Signed into law on June 9, 2009, the Community‐Based Renewable Energy Act promotes the
development of locally‐owned renewable energy. The Act connects three critical policy
objectives—environmental security, economic development and energy independence.
This new law defines community renewable energy to be renewable energy produced by an enterprise that is primarily owned by local entities in the state of Maine. It establishes a preference for the state to buy this energy whenever it is economically feasible to do so, and creates a standard “green power” option in addition to the standard offer—thereby providing consumers with that same purchasing opportunity. The Act also creates a pilot program to directly incentivize community renewable energy generation.
Why is Community Renewable Energy So Important?
According to the Office of Energy Independence and Security, Maine sends nearly $6.8 billion to out-of-state energy providers every year. That means nearly $6000 per person leaves Maine’s economy every year to keep our lights on and our cars rolling.
Yet Maine is blessed with vast natural renewable energy resources. Regardless of who owns the project, development of these resources can help us keep more of that money in our local economy, helping to create jobs and build wealth in our communities instead of exporting that wealth elsewhere.
These benefits are far greater still when our energy generation facilities are owned by local people. Your neighbors have a vested interest in the health and well-being of their community, because they too have to live with the facilities they build and the potential complaints of their neighbors.
Equally important is the economic gain that comes from local ownership. Studies investigating this issue with wind power development have demonstrated that local ownership doubles or even triples the host community’s economic gains from any given project.
Community renewable energy cannot realistically supply all Maine’s energy needs, but that is no reason not to favor local ownership of a project whenever the will and resources are available within our state. This legislation is our state’s way of expressing that preference while stimulating our critically needed transition to secure, planet‐friendly energy sources.
Direct Incentives Pilot Program
The Act also creates a pilot program to provide a choice of direct incentives to the developers of community renewable energy projects, including individuals with small projects that can sell directly into their grid to supply their neighbors with clean, home‐grown energy. To take advantage of these incentives, developers of larger projects must show local support for their project if it exceeds 1 MW of generating capacity by obtaining a resolution of support from the relevant municipal government or native tribe. This requirement will ensure that a community-based facility is indeed welcomed in the local community.
In return, participating developers may choose to establish a 20-year long-term purchasing contract to provide power to the standard offer pool, providing the developers with a stable rate of return on their investment. Alternatively, developers can claim a 50% bonus on their renewable energy certificates when applied to Maine’s portfolio standard requirement.
During the pilot, a number of restrictions will protect ratepayers. Most importantly, the program is initially limited to 50 MW of generating capacity, and there will be additional limits for each standard offer service territory. There is also a per-project cap of 10 MW.
Long-term contracts with a capacity above 1 MW will be competitively bid, and no contract can pay more than a 10¢ per kWh annual average. That price is less than the highest price Maine consumers have paid recently.
Thanks to hard work and ultimately unanimous support from the Utilities and Energy Committee, the Community-Based Renewable Energy Act was enacted and signed into law. Key contributors included members of the Mid‐Coast Green Collaborative, Community
Energy Partners, Maine Rural Partners, Ed Holt & Associates, the Natural Resources Council
of Maine, the Office of Public Advocate, the Public Utilities Commission, Office of Energy
Independence & Security, Central Maine Power Company, legislative analyst Lucia Nixon and
the following legislators: Rep Bruce MacDonald, Rep Herb Adams, Rep Ken Fletcher, Rep
David van Wie, Rep Stacey Fitts, Rep Michael Thibodeau and Senator Barry Hobbins.
Crafters of the legislation gratefully acknowledge helpful national advice provided by
Windustry, Climate Solutions, the Institute for Local Self‐Reliance, the Minnesota Dept. of
Commerce and American Corn Growers Federation, as well as the positive attitude of the
Maine Public Utilities Commission, which will carry the load in implementing this legislation.
Council on the Future of Vermont
The Council on the Future of Vermont is a two year project of the Vermont Council on Rural Development. From 2007 to 2009, the Council learned from Vermonters about their hopes, aspirations and visions for the future of the state.
According to the Office of Energy Independence and Security, Maine sends nearly $6.8 billion to out-of-state energy providers every year. That means nearly $6000 per person leaves Maine’s economy every year to keep our lights on and our cars rolling.
