An Act To Enhance Maine's Energy Independence and Security
Maine Legislature, Session 122, LD 2041
Committee: Utilities and Energy
Sponsors: FLETCHER, BARTLETT, ADAMS, BLISS, BRAUTIGAM, CEBRA, EBERLE, BRENNAN, SNOWE-MELLO
Amends: 36 MRSA §3203, 35-A MRSA §3212

Legislative Document 
No. 2041 
H.P.1439 
House of Representatives, March 1,2006 
An Act To Enhance Maine's Energy Independence and Security 
Reference to the Committee on Utilities and Energy suggested and ordered printed. 
'7l/~ frI· 7llt7£~ 
MILLICENT M. MacFARLAND 
Clerk 
Presented by Representative FLETCHER of Winslow. (GOVERNOR'S BILL) 
Cosponsored by Senator BARTLETT of Cumberland and 
Representatives: ADAMS of Portland, BLISS of South Portland, BRAUTIGAM of Falmouth, 
CEBRA of Naples, EBERLE of South Portland, Senators: BRENNAN of Cumberland, 
SNOWE-MELLO of Androscoggin. 
Printed 011 reqded papt:r 
Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec. A-I. 36 MRSA §3203, sub-§l, as amended by PL 2001, c. 
688, §5, is further amended to read: 
1. 
Generally. 
Except as provided in section 3204-A, 
an 
excise tax is levied and imposed on all suppliers of distillates 
sold, on all retailers of low-energy fuel sold and on all users 
of special fuel used in this State for each gallon of distillate 
at the rate of 23¢ per gallon and for each gallon of low-energy 
fuel based on the British Thermal Unit, 
referred to in this 
subsection as "BTU," energy content for each fuel as compared to 
gasoline. 
Notwithstanding 
this 
subsection. 
the 
rate 
for 
distillates containing 2% or more of biodiesel fuel by volume is 
20t per gallon. 
In the 
case of distillates, 
the tax rate 
provided 
by 
this 
section 
is 
subject 
to 
annual 
inflation 
adjustment pursuant to section 3321. 
Applicable BTU values are 
as follows. 
Fuel type 
Gasoline 
Methanol 
(M85) 
Ethanol 
(E85) 
Propane 
Compressed 
Natural Gas 
BTU content 
per gallon 
115,000 
65,530 
81, 850 
84,500 
100,000 
(BTU per 100 
standard 
cubic 
feet) 
Formula 
(BTU value fuel/ 
BTU value 
gasoline) x tax rate 
gasoline 
57% x 22¢ 
71% x 22¢ 
73°1> x 22¢ 
87°b x 22¢ 
Sec. 
A-2. 
Appropriations 
and 
allocations. 
appropriations and allocations are made. 
Page l-LR3l52(l) 
Tax rate 
22¢ per 
gallon as 
authorized 
in section 
2903 
l2.5¢ per 
gallon 
l5.6¢ per 
gallon 
l6¢ per 
gallon 
19.1¢ per 
standard 
cubic feet 
The 
following 
TRANSPORTATION, DEPARTMENT OF 
Maine Highway Fund -
Department of Transportation 
Initiative: 
Reimburses the Highway Fund for revenues lost due to 
the reduction in the excise tax levied and imposed on distillates 
containing 2% or more of biodiesel fuel by volume. 
GENERAL FUND 
All Other 
GENERAL FUND TOTAL 
PARTB 
2005-06 
$0 
$0 
2006-07 
$20,000 
$20,000 
Sec. B-1. 35-A MRSA §3212, sub-§4-A, as enacted by PL 2003, c. 
665, §2, is repealed. 
Sec. B-2. 35-A MRSA §3212, sub-§4-B is enacted to read: 
4-B. 
Energy 
conservation 
and 
energy 
efficiency. 
The 
commission may incorporate cost effective energy conservation and 
energy efficiency into the supply of standard offer service. 
PARTC 
Sec. C-l. 35-A MRSA §§3210-C and 3210-D are enacted to read: 
§3210-C. 
Long-term contracts 
1. 
Definitions. 
As 
used 
in 
context 
otherwise 
indicates, 
the 
following meanings. 
this 
section, 
unless 
the 
following 
terms 
have 
the 
A. 
"New diverse generation resource" means a resource that: 
(1) 
Relies on fuels that represent less than 10% of 
the total generation resource portfolio in this State 
as of March 1, 2006; 
{2} 
Has generation capacity: 
(a) 
With an in-service date after March 1, 2006; 
(b) 
That was added to an existing facility after 
March It 2006; 
B. 
i...!;) 
That was not operated for at least 2 years 
and resumed operation after March 1, 2006: or 
(d) 
That was refurbished after March 1, 2006 and 
is operating beyond its previous useful life or is 
employing 
an 
alternate 
technology 
that 
~_ignifi~antly iRcreases 
the 
efficiency 
of 
the 
generation process: 
(3) 
Is cost-competitive: and 
(4) 
Emits no greenhouse gases. 
"New renewable generation resource" means a renewable 
resource: 
(1) 
As 
defined 
in 
section 
3210, 
subsection 
2, 
paragraph C except generators fueled by municipal solid 
waste 
in conjunction with 
recycling. 
Hydroelectric 
~nerators must meet all state and federal fish passage 
requirements; 
(2) 
That has generation capacity: 
(a) 
With an in-service date after March 1, 2006; 
(b) 
That was added to an existing facility after 
March L 
2006; 
(c) 
That was not operated for at least 2 years 
and resumed operation after March 1, 2006; or 
(d) 
That was refurbished after March 1, 2006 and 
is operating beyond its previous useful life or is 
gmglQying 
an 
alternate 
technolo~y 
that 
significantly 
increases 
the 
efficiency 
of 
the 
~eneration process; 
(3) 
That is cost-competitive; and 
(4) 
That emits no greenhouse ~ases. 
2. 
Policy. 
It is the policy of this State: 
A. 
To increase the amount of energy generated in this State 
from new renewable generation resources by one percent per 
year beginning in 2007 until this percentage reaches 10% 
b~ 
2017; 
B. 
To 
increase the diversity of sources of electricity 
generation in this State; and 
~ 
To 
use 
the 
devel~ID~nt of 
new 
renewable generation 
resources, 
new 
diverse 
generation 
resources 
and 
cost-effective energy conservation and energy efficiency to 
reduce 
electricity 
price 
volatility 
for 
the 
State's 
electricity consumers and to reduce greenhouse gas emissions 
from the electricity generation sector. 
3. 
COllllljJ~--imthoriU. 
The 
commission 
may 
direct 
investor-owned transmission and distribution utilities to enter 
into long-term contracts for cost-effective energy conservation 
and 
energy 
efficiency 
or 
electricity 
from 
new 
renewable 
generation 
resources 
and 
new 
diverse 
generation 
resources 
consistent with the provisions of this section. 
The commission 
may not direct a transmission and distribution utility to enter 
into any contract that exceeds current and forecasted market 
prices over the term of the contract. 
4. 
Contract term. 
A contract entered into pursuant to this 
section may not be for less than 3 years or more than 20 years. 
5. 
Bid process. 
The commission may direct a transmission 
and distribution utility to enter only into a contract pursuant 
to this section that is selected through 
a 
competitive bid 
process. 
The commission shall conduct a competitive bid process 
no less often than every 3 years. 
6. 
Disposition of power. 
A transmission and distribution 
~tility shall sell electricity purchas~ursuant to this section 
into the wholesale market as directed by the commission. 
7. 
Cost 
recovery. 
The 
commission 
shall 
transmission and distribution utility to recover in 
prudent costs incurred as a result of entering into 
pursuant to this section. 
allow 
a 
rates all 
a contract 
8. 
Rules. 
The commission may adopt rules to implement this 
.§ection. 
Rt:.les 
adopted 
under 
this 
subsection 
are 
routine 
technical rules as defined in Title 5, chapter 375, subchapter 
2-A. 
§32l0-D. 
Energy cost stabilization 
.l_. __ 
Defi:Qjt;,..ions. 
As 
used 
in 
~ontext otherwise 
indicates, 
the 
following meanings. 
this 
section, 
unless 
following 
terms 
have 
the 
the 
A. 
"Credi t 
s\J.l?-porJ~_:.· __ lll!;!ans 
payment guarantees, 
financial 
security or other mechanisms that provide assurance that a 
provider of electricity generation service will be paid for 
delivered electric power~r otherwise kept financially whole 
in the event a customer defaults on its obligations. 
B. 
"Eligible customer" means a nonresidential customer that 
takes service from a transmission and distribution utility. 
2. 
Commission authori~. The commission, at the request of 
an eligible customer or the joint request of an aggregation of 2 
or 
more 
eligible customers, 
may 
order 
the 
transmission 
and 
distribution utility that provides service to the customer or 
~~omers to provide credit support to the customer or customers 
to facilitate a generation service contract for electric power 
from a generation resource. 
3. 
Standard. 
The commission may direct a transmission and 
g,ili.t.ribution utility to provioe credit sw;1port pursuant to this 
section if the commission finds that provision of credit support 
as directed by the commission: 
A. 
Is necessary-~.h~LJ~_li.gibl!'! customer or aggr_egation of 
eligible customers to obtain electricity generation service 
at reasonable rates and terms; 
B. 
Is in the public interest; and 
C. 
Reasonably 
minimizes 
the 
costs 
and 
risks 
to 
the 
ratepayers of the transmission and distribution utility. 
4. 
Credit 
su...pp0rt 
~Qsts. 
The 
eligible 
customer 
is 
responsible 
for 
any 
direct 
or 
indirect 
costs 
that 
the 
transmission and distribution utility incurs 
as 
a 
result of 
providing credit support to the customer pursuant to this section. 
5. 
Pro~eedi~s. 
The commis...s..ion shall 
for credit support pursuant to this section 
consider a reguest 
in an adj udicatory 
proceeding. 
6. 
Cost 
recov~xy. 
The 
commission 
shall 
transmission and distribution utility to recover in 
prudent costs incurred as a result of the provision 
support pursuant to this section. 
allow 
a 
rates all 
of credit 
7. 
Rules. 
The commission may adopt rules to implement this 
section. 
Rules adopted pursuant to this subsection are routine 
technical rules as defined in Title 5, chapter 375, subchapter 
2-A. 
8. 
Report. 
The commission shall report by December 1st of 
each year to the joint standing committee of the Legislature 
having 
jurisdiction 
over 
utilities 
and 
energy 
matters 
a 
description of any action taken by the commission pursuant to 
this section during the prior 12 months. 
PARTD 
Sec. D-l. Appliance efficiency standards; rulemaking. 
The Public 
Utilities 
Commission 
shall 
adopt 
rules 
establishing 
m~n~mum 
energy efficiency standards for commercial and consumer products 
sold or offered for sale in this State and not covered by the 
federal Energy Policy Act of 2005, Public Law 109-58, 119 Stat. 
(2005). 
Rules adopted by the commission pursuant to this 
section must be based on its determination that the standards 
promote energy conservation in this State, do not unreasonably 
affect 
the 
cost 
to 
consumers 
of 
energy-consuming 
consumer 
products 
and 
can 
be 
met 
by 
commercially 
available 
product 
models. 
The standards must be substantively the same as those 
adopted by at least 3 other New England states. 
Rules adopted by 
~,the 
commission 
pursuant 
to 
this 
section 
may 
include 
implementation and enforcement provisions that the 
commission 
considers necessary. 
The rules must require the commission to 
file a petition for 
a 
waiver of federal preemption under 
United States Code, Section 6297(d) with respect to any state 
minimum energy efficiency standard developed pursuant to this 
section subject to federal preemption under 
United States 
Code, Section 6297. 
Rules adopted pursuant to this section are 
major substantive rules as defined by the Maine Revised Statutes, 
Title 5, chapter 375, subchapter 2-A. 
SUMMARY 
This bill contains the following provisions. 
1. 
It reduces the excise tax on motor fuels that contain at 
least 2% biodiesel by volume to 20¢ per gallon. 
2. 
It allows the Public Utilities Commission to incorporate 
cost-effective 
energy 
conservation 
and 
energy 
efficiency 
resources into the standard offer service product for electricity 
customers and to direct transmission and distribution utilities 
to 
enter 
into 
long-term 
contracts 
for 
cost-effective 
energy 
conservation and energy efficiency. 
3. 
It sets a policy of 
generated 
in 
this 
State 
for 
cost-competitive 
new 
renewable 
increasing the 
consumers 
in 
generation 
amount of energy 
this 
State 
from 
resources 
by 
one 
percent per year beginning in 2007, increasing to 10% by 2017, 
and 
permits 
the 
commission 
to 
direct 
transmission 
and 
distribution utilities to enter into long-term contracts for 
eligible renewable resources to accomplish this goal. 
The bill 
also permits the commission to direct investor-owned transmission 
and distribution utilities to enter into long-term contracts for 
cost-competitive generation resources that emit 
no 
greenhouse 
gases and that rely on fuels that currently represent less than 
10% of the total generation resource portfolio in this State. 
4. 
It allows the 
distribution utilities to 
groups of customers to 
for electric power from a 
commission to direct transmission and 
provide credit support for customers or 
facilitate generation service contracts 
generation resource. 
5. 
It directs the commission to adopt major substantive 
rules 
establishing 
minimum 
energy 
efficiency 
standards 
for 
commercial and consumer products sold or offered for sale in this 
State and not covered by the federal Energy Policy Act of 2005, 
Public Law 109-58, 119 Stat. 594 (2005).