|Select Economic and Energy Data†||Value||State Rank|
|Real Gross Domestic Product, per capita||$30,637||10th lowest|
|Gasoline Price, per gallon||$2.81||22nd highest|
|Electricity Price, per kWh||12.89¢||11th highest|
Maine’s electricity is among the most expensive in the nation. Over half of the state’s electricity is generated from natural gas, while another quarter of the state’s demand is supplied from hydroelectricity. Maine uses more electricity from burning wood and wood waste than any other state, as these resources provide about 20 percent of the state’s electricity.
While Maine does not have fossil fuel resources, it has renewable energy potential. Because of Maine’s substantial use of wood as fuel, Maine has the highest percentage of non-hydroelectric renewable energy use in the country.
Regulatory Impediments to Affordable Energy
Although affordable energy is a vital component of a healthy economy, regulations frequently increase energy costs. Regulations imposed in the name of reducing carbon dioxide and greenhouse gas emissions are especially costly. Carbon dioxide is a natural byproduct of the combustion of all carbon-containing fuels, such as natural gas, petroleum, coal, wood, and other organic materials. Today, there is no cost-effective way to capture the carbon dioxide output of the combustion of these fuels, so any regulations that limit carbon dioxide emissions will either limit the use of natural gas, petroleum, and coal, or dramatically increase their prices.
Below are some facts about the regulatory environment in Maine that are likely to affect the cost of energy or the cost of using energy.
- Maine does not cap greenhouse gas emissions. However, as a member of the Regional Greenhouse Gas Initiative, it has imposed a cap on greenhouse gas emissions from power plants.
- Maine is a member of the Regional Greenhouse Gas Initiative (RGGI), a regional agreement among ten Northeast states to limit greenhouse gas emissions. This agreement requires states to cap carbon dioxide emissions from the electrical generation sector and to reduce those emissions by 10 percent by 2018 through a cap-and-trade scheme.
- Maine requires utilities to sell a certain percentage of electricity from renewable sources. The state’s original renewable portfolio standard, enacted in 1999, required utilities to generate 30 percent of their retail electricity sales from renewable sources. [i] A new renewable portfolio standard, enacted in 2006, requires utilities to increase new renewable capacity by 10 percent (placed into service after September 1, 2005) by 2017.[ii]
- Maine does not require gasoline to be mixed with renewable fuels.
- Maine imposes automobile fuel economy standards similar to California’s, which include attempts to regulate greenhouse gas emissions from new vehicles. Maine’s Board of Environmental Protection adopted amendments to Chapter 127, New Motor Vehicle Emission Standards, in 2005, adopting California’s vehicle emissions standards.[iii]
- Maine requires new residential and commercial buildings to meet energy efficiency standards. Residential buildings must meet the 2003 International Energy Conservation Code (IECC), while commercial buildings must meet the 2003 IECC or ASHRAE 90.1-2001. The IECC (developed by the International Code Council) and ASHRAE (developed by the American Society of Heating and Refrigeration and Air Conditioning Engineers) are model codes that mandate certain energy efficiency standards. In 2010, the 2009 versions of the IECC and ASHRAE 90.1 will be effective in Maine.[iv] New state buildings must also meet energy efficiency standards. Governor John Baldacci signed a 2003 executive order that required new, expanded, or renovated state buildings to incorporate the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) standards, if cost effective.[v] The planning and design of new and substantially renovated state buildings must also consider energy efficiency and aim to exceed the state’s commercial energy efficiency standards by at least 20 percent.[vi] Since 2007, the state government has also purchased all of its electricity from renewable sources.[vii]
- Maine does not impose state-based appliance efficiency standards.
- Maine does not allow utilities to “decouple” revenue from the sale of electricity and natural gas. Some states decouple revenue from actual sales, allowing utilities to increase their revenue by selling less electricity and natural gas.
† Data Sources: Real GDP per capita 2008: Bureau of Economic Analysis, News Release: GDP by State (June 2, 2009), http://www.bea.gov/newsreleases/regional/gdp_ state/gsp_newsrelease.htm; Unemployment: Bureau of Labor Statistics, Regional and State Employment and Unemployment–February 2010 (Mar. 10, 2010); Gasoline Prices: American Automobile Association, AAA Daily Fuel Gauge Report (Mar. 30, 2010); Electricity Prices: Energy Information Administration, Electric Power Monthly, Table 5.6.B., Average Retail Price of Electricity, (March 15, 2010), http://www.eia.doe.gov/cneaf/electricity/epm/table5_6_b.html; Electricity Generation Data: Energy Information Administration, Electricity Generation 2009, http://www.eia.doe.gov/cneaf/electricity/epa/generation_state_mon.xls.
[i] Me. Rev. Stat. Title 35-A §3210 (2009), http://www.mainelegislature.org/legis/statutes/35-A/title35-Asec3210.html.
[ii] Public Utilities Commission, Portfolio Requirement, CMR 65-407-311, http://www.mainelegislature.org/legis/bills/bills_123rd/chapters/PUBLIC403.asp.
[iii] Maine Department of Environmental Protection, 06-096, Ch. 127, New Motor Vehicle Emission Standards, http://www.maine.gov/sos/cec/rules/06/096/096c127.doc.
[iv] Building Codes Assistance Project, Code Status: Maine, http://bcap-energy.org/node/72.
[v] Me. Exec. Order No. 08 FY 04/05 (Nov. 24, 2003), Governor John Baldacci, Executive Order Regarding the use of “LEED” Building Standards for State Buildings, http://www.maine.gov/tools/whatsnew/index.php?topic=Gov_Executive_Orders&id=21346&v=Article.
[vi] Database of State Incentives for Renewables and Efficiency, Maine Energy-Efficient Building Standards for State Facilities, http://dsireusa.org/incentives/incentive.cfm?Incentive_Code=ME09R&re=0&ee=1.
[vii] Maine Department of Environmental Protection, State of Maine BGS Attains 41% Reduction in Carbon Emissions and State Agencies Work Together Toward Clean Government Initiative Goals, http://www.maine.gov/dep/innovation/gcc/gccbgs.htm.