An Act To Create Jobs through the Establishment of the Renewable Energy Resources Feed-in Tariff Program
Maine Legislature, Session 125, LD 1447
Committee: Energy, Utilities and Technology
Sponsors: RUSSELL, ALFOND, BERRY, INNES, KENT, BARTLETT
Amends: 35-A MRSA §3218

Legislative Document 
No. 1447 
H.P. 1061 
House of Representatives, April 11, 2011 
An Act To Create Jobs through the Establishment of the Renewable 
Energy Resources Feed-in Tariff Program 
Reference to the Committee on Energy, Utilities and Technology suggested and ordered 
printed. 
HEATHER J.R. PRIEST 
Clerk 
Presented by Representative RUSSELL of Portland. 
Cosponsored by Senator ALFOND of Cumberland and 
Representatives: BERRY of Bowdoinham, INNES of Yarmouth, KENT of Woolwich, 
MacDONALD of Boothbay, Senator: BARTLETT of Cumberland. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  35-A MRSA §3218 is enacted to read: 
§3218.  Renewable Energy Resources Feed-in Tariff Program 
1.  Program established.  The Renewable Energy Resources Feed-in Tariff Program 
is established. 
2.  Definitions.  As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings. 
A.  "Load pocket" means an area where there is insufficient transmission capability to 
reliably supply the required electric load without relying on generation capacity that 
is physically located in that area. 
B.  "Program" means the Renewable Energy Resources Feed-in Tariff Program. 
C.  "Project owner" means a person or entity that owns a renewable energy project. 
D.  "Renewable energy project" means a system for the generation of electricity that 
is no greater than 20 megawatts in size and is fueled by one of the following 
renewable energy resources in this State: 
(1) Solar power; 
(2) Wind power; 
(3) Hydroelectric power; or 
(4) Tidal power. 
3.  Administration.  The commission shall administer the program as follows. 
A.  The commission shall limit participation in the program in accordance with this 
paragraph. 
(1) A renewable energy project must have an in-service date after January 1, 
2012 and may not be part of a larger system or project. 
(2) A renewable energy project may not simultaneously subscribe to both the 
program and net energy billing as defined in commission rules.  A renewable 
energy project may participate in net energy billing at the expiration of a program 
contract. 
B.  The commission shall prescribe an application form or procedure to apply to the 
program under this section. The commission shall, within 45 days of receipt of a 
completed application, determine in writing whether a renewable energy project 
qualifies to participate in the program. 
C.  The commission shall exempt a consumer-owned transmission and distribution 
utility from the program's requirements, if the utility so requests. 
4.  Connection to electric distribution system.  A transmission and distribution 
utility shall connect a renewable energy project to the utility's transmission or distribution 
systems within 120 days of such a request by a project owner. 
A.  The commission shall establish standards for the interconnection of renewable 
energy projects with the transmission and distribution systems of transmission and 
distribution utilities.  The standards must be consistent with generally accepted 
industry practices and guidelines and ensure the reliability of electric service and the 
safety of customers, utility employees and the general public. 
B.  The costs associated with the interconnection of a renewable energy project must 
be included in the surcharge under subsection 7, paragraph A, as long as electric 
transmission lines already exist at the location of or within 100 feet of the renewable 
energy project.  If the renewable energy project is more than 100 feet from existing 
electric transmission lines, the project owner must bear the cost of interconnection. 
C.  A transmission and distribution utility that fails to connect a renewable energy 
project to the utility's transmission or distribution systems is subject to fines of not 
more than $100 per day that the transmission and distribution utility is in violation of 
this subsection. 
5.  Standard contract.  After the commission has developed and adopted a standard 
contract pursuant to paragraph A, a transmission and distribution utility shall enter into a 
power purchase agreement for a term of not less than 20 years to purchase all electricity 
generated by an approved renewable energy project. A transmission and distribution 
utility must purchase the electricity generated by a renewable energy project at a fixed 
rate, as determined by the commission. 
A.  Within 6 months of the effective date of this section, the commission shall 
develop and adopt a standard contract to be used in all power purchase agreements 
under this section. The contract must include the prices paid for each kilowatt-hour 
generated and the duration of the contract.  
B.  The contract must set the prices to be paid for each kilowatt-hour generated by 
each class, as described in subsection 6, paragraph A, of approved renewable energy 
projects. 
C.  Executed contracts must be site-specific and transferable. 
(1)  If a renewable energy project under a standard contract is transferred to a 
new project owner, the new project owner must notify the transmission and 
distribution utility within 30 days of the transfer in order to continue receiving 
payments under existing terms of the previous project owner's standard contract 
for the electricity generated from the renewable energy project. 
6.  Rates and terms.  The commission shall set just and reasonable rates sufficient to 
provide revenues to operate and to attract necessary capital and investment for renewable 
energy projects to be paid by transmission and distribution utilities to project owners 
under the standard contract. 
A.  The rates must establish specific classes of renewable energy projects, both by 
type of renewable resource used and by amount of annual electrical output, and for 
specific time periods of the contract's duration. 
B.  The commission shall adopt fixed rates for each class of renewable energy project 
to equal the average generation costs of each renewable energy project plus a rate of 
return of no more than 3.5%.  With regard to solar-powered renewable energy 
projects, that rate of return applies only to projects sited within load pockets.  For all 
other solar-powered renewable energy projects, the rate equals the average generation 
costs, without a rate of return.  The commission shall include, but is not limited to, 
the following factors in calculating the average generation cost of a renewable energy 
project: 
(1)  The requirements of chapter 3; 
(2)  Installed capital costs; 
(3)  Fixed and variable operation and management expenses; 
(4)  Fuel costs; 
(5)  Cost of financing; 
(6)  Insurance; 
(7)  Transmission and interconnection costs; and 
(8)  Estimated project life and projected generation degradation. 
In developing the rate, the commission shall ensure the rate is reasonable and fair to 
the project owner and to ratepayers.  For purposes of calculating the average 
generation costs for each class of renewable energy project, the commission shall 
assume that the project is sited and designed in an optimal manner, such that only the 
most cost-effective projects within a class are likely to realize a 3.5% rate of return. 
C.  The transmission and distribution utility shall retain any credits or payments for 
the nongeneration aspects of a renewable energy project under the program, including 
but not limited to: 
(1)  Renewable energy credits as defined in section 3210, subsection 2, paragraph 
B-2; 
(2)  Payments under the forward capacity market, as defined in section 10102, 
subsection 6, administered by the regional transmission organization, as defined 
in section 10102, subsection 8, or other capacity payments; and 
(3)  Voluntary carbon market payments or credits under chapter 97. 
7.  Cost recovery.  The commission shall, after notice and hearing, annually approve 
a mandatory renewable energy surcharge payable by customers of transmission and 
distribution utilities. 
A.  The commission shall set the surcharge at a level sufficient to pay the costs of 
electricity purchased under subsection 6 and any interconnection costs under 
subsection 4, taking into account factors including but not limited to avoided costs 
attributable to the program; the value of any of the payments and credits described in 
subsection 6, paragraph C; and any systemwide financial benefit that the program 
provides for ratepayers.  
B.  An electricity customer receiving service at transmission or subtransmission 
voltage levels, as defined in section 10110, subsection 6, is not eligible to participate 
in the program and is not required to pay in rates any amount associated with the 
surcharge imposed under paragraph A. 
8.  Review.  The commission shall review the rates established in subsection 6 
annually and shall adjust those rates for new contracts as necessary to assist in the 
profitable development of renewable energy projects, prevent excessive profits for project 
owners and prevent unnecessary costs to ratepayers.  The commission shall reduce the 
rates in subsection 6 to reflect any governmental subsidies, tax credits or other incentives 
that a project owner may receive. 
9.  Report.  In each of the first 2 years of the program and every 4 years thereafter, 
the commission shall file a report with the Governor and Legislature that includes the 
following: 
A.  The kilowatt-hours of electricity purchased from eligible electricity generators; 
B.  The number of new eligible electricity generators in this State and the 
environmental effects of the addition of those generators; 
C.  Recommendations for legislation and changes to the rates and terms of the 
standard contract; and 
D.  Actions taken by the commission to implement this section. 
Project owners shall, upon request, provide the commission with any information that 
may be relevant to the commission's performing its duties under this section. 
10.  Rules.  The commission shall adopt rules to implement this section.  Rules 
adopted under this section are routine technical rules as defined in Title 5, chapter 375, 
subchapter 2-A. 
SUMMARY 
This bill requires the Public Utilities Commission to establish a renewable energy 
resources feed-in tariff program to encourage the rapid and sustainable development of 
renewable energy resources and technology for the clean generation of electricity.  It 
requires that transmission and distribution utilities purchase electricity produced by 
renewable energy systems at commission-prescribed rates that give high-performing 
generators a rate of return of no more than 3.5%.  It requires that utilities enter into 
standard contracts with qualified project owners.  It includes provisions for commission 
and legislative oversight of the program.