An Act To Establish a Process for Procurement of Renewable Resources
Maine Legislature, Session 127, LD 1676
Committee Amendment CA_A_S517 (Senate)

COMMITTEE AMENDMENT "A" to S.P. 689, L.D. 1676, Bill, "An Act To 
Establish a Process for Procurement of Renewable Resources" 
Amend the bill by striking out the title and substituting the following: 
'An Act To Establish a Process for the Procurement of Biomass Resources and 
Electric Energy from Combined Heat and Power Facilities' 
Amend the bill by striking out everything after the enacting clause and before the 
summary and inserting the following: 
'Sec. 1. Biomass competitive solicitation. 
1. Definitions. As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings. 
A. "Biomass resource" is a source of electrical generation fueled by wood, wood 
waste or landfill gas that produces energy that may be physically delivered to the 
ISO-NE region, as defined in the Maine Revised Statutes, Title 35-A, section 1902, 
subsection 3, or in the NMISA region. 
B. "Commission" means the Public Utilities Commission. 
C. 
"NMISA region" is the area administered by the independent system 
administrator for northern Maine or any successor of the independent system 
administrator for northern Maine. 
2. Solicitation and contract negotiation. In accordance with subsection 3, the 
commission shall initiate a competitive solicitation as soon as practicable and direct 
investor-owned transmission and distribution utilities to enter into one or more 2-year 
contracts for up to 80 megawatts of biomass resources contingent upon available funds 
for above-market costs of the contract pursuant to subsection 4. The contract may be a 
contract for energy or a contract for differences. If a generator offers to sell capacity or 
renewable energy attributes as part of a contract entered into pursuant to this section, the 
contract may include the purchase of such capacity or attributes, but the commission may 
Page I - 127LR2794(02)-1 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A" to S.P. 689, L.D. 1676 
not condition any solicitation or contract on an offer or sale of capacity or renewable 
energy attributes. 
3. Review and selection of renewable resources and contract adjustments. In 
conducting a solicitation and entering into any contract under subsection 2, the 
commission shall: 
A. Ensure that a biomass resource facility is operating at 50% capacity 6 months 
prior to the initiation of a competitive solicitation in accordance with subsection 2 
and continues to operate at that capacity except for planned and forced outages; and 
B. Seek to ensure, to the maximum extent possible, that a contract entered into under 
this section: 
( 1) Provides benefits to ratepayers; 
(2) Provides in-state benefits, such as capital investments to improve long-term 
viability of the facility, permanent direct jobs, payments to municipalities, 
payments for fuel harvested in the State, payment for in-state resource access, in-
state purchases of goods and services and construction-related jobs and 
purchases; 
(3) Reduces greenhouse gas emissions.; 
( 4) Promotes fuel diversity; and 
(5) Supports or improves grid reliability. 
In selecting among bids, the commission shall determine the total in-state economic 
benefits of the contract in an expected annual dollar per megawatt-hour average and the 
cost to fund the above-market costs of a contract in an expected annual dollar per 
megawatt-hour average. The commission shall consider both of these values for each 
proposal to identify those proposals that maximize the overall benefits to the State, and 
shall establish a process under which a generator of biomass resources verifies on an 
annual basis that the projected in-state economic benefits are generated during the term of 
the contract. If the commission finds the in-state benefits are not being achieved, the 
commission may reduce the contract payment by the percentage difference between 
actual in-state benefits achieved and the projected in-state benefits. 
4. Cost limits. The commission may enter only into contracts under this section that 
are contingent on the availability of funds in the cost recovery fund established under 
subsection 5 to pay the above-market costs of the contract, as determined by the 
commission. Payments of all above-market costs of a contract must be made solely from 
those funds and are not a liability of the transmission and distribution utility, its 
ratepayers or the commission. If insufficient funds are available in the fund to pay above-
market costs under a contract, the commission shall notify the contracting entity and, 
unless the contracting entity and the commission agree otherwise, the contract is 
suspended. 
The commission and the contracting entity may agree to reinstate a 
suspended contract upon the availability of sufficient funds in the cost recovery fund to 
pay above-market costs. 
5. Cost recovery fund. There is established within the commission a nonlapsing 
cost recovery fund, referred to in this section as "the fund." The fund receives funds 
allocated or transferred by the Legislature from the Maine Budget Stabilization Fund in 
COMMITTEE AMENDMENT 
" 
~ '1 
COMMITTEE AMENDMENT" A" to S.P. 689, L.D. 1676 
accordance with subsection 8. 
The commission shall use the fund to pay all above-
market costs of any contract entered into under this section. The commission by rule or 
order shall establish how above-market costs are determined and how payments from the 
fund are made. 
6. Cost recovery. The commission shall ensure that all costs, except those costs 
associated with above-market costs, and direct financial benefits associated with a 
contract entered into under this section are allocated to ratepayers in accordance with 
Title 35-A, section 3210-F. Costs in the contract other than above-market costs must be 
reflected in the amounts charged to ratepayers and may not be considered imprudent. 
7. Rules. The commission may adopt rules to implement this section. Rules adopted 
under this subsection are routine technical rules as defined in Title 5, chapter 375, 
subchapter 2-A. 
8. 
Transfers of funds. 
Notwithstanding any other provision of law, the State 
Controller shall transfer $6,700,000 from the Maine Budget Stabilization Fund 
established under the Maine Revised Statutes, Title 5, section 1532 to the Cost Recovery 
Fund, Other Special Revenue Funds account within the Public Utilities Commission no 
later than September 1, 2016. Notwithstanding any other provision of law, the State 
Controller shall transfer $6, 700,000 from the Maine Budget Stabilization Fund 
established under Title 5, section 1532 to the Cost Recovery Fund, Other Special 
Revenue Funds account within the Public Utilities Commission no later than September 
1, 2017. 
Sec. 2. 
Combined heat and power solicitation. 
The Public Utilities 
Commission may direct investor-owned transmission and distribution utilities to enter 
into 10-year contracts for up to 40 megawatts of electric energy generated by combined 
heat and power facilities, as defined by the commission by rule or order. By July 1, 2017, 
the commission shall conduct a competitive solicitation in a manner consistent with the 
Maine Revised Statutes, Title 35-A, section 3210-C to procure this energy. In order for a 
facility to qualify for a contract, it must have a designed operating efficiency ratio of 
useful electric and thermal output to the fuel input of at least 60% and be a new facility or 
a facility that has been refurbished through significant capital investment, as defined by 
the commission. The commission may not direct an investor-owned transmission and 
distribution utility to enter into a contract if the commission finds that the likely costs 
resulting from any contract entered into as a result of the solicitation process will exceed 
the likely benefits to ratepayers. 
1. Rules. The commission may adopt rules to implement this section. Rules adopted 
under this subsection are routine technical rules as defined in Title 5, chapter 375, 
subchapter 2-A. 
Sec. 3. Appropriations and allocations. 
The following appropriations and 
allocations are made. 
PUBLIC UTILITIES COMMISSION 
Cost Recovery Fund N228 
Initiative: Provides an allocation to pay all above-market costs of contracts for energy or 
contracts for differences for the procurement of up to 80 megawatts of biomass resources. 
COMMITTEE AMENDMENT 
'·,( ~~· 
COMMITIEE AMENDMENT" A 
"to S.P. 689, L.D. 1676 
OTHER SPECIAL REVENUE FUNDS 
All Other 
OTHER SPECIAL REVENUE FUNDS TOTAL 
Public Utilities - Administrative Division 0184 
Initiative: Provides an allocation for consulting costs. 
OTHER SPECIAL REVENUE FUNDS 
All Other 
OTHER SPECIAL REVENUE FUNDS TOTAL 
PUBLIC UTILITIES COMMISSION 
DEPARTMENT TOTALS 
OTHER SPECIAL REVENUE FUNDS 
DEPARTMENT TOTAL-ALL FUNDS 
SUMMARY 
2015-16 
2016-17 
$0 
$6,700,000 
$0 
$6,700,000 
2015-16 
2016-17 
$0 
$100,974 
$0 
$100,974 
2015-16 
2016-17 
$0 
$6,800,974 
$0 
$6,800,974 
This amendment is the majority report of the committee and it strikes and replaces 
the bill. The amendment does the following. 
1. It directs the Public Utilities Commission to initiate a competitive solicitation as 
soon as practicable to procure up to 80 megawatts of biomass resources, contingent upon 
available funds for above-market costs. 
2. It allows the contract to be a contract for energy or a contract for differences. 
3. It provides the contract may include the purchase of capacity or attributes, but the 
commission may not condition any solicitation or contract on an offer or sale of capacity 
or renewable energy attributes. 
4. It requires that in order for a facility to receive a contract it must be operating at 
50% capacity 6 months prior to the initiation of a competitive solicitation and continue to 
operate at that capacity except for planned and forced outages. 
5. It requires the commission to seek to ensure, to the maximum extent possible, that 
a contract entered into provides benefits to ratepayers; provides in-state benefits, such as 
capital investments to improve long-term viability of the facility, permanent direct jobs, 
payments to municipalities, payments for fuel harvested in the State, payment for in-state 
resource access, in-state purchases of goods and services and construction-related jobs 
COMMITTEE AMENDMENT 
COMMITIEE AMENDMENT "A" to S.P. 689, L.D. 1676 
and purchases; reduces greenhouse gas emissions; promotes fuel diversity; and supports 
or improves grid reliability. 
6. It requires that the commission determine the total in-state economic benefits of 
the contract in an expected annual dollar per megawatt-hour average and the cost to fund 
the above-market costs of a contract in an expected annual dollar per megawatt-hour 
average. 
7. 
It specifies that if the commission finds the in-state benefits are not being 
achieved, the commission may reduce the contract payment by the percentage difference 
between actual in-state benefits achieved and the projected in-state benefits. 
8. It creates a nonlapsing fund within the commission, called the cost recovery fund, 
to pay the above-market costs of the contract, which is funded through transfers from the 
Maine Budget Stabilization Fund established under the Maine Revised Statutes, Title 5, 
section 1532. 
9. 
It limits the commission's authority to enter into a contract based on the 
availability of funds in the cost recovery fund. 
10. It specifies that, if insufficient funds are available in the fund to pay above-
7 
market costs under a contract, the contract is suspended. 
11. It requires the State Controller to transfer $6, 700,000 on or before September 1, 
2016 and on or before September 1, 2017 to the cost recovery fund. 
12. It requires all costs that are not above-market costs and direct financial benefits 
associated with a contract for biomass resources to be allocated to ratepayers in 
accordance with Title 35-A, section 3210-F. 
13. 
It directs the commission to initiate a competitive solicitation in a manner 
consistent with Title 35-A, section 3210-C by July 1, 2017 to procure up to 40 megawatts 
of electric energy generated by a combined heat and power facility or facilities for a 
period of 10 years. 
14. It specifies that the commission may direct an investor-owned transmission and 
distribution utility to enter into a contract only if the commission finds that the likely 
benefit to ratepayers resulting from any contract entered into as a result of the solicitation 
process will exceed the likely costs. 
15. It requires that in order for a facility to qualify for a contract it must have a 
designed operating efficiency ratio of useful electric and thermal output to the fuel input 
of at least 60% and be a new facility or a facility that has been refurbished through 
significant capital investment. 
16. It adds an appropriations and allocations section. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
A.pproved: 04/12/16 
~.czc:.. 
LD 1676 
LR2794(02) 
An Act To Establish a Process for Procurement of Renewable Resources 
Fiscal Note for Bill as Amended by Committee Amendment'~" f. 
;) 
Committee: Energy, Utilities and Technology 
LS'-5(/) 
Fiscal Note Required: Yes 
Fiscal Note 
Net Cost (Savings) 
General Fund - Maine Budget Stabilization Fund 
Appropriations/ Allocations 
Other Special Revenue Funds 
Revenue 
Other Special Revenue Funds 
Transfers 
General Fund - Maine Budget Stabilization Fund 
Other Special Revenue Funds 
Fiscal Detail and Notes 
FY 2015-16 
$0 
$0 
$0 
$0 
$0 
FY 2016-17 
$6,700,000 
$6,800,974 
$100,974 
($6,700,000) 
$6,700,000 
Projections 
FY 2017-18 
$6,700,000 
$6,800,974 
$100,974 
($6,700,000) 
$6,700,000 
Projections 
FY 2018-19 
$0 
$100,974....,,. 
$100,974 
$0 
$0 
The bill requires the Public Utilities Commission (PUC) to enter into one or more two-year contracts for up to 80 
megawatts of biomass resources, contingent upon available funds for above market costs of the contract. This bill 
creates the Cost Recovery Fund within the PUC and transfers $6, 700,000 in both fiscal year 2016-17 and fiscal year 
2017-18 from the Maine Budget Stabilization Fund to the Cost Recovery Fund to pay all above-market costs of the 
contracts. The bill includes an Other Special Revenue Funds allocation in fiscal year 2016-17 of $6, 700,000 to allow 
the PUC to pay all above-market costs of the contracts and an Other Special Revenue Funds allocation of $100,974 
for consulting costs. The Maine Budget Stabilization Fund has sufficient resources to make these transfers. The PUC 
will receive an annual $100,974 increase in Other Special Revenue Funds revenue from increased assessments to 
fund the consulting costs. 
LR2794(02) - Fiscal Note - Page 1 of 1