An Act To Improve Efficiency through Electric Rate Design and Advanced Technology
Maine Legislature, Session 128, LD 1896
Committee: Energy, Utilities and Technology
Sponsors: BRAKEY, FARRIN, CHAPMAN, GROHMAN, HANLEY, HARLOW, MALABY, O'CONNOR, RYKERSON, SAMPSON
Amends: 35-A MRSA §3152, 35-A MRSA §3153-A, 35-A MRSA §3154, 35-A MRSA §3209, 35-A MRSA §10110

Legislative Document
No. 1896
S.P. 726
In Senate, April 2, 2018
An Act To Improve Efficiency through Electric Rate Design and 
Advanced Technology
Reference to the Committee on Energy, Utilities and Technology suggested and ordered 
printed.
HEATHER J.R. PRIEST
Secretary of the Senate
Presented by Senator BRAKEY of Androscoggin.  (GOVERNOR'S BILL)
Cosponsored by Representative FARRIN of Norridgewock and
Representatives: CHAPMAN of Brooksville, GROHMAN of Biddeford, HANLEY of Pittston, 
HARLOW of Portland, MALABY of Hancock, O'CONNOR of Berwick, RYKERSON of 
Kittery, SAMPSON of Alfred.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  35-A MRSA §3152, sub-§1, as amended by PL 2013, c. 369, Pt. F, §§2 to 
4, is further amended to read:
1.  Increased efficiency.  The Legislature declares and finds that improvements in 
transmission and distribution utility rate design and related regulatory programs have 
great potential for reducing the cost of electric utility services to consumers, for 
encouraging energy conservation and efficient use of existing facilities and for 
minimizing the need for expensive new electric transmission capacity.  It is the purpose 
of this chapter to:
A.  Require the commission to relate transmission and distribution rates more closely 
to the costs of providing transmission and distribution service., including promoting 
the recovery of fixed transmission and distribution utility costs through fixed 
customer charges to the maximum extent practicable and economically efficient; 
C.  Require the commission to consider the ability of low-income residential 
customers to pay in full for electric services as transmission and distribution rates are 
redesigned consistent with these policies; and
D.  Require the commission to set rates, including transmission and distribution rates 
that vary by time of day and season and by other relevant cost drivers, to the extent 
practicable to achieve economic efficiency.; and
E.  
Require the commission to examine and adopt appropriate changes to 
transmission and distribution utility rate class designations that would improve equity 
and economic efficiency.
Sec. 2.  35-A MRSA §3153-A, sub-§1, as corrected by RR 2009, c. 2, §103, is 
amended to read:
1.  Proposals and programs developed.  The commission, as it determines 
appropriate, shall order investor-owned transmission and distribution utilities to develop 
and submit to the commission for approval by January 1, 2019 specific rate design 
proposals and related programs for implementing energy conservation and energy 
efficiency techniques and innovations, either in conjunction with or independent of any 
rate-making proceeding pending before the commission.  
The proposals, as the 
commission determines, must be designed to encourage energy conservation, minimize 
the need for new transmission and distribution capacity, minimize costs of transmission 
and distribution service to consumers improve equity among customers, minimize 
transmission and distribution rates over the long term or short term and take into account 
the needs of low-income customers.  In approving a proposal under this section, the 
commission shall give equivalent consideration to the goals of minimizing costs and 
minimizing transmission and distribution rates to consumers.  Proposals must include, but 
are not limited to, proposals that provide for the development and implementation of:
A.  Load management techniques, including proposals for implementing cost-
effective load control and other smart grid technologies and programs, such as 
dispatchable load reduction technologies and distributed generation, designed to 
optimize distribution and transmission load profiles;
B.  Rates that reflect marginal costs of services at different voltages, times of day or, 
seasons of the year or other relevant cost drivers, including short-run and long-run 
marginal costs associated with the construction of new transmission and distribution 
facilities;
D.  Rates or other regulatory policies that encourage maintain transmission and 
distribution utility system reliability;
E.  Transmission and distribution utility financing or subsidization of capital 
improvements undertaken by ratepayers to conserve optimize electricity used usage 
by the ratepayers in the future.   This paragraph applies to future programs for utility 
financing of energy conservation or load management as long as the goal of such 
programs is to economically defer or eliminate the need for transmission and 
distribution plant upgrades. In addition to programs undertaken pursuant to this 
paragraph, programs may be undertaken pursuant to section 10110 to achieve goals 
other than that identified in this paragraph;
F.  As defined by the commission by rule, cost-effective conversions of electric space 
heat systems to systems relying on other fuels and other techniques for enabling 
homeowners and tenants to replace on-peak, winter period electric usage with less 
expensive sources of heat;
G.  Rates or bill payment assistance programs for residential customers who have 
been certified eligible for state or federal fuel assistance that take into account the 
difficulty these customers have paying in full for electric service or that target 
assistance to these customers in the most efficient manner, taking into account the 
necessity of maintaining electric service; and
H.  Rates or programs that allow encourage incremental use or maintenance of 
existing use when those rates uses serve to minimize rate levels for all transmission 
and distribution customers.  In approving any proposal for rates or programs that 
allow encourage incremental use or maintenance of existing use, the commission 
shall seek to ensure that rates for  all customer classes will be lower than they would 
have been had the commission not approved the proposal.
Sec. 3.  35-A MRSA §3154, sub-§1, as amended by PL 1999, c. 398, Pt. A, §59 
and affected by §§104 and 105, is further amended to read:
1.  Rate design and conservation improvements.  The commission shall mandate, 
after notice and hearing on the proposed schedule, a scheduled phasing-in of the 
improvements in transmission and distribution utility rate design and related regulatory 
programs submitted and approved under section 3153-A and is authorized to order 
utilities to implement transmission and distribution utility rate design improvements 
approved by the commission on a temporary, pilot and experimental basis, affecting 
either a portion or all of any class of consumers of any utility as the commission may 
determine is appropriate to carry out the purposes of this subchapter, and order other 
energy conservation techniques, programs and innovations relating to transmission and 
distribution utility service that, in the commission's judgment, are practicable, just and 
reasonably related to fulfilling the purposes of this chapter.  In ordering any rate design 
improvements or any other programs for implementing energy conservation efficiency 
techniques and innovations referred to in section 3153-A, the commission shall consider 
rate design stability and shall ensure the revenue requirements of the utility.
Sec. 4.  35-A MRSA §3209, sub-§5 is enacted to read:
5.  Supply rates.  To the extent cost effective and practicable, the commission shall 
implement policies and practices to encourage competitive electricity suppliers to offer 
residential and commercial customers electricity supply pricing reflective of real-time 
market price variations.
Sec. 5.  35-A MRSA §10110, sub-§7, as enacted by PL 2009, c. 372, Pt. B, §3, is 
amended to read:
7.  Conservation program fund.  The trust shall establish a conservation program 
fund to be used solely for conservation programs, except as described in paragraph C and 
subsection 10.
A.  The commission shall deposit all assessments collected pursuant to this section, 
other than funds deposited in the administration fund, into the program fund.
B.  Any interest earned on funds in the program fund must be credited to the program 
fund.
C.  Funds Except for funds targeted for low-income residential transmission and 
distribution customers, funds not spent in any fiscal year remain in the program fund 
to be used for conservation programs.  Funds targeted for low-income residential 
transmission and distribution customers that are not spent within a fiscal year may, at 
the commission's discretion, be returned to investor-owned transmission and 
distribution utilities to offset any bill increases to low-income residential transmission 
and distribution customers as a result of rate design changes that recover fixed 
residential transmission and distribution utility costs through fixed customer charges.
D.  The commission or the trust may apply for and receive grants from state, federal 
and private sources for deposit in the program fund and also may deposit in the 
program fund any grants or other funds received by or from any entity with which the 
commission or trust has an agreement or contract pursuant to this section if the 
commission receives prior written consent from the trust that receipt of those funds 
would be consistent with the purposes of this section.  If the commission or trust 
receives any funds pursuant to this paragraph, it shall establish a separate account 
within the program fund to receive the funds and shall keep those funds and any 
interest earned on those funds segregated from other funds in the program fund.
Sec. 6.  35-A MRSA §10110, sub-§10, as amended by PL 2013, c. 369, Pt. A, 
§24, is further amended to read:
10.  Funds held in trust.  All funds collected from electricity consumers pursuant to 
this section are collected under the authority and for the purposes of this section and are 
deemed to be held in trust for the purposes of benefiting electricity consumers.  In the 
event funds are not expended or contracted for expenditure within 2 years of being 
collected from consumers, the commission shall ensure that the value of those funds is 
returned to consumers.  Funds targeted for low-income residential transmission and 
distribution customers pursuant to subsection 2, paragraph B, subparagraph (1) that are 
not expended or contracted for expenditure within 2 years must be returned to low-
income residential transmission and distribution customers.
SUMMARY
This bill requires the Public Utilities Commission to promote recovery of fixed 
transmission and distribution costs through fixed customer costs, to the extent practicable 
and economically efficient, and to examine and make appropriate changes to transmission 
and distribution utility rate class designations to the extent such changes would improve 
equity and economic efficiency.  The bill further requires the commission to implement 
transmission and distribution rates that vary by time of day and season or other relevant 
cost drivers, to the extent practicable, to achieve economic efficiency.  The bill requires 
investor-owned transmission and distribution utilities to submit specific rate design 
proposals to the commission by January 1, 2019 and provides that such plans must 
include proposals for implementing cost-effective programs and load-control 
technologies to optimize distribution circuit and transmission system load profiles and 
rates or programs that encourage incremental usage if such uses would lower rates for all 
customer classes.  The bill removes the requirement that transmission and distribution 
utilities' proposals include cost-effective conversions of electric space heat systems.
The bill also removes the requirement that rate design changes implemented pursuant 
to the Maine Revised Statutes, Title 35-A, section 3153-A be implemented on a 
temporary, pilot or experimental basis and requires the commission to implement policies 
and practices to encourage competitive electricity providers to offer residential and 
commercial customers supply prices reflective of real-time market price variations.
The bill provides that any Efficiency Maine Trust funds targeted to low-income 
residential transmission and distribution customers that remain unspent at the end of a 
fiscal year may, at the commission's discretion, be returned to investor-owned 
transmission and distribution utilities to offset bill increases to low-income transmission 
and distribution customers resulting from the bill's rate design changes.  The bill also 
provides that Efficiency Maine Trust funds targeted to low-income residential 
transmission and distribution customers that are uncommitted 2 years after having been 
collected must be returned to those customers.