install electric heating systems to replace heating oil or natural gas systems. Residential heating accounts for 18.3% of all greenhouse gas emissions in Rhode Island.

Starting in September, the Rhode Island Public Transit Authority (RIPTA) will run a one-year pilot program with free bus service on the R-Line, a popular route starting at Broad Street in South Providence and running to the Pawtucket Transit Center on Roosevelt Avenue. RIPTA will be mandated to track ridership data and submit a report to the Legislature by March 2024 for further evaluation of the program. Sen. Meghan Kallman, D-Pawtucket, and Rep. Leonela Felix, D-Pawtucket, had introduced legislation this session to make all RIPTA bus routes free. The bill was held for further study.

The budget is far from final. Lawmakers’ version of the budget is scheduled for a full vote of the House on Thursday afternoon, and legislators may still make changes on the floor.

Read the full article in ecoRI News here.

Maine plan for wood-fired power plants draws praise and skepticism

A new law encouraging the development of wood-fired combined heat and power plants in Maine is drawing praise for its potential to benefit the economy and the environment.

But some climate activists are skeptical, saying questions remain about whether the program will cut carbon emissions as intended.

The legislation, signed by Gov. Janet Mills in April, establishes a program to commission projects that will burn wood to create electricity and also capture the heat produced for use on-site — heat that would go to waste in a conventional power plant.

Proposals for these facilities are expected to come from forestry or forest products businesses that could use their own wood byproducts to fuel the plants, saving them money on heat and electricity costs and providing an extra revenue stream when excess power is sold back into the grid.

“It’s renewable energy that is produced by local loggers and providing jobs for our local community,” said James Robbins, president of Robbins Lumber in Searsport, Maine, which has operated its own combined heat and power plant since 2018.

Supporters like Robbins say these facilities will uplift struggling sectors of the economy while helping reach the goals of Maine’s climate plan, which calls for the state to reduce emissions by 80% by 2050. Some environmental activists, however, doubt that wood can ever be an efficient fuel and worry that these projects will in fact increase carbon emissions.

“This is really an economic development tool to help prop up mills and not a climate solution,” said Greg Cunningham, director of the clean energy and climate change program at the Conservation Law Foundation.

Economy and environment?

Over the past 15 years, at least four of Maine’s paper mills have shut down, citing competition from overseas, decreasing demand, and soaring energy costs. A sixth had its operations sharply curtailed by an explosion at the facility in 2020.

These closures have meant less of a market for the wood chips and low-grade wood byproducts — often called residual wood — that lumber mills and loggers have generally sold as raw material for paper production. And with less demand, prices fell sharply, Robbins said.

“It created a huge surplus on the market here,” he said.

For businesses struggling to find buyers for their residual wood, the opportunity to build combined heat and power plants offers financial benefits. The systems can reduce or eliminate the cost of heating fuel, and the power produced can be sold back to the grid for additional revenue. These facilities could also help the industry as a whole by creating new markets for residual wood, thus buoying prices.

Robbins Lumber uses the heat generated from its system to power kilns that dry out lumber before sale. The electricity is all sold back into the grid through a power purchase agreement. The arrangement has been doing exactly what it was intended to do, Robbins said.

“We are also burning sawdust, bark, wood chips, and biomass from our outside contractors,” he said. “It’s definitely created a consistent market for residuals, which is what we hoped for.”

Advocates also believe these plants will be environmentally beneficial. If not put to another use, residual wood might otherwise have been left to decompose and release its stored carbon into the atmosphere. Used in one of these systems, however, the wood will displace the fossil fuels that would otherwise have been used to generate the same heat and power.

“Yes, it’s releasing CO2, but it was going to release CO2 through decomposition anyway,” said Ivan Fernandez, a professor at the University of Maine’s School of Forest Resources and a member of the Maine Climate Council. “As far as what the atmosphere sees, [combined heat and power] is a really good tool in the toolbox in our climate response.”

On-site combined heat and power facilities also make it easier for logging operations to thin small or weak trees from the forest and put that wood to use, Fernandez said. This sort of culling helps the larger trees grow yet more and sequester even more carbon, so there is no new loss of carbon capture because of the removal of the smaller trees, he said.

Furthermore, the continual growth of new trees allows for the carbon released by burning wood to be naturally recaptured, said Patrick Strauch, executive director of the Maine Forest Products Council.

“We look at it as a pretty good balance,” he said. “There is no doubt that it contributes carbon to the atmosphere, but our forest resources at the same time are pulling carbon out.”

Climate advocate unconvinced

Not everyone is convinced of the environmental wisdom of wood-fired combined heat and power, however. Burning wood produces more carbon dioxide per unit of heat generated than burning natural gas or heating oil. Many climate advocates worry that the carbon-capture capacity of forests is not enough to offset these higher emissions.

“There is significant disagreement on whether it is truly carbon neutral and emission-free,” said Jeff Marks, Maine director and senior policy advocate for environmental nonprofit the Acadia Center.

In theory, combined heat and power plants can be 75% to 90% efficient, according to some research. By way of comparison, centralized electric power generation and onsite heat production are 31% and 80% efficient, respectively, according to a report from Pennsylvania State University.

But many variables can lower that number. Of particular concern with wood is the moisture level of the fuel used: The more water in the wood, the less efficiently it burns. Residual wood from wood harvesting operations is likely to have a higher moisture content than wood from lumber processing.

Furthermore, the exact rules regulating the new law have yet to be hashed out, leaving more room for doubt, Cunningham said. The law, for example, requires projects to be “highly efficient,” but leaves it to the state Public Utilities Commission to define that term. The legislation also requires a biennial report assessing the success and sustainability of the program but, again, the details are scarce. And the law includes no provisions for the monitoring or enforcement of the rules it creates.

These factors leave Cunningham skeptical that wood-fired combined heat and power could ever be a climate-smart choice.

“It will not be highly efficient — it’s not feasible with a wood fuel,” he said. “It will not to any extent be a climate solution.”

The law caps the program at a total capacity of 20 megawatts statewide, a tiny fraction of the 3,344 megawatts of generating capacity the state already has. Still, the climate implications of the new law matter, Cunningham said.

“The money available in the state of Maine to fight climate change and invest in clean energy programs is finite,” he said. “When any amount of it is siphoned off for an anti-climate program, it’s problematic.”

Read the full article at Energy News Network here.

Federal Regulators Drop Obstacle to Funding Renewable Energy… in 3 Years

An obscure rule that blocks state-subsidized renewable energy projects from finding funding in a key New England energy market will sunset in three years – but renewable energy advocates say that isn’t soon enough to keep consumers from having to pay twice for an impending rush of offshore wind projects

The Federal Energy Regulatory Commission approved a plan by ISO-New England – which operates the region’s electric grid –  to phase out a controversial minimum offer price rule by 2025.

The rule – which was intended to exclude state-funded renewable projects from entering an annual auction of future energy generating capacity at low prices – has been a point of frustration for New England states with ambitious renewable energy goals.

Those states, including Connecticut, contend the rule forces electric customers to pay twice for the same generating capacity – once for renewables through state contracts, and again for mostly natural gas plants through the regional capacity auction.

The rule also made it more challenging to develop new, large-scale renewable energy projects, said Melissa Birchard, director for clean energy and grid reform at Acadia Center.

“We don’t even know exactly how much it’s depressing the development of clean energy,” warned Birchard. “Without the financial support to develop new resources, there’s a whole world of clean energy that may not be getting developed.”

In testimony to FERC, Susannah Hatch, regional lead for New England for Offshore Wind, noted that both the 800-megawatt Vineyard Wind project set to go online next year, and three other projects totaling 2,300 megawatts scheduled to go online in 2025, won’t be able to fully participate in the next two capacity auctions funding projects for 2026 and 2027.

Hatch told CT Examiner that those projects will still be built even though they won’t be able to fully participate in the capacity market. The real issue, she said, is that their capacity won’t be counted in the regional market, so customers will be stuck paying for a different power plant providing redundant capacity, she said – likely a natural gas-burning power plant.

“It will require ratepayers to pay for unnecessary capacity, so bills are going to go up in this day and age when that’s already happening because of foreign conflicts and the price volatility of fossil fuels,” Hatch said.

Birchard said that a limited exception will allow some offshore wind projects to participate in the next two auctions, but that won’t be nearly enough.

“When you add them up, the offshore wind projects alone substantially exceed [the exception],” Birchard said. “And that doesn’t account for battery storage or other clean energy resources.”

Matt Kakley, a spokesman for ISO-New England, said the organization believes the exception is large enough to cover the offshore wind resources that would actually want to enter the market in those two auctions, and that it’s “incredibly unlikely” that the minimum price would come into play for battery storage in that time.

“We’re pleased that the Commission saw this proposal for what it is — a reasonable step forward on New England’s transition to a decarbonized future,” Kakley said. “Despite claims to the contrary, this transition will provide a clear path for clean energy resources ready to enter the market over the next two auctions, while affording the region time to tackle other needed market reforms.”

But with wind projects accounting for 60 percent of proposals for new generation, and solar and battery storage making up another 36 percent – a rule that excludes much of that new generating capacity was unsustainable, ISO-New England told FERC.

But ending the rule too quickly, the ISO warned, could disrupt the market and make the grid less reliable. If, for example, the construction of those projects was delayed after clearing the auction, the renewables might not come online before the legacy plants are shut down. That could leave the region with less electric generation than it needs.

In its decision, FERC said the two-year phase out provides the necessary time for the market to make an “orderly transition” to a new mix of generating resources, including more weather-dependent renewables.

FERC Chairman Richard Glick, who voted in favor of the two-year phase out of the rule, said that despite his vote, he believes ISO-New England could and should have “done better” to end the rule immediately.

But Glick said even the delayed end to the minimum offer price rule represented a major step forward. Glick wrote that under previous orders FERC turned minimum offer price rules into a tool for blocking efforts by individual states to sponsor renewable energy projects.

That fight threatened consumers, the environment, and the viability of capacity markets, Glick said – as frustrated states, including Connecticut, considered abandoning those markets altogether.

“We need to do better and stop stalling,” Birchard said. “We need to keep beating that drum, because there’s a slew of additional reforms that need to take place over the next two or three years so we can move forward with our decarbonization goals.”

DEEP Commissioner Katie Dykes said that the department is still reviewing the decision, but said she is glad that it affirms an end date for the MOPR.

“We must redouble our efforts now on the further, significant reforms of the markets needed for a clean, reliable, affordable grid,” Dykes said.

Read the full article in The Connecticut Examiner here. 

Federal regulators uphold controversial grid proposal that could slow clean energy