Court Opinion

ID: 4173564
Source: CourtListenerOpinion
Date Created: 2017-06-01 15:13:45.43367+00
Date Added: 2024-06-11T07:47:08.666872
License: Public Domain

MAINE	SUPREME	JUDICIAL	COURT	                                       Reporter	of	Decisions	
Decision:	 2017 ME 109 
Docket:	   PUC-16-353	
Argued:	   April	11,	2017	 	
Decided:	  June	1,	2017	
	
Panel:	    SAUFLEY,	C.J.,	and,	MEAD,	GORMAN,	JABAR,	HJELM,	and	HUMPHREY,	JJ.	
	
	
                           CONSERVATION	LAW	FOUNDATION	
                                            	
                                           v.	
                                            	
                           PUBLIC	UTILITIES	COMMISSION	et	al.	
	
	
MEAD,	J.	

	       [¶1]	 	 The	 Conservation	 Law	 Foundation	 appeals	 from	 an	 order	 of	 the	

Maine	Public	Utilities	Commission	approving	a	stipulation	regarding	Efficiency	

Maine	Trust’s	Third	Triennial	Plan	for	energy	efficiency.		CLF	contends	that	the	

Commission’s	 order	 and	 the	 terms	 of	 the	 stipulation	 disregard	 statutory	

mandates	 set	 forth	 in	 the	 Efficiency	 Maine	 Trust	 Act.	 	 See	 35-A	 M.R.S.	

§§	10101-10123	(2015).1		With	respect	to	electric	energy	efficiency	programs,	

CLF	argues	that	the	Commission	did	not	“make	use	of	best	practices	across	the	

region”	 when	 calculating	 avoided	 energy	 costs	 and	 selecting	 a	 discount	 rate,	

    1		Provisions	of	the	Efficiency	Maine	Trust	Act	have	amendments	that	became	effective	after	the	

entering	of	the	order	underlying	this	appeal,	though	the	amendments	are	not	relevant	in	the	present	
case.		See	P.L.	2015,	ch.	498,	§§	1,	2	(effective	July	29,	2016)	(codified	at	35-A	M.R.S.	§	10109(3-A),	(4)	
(2016));	P.L.	2015,	ch.	425,	§§	1-3	(effective	July	29,	2016)	(codified	at	35-A	M.R.S.	§	10111(2),	(2-A)	
(2016)).	
2	

and	 that	 it	 failed	 to	 “consider	 gross	 efficiency	 savings	 for	 the	 purpose	 of	

determining	savings	that	are	cost-effective,	reliable	and	achievable”	as	required	

by	35-A	M.R.S.	§	10110(4-A).		With	respect	to	natural	gas	efficiency	programs,	

CLF	asserts	that	the	Commission	failed	to	identify	and	fund	all	cost-effective,	

reliable,	and	achievable	natural	gas	energy	efficiency	measures	as	required	by	

35-A	 M.R.S.	 §§	 10104(4)	 and	 10111(2).	 	 We	 discern	 no	 error	 in	 the	

Commission’s	 interpretation	 and	 application	 of	 these	 statutes	 and	 affirm	 its	

order.	

                                  I.		BACKGROUND	

A.	   Statutory	Background	

	     [¶2]		In	2009,	the	Legislature	established	the	Efficiency	Maine	Trust	“for	

the	purposes	of	developing,	planning,	coordinating	and	implementing	energy	

efficiency	and	alternative	energy	resources	programs	in	the	State,”	to,	inter	alia,	

promote	 investment	 in	 energy	 efficiency	 measures	 and	 reduce	 the	 cost	 of	

energy	 for	 Maine	 residents.	 	 35-A	 M.R.S.	 §	 10103(1),	 (1)(B)(1),	 (1)(D);	 see	

generally	35-A	M.R.S.	§§	10101-10123.		To	help	achieve	these	goals,	the	Trust	

develops	 a	 detailed	 energy	 efficiency	 plan	 every	 three	 years	 to	 identify	 the	

maximum	 achievable	 cost-effective	 energy	 efficiency	 savings	 (commonly	

referred	 to	 by	 the	 Commission	 as	 “MACE”)	 and	 programs	 to	 achieve	 those	
                                                                                                              3	

savings.		See	35-A	M.R.S.	§	10104(4).	

	       [¶3]		The	Commission	is	tasked	with	reviewing	the	plan	and	opening	an	

adjudicatory	proceeding,	after	which	it	must	issue	an	order	approving	the	plan	

or	rejecting	elements	of	the	plan.2		35-A	M.R.S.	§	10104(4)(D).		The	Commission	

“shall	approve	all	elements	of	the	triennial	plan	it	determines	to	be	[MACE]”	

and	adjust	gas	utility	and	transmission	and	distribution	(T&D)	rates	to	provide	

revenue	for	procurement	of	the	energy	efficiency	resources	identified	by	the	

triennial	plan.		Id.	

	       [¶4]		The	Efficiency	Maine	Trust	Act	sets	forth	specific	standards	for	the	

Commission’s	review	and	approval	of	electric	energy	and	natural	gas	efficiency	

programs.		With	respect	to	electric	energy,	

        [w]hen	 determining	 the	 amount	 of	 cost-effective	 electric	 energy	
        efficiency	 resources	 to	 be	 procured	 under	 this	 subsection,	 the	
        [C]ommission	shall:	
        	

    2		The	Legislature	bestowed	this	authority	to	the	Commission	through	numerous	amendments	to	

the	 Efficiency	 Maine	 Trust	 Act	 through	 enactment	 of	 the	 Omnibus	 Energy	 Act.	 	 See	 generally	
P.L.	 2013,	 ch.	 369	 (varying	 effective	 dates).	 	 Prior	 to	 these	 amendments,	 the	 Legislature	 set	 the	
minimum	budget	for	electric	and	natural	gas	efficiency	programs	and	directed	the	Commission	to	
determine	 whether	 additional	 funding	 was	 appropriate;	 if	 the	 Commission	 recommended	 an	
increase,	it	was	subject	to	the	Legislature’s	approval.		See	35-A	M.R.S.	§	10110(4)	(2014),	repealed	by	
P.L.	 2013,	 ch.	 369,	 §	 A-19	 (effective	 July	 1,	 2015);	 35-A	 M.R.S.	 §§	 10110(5)	 (2012),	 repealed	 by	
P.L.	2013,	ch.	369,	§	A-21	(emergency,	effective	June	26,	2013);	see	also	35-A	M.R.S.	10111(2)	(2012),	
amended	by	P.L.	2013,	ch.	369,	§	A-25	(emergency,	effective	June	26,	2013)	(codified	at	35-A	M.R.S.	
§	10111(2)	(2013)).	
   	
4	

             A.	 Consider	 electric	 energy	 efficiency	 resources	 that	 are	
             reasonably	foreseeable	to	be	acquired	by	the	trust	using	all	
             other	sources	of	revenue	.	.	.	;	
             	
             B.	Ensure	that	calculations	of	avoided	energy	costs	and	the	
             budget	identified	by	the	trust	in	its	triennial	plan	as	needed	
             to	 capture	 all	 cost-effective	 electric	 energy	 efficiency	
             resources	 are	 reasonable,	 based	 on	 sound	 evidence	 and	
             make	use	of	best	practices	across	the	region;	and	
             	
             C.	Maximize	total	electricity	savings	for	all	ratepayers.	
        	
     The	 [C]ommission	 shall	 consider	 gross	 efficiency	 savings	 for	 the	
     purpose	of	determining	savings	that	are	cost-effective,	reliable	and	
     achievable	and	shall	consider	both	net	and	gross	efficiency	savings	
     for	the	purpose	of	determining	the	appropriateness	of	the	amount	
     identified	by	the	trust	in	its	triennial	plan	as	needed	to	capture	all	
     cost-effective	electric	energy	efficiency	resources.	
     	
35-A	M.R.S.	§	10110(4-A).	

	     [¶5]		With	respect	to	natural	gas,	the	Commission	“shall	assess	each	gas	

utility,	in	accordance	with	the	triennial	plan,	an	amount	necessary	to	capture	

all	[MACE].”		35-A	M.R.S.	§	10111(2).	

B.	   The	Third	Triennial	Plan	

	     [¶6]		On	December	17,	2015,	the	Trust	submitted	to	the	Commission	its	

petition	 for	 approval	 of	 the	 Triennial	 Plan	 for	 Fiscal	 Years	 2017-2019.	 	 For	

purposes	of	determining	the	cost-effectiveness	of	proposed	energy	efficiency	

measures,	the	Trust	relied	on	the	Avoided	Energy	Supply	Costs	in	New	England:	
                                                                                                     5	

2015	Report	(“AESC	report”)	to	calculate	avoided	energy	costs3	and	to	select	a	

discount	rate.4	

	      [¶7]	 	 Following	 the	 plan’s	 submission,	 the	 Commission	 granted	 eleven	

petitions	to	intervene.5		Discovery	commenced	in	January	2016,	and	over	the	

next	 several	 weeks	 the	 Commission	 convened	 a	 technical	 conference	 and	

entered	 protective	 orders	 for	 proprietary	 information,	 and	 the	 parties	

responded	to	data	requests	and	submitted	testimony.	

	      [¶8]		On	February	24,	2016,	the	Commission	staff	filed	a	bench	analysis6	

outlining	 its	 review	 of	 the	 Third	 Triennial	 Plan	 and	 its	 analysis	 of	 the	

cost-effectiveness	of	the	efficiency	measures	identified	by	the	Trust.		The	staff	

conducted	its	analysis	using	the	Trust’s	MACE	study	and	models,	but	adjusted	

   3		“Avoided	energy	costs”	refers	to	costs	that	are	not	incurred	as	a	result	of	the	implementation	of	

electric	and	natural	gas	efficiency	programs.	
   	
   4		Discount	rates	account	for	the	time	value	of	money	when	energy	efficiency	benefits	accrue	over	

time.		A	high	discount	rate	reflects	the	policy	that	short-term	costs	and	benefits	are	valued	more	than	
long-term	costs	and	benefits,	whereas	a	low	discount	rate	reflects	the	policy	that	long-term	costs	and	
benefits	are	valued	more	than	short-term	costs	and	benefits.	
   	
   5		The	intervenors	were	the	Conservation	Law	Foundation	(CLF);	the	Office	of	the	Public	Advocate	

(OPA);	 Natural	 Resources	 Council	 of	 Maine	 (NRCM);	 Northern	 Utilities,	 Inc.	 d/b/a	 Unitil;	
Central	 Maine	 Power	 Company;	 Summit	 Natural	 Gas	 of	 Maine,	 Inc.;	 Bangor	 Gas	 Company,	 LLC;	
Industrial	Energy	Consumer	Group	(IECG);	Maine	Natural	Gas	Corporation;	Calpine	Corporation;	and	
Emera	Maine.		Calpine	Corporation	later	withdrew	as	an	intervenor.	
   	
   6		The	bench	analysis	is	“not	a	recommendation,”	but	rather	information	“that	the	staff	believe	

would	be	helpful	to	the	Commission	to	have	in	the	record.”	
   	
6	

“certain	assumptions	and	methodological	approaches”	that	had	been	used	by	

the	 Trust.	 	 In	 particular,	 the	 staff’s	 calculation	 of	 avoided	 costs	 used	 energy	

price	 forecasts	 from	 a	 June	 2015	 report	 that	 had	 been	 prepared	 by	 its	

consultant,	 London	 Economics	 International	 (LEI),	 for	 use	 in	 a	 different,	

unrelated	 Commission	 proceeding.	 	 The	 staff	 used	 the	 LEI	 forecast	 for	 its	

analysis	because	it	determined	that	the	AESC	report	was	premised	on	outdated	

data,	and	that	energy	prices	had	dropped	since	the	AESC	report	was	released.	

	      [¶9]		The	bench	analysis	also	utilized	a	different	discount	rate	than	did	

the	 Trust.	 	 Though	 the	 Trust	 had	 selected	 a	 discount	 rate	 of	 4.36%	 in	 the	

Triennial	Plan,	the	staff	used	a	discount	rate	of	8.5%	(comprising	a	real	discount	

rate	of	6.62%	and	the	same	inflation	rate	of	1.88%	used	by	the	Trust).		The	staff	

based	this	decision	on	the	Commission’s	order	on	the	Second	Triennial	Plan,	

which	explained	that	it	was	more	appropriate	to	use	a	discount	rate	in	the	range	

of	7-10%	because	that	was	the	rate	the	Commission	typically	used	to	evaluate	

benefits	 over	 long	 periods	 of	 time	 when	 ratepayers	 bear	 the	 costs	 of	 the	

transaction.	 	 See	 Efficiency	 Maine	 Trust,	 Request	 for	 Approval	 of	 Second	

Triennial	Plan,	No.	2012-449,	Order	at	39	(Me.	P.U.C.	Mar.	6,	2013).	

	      [¶10]		Another	technical	conference	was	held	on	March	2,	2016.		Later	

that	 month,	 CLF	 and	 Natural	 Resources	 Council	 of	 Maine	 (NRCM)	 filed	 joint	
                                                                                   7	

rebuttal	 testimony,	 and	 the	 Trust	 filed	 rebuttal	 and	 supplemental	 rebuttal	

testimony.	 	 A	 hearing	 was	 held	 over	 two	 days	 in	 March	 and	 April	 2016;	

meanwhile,	 from	 March	 to	 early	 May,	 the	 parties	 participated	 in	 settlement	

conferences.		On	May	25,	the	Trust	filed	a	proposed	stipulation	regarding	the	

Triennial	Plan	that	was	signed	by	the	Trust;	the	Office	of	the	Public	Advocate	

(OPA);	 Central	 Maine	 Power	 Company;	 Emera	 Maine;	 Northern	 Utilities,	 Inc.	

d/b/a	Unitil;	Summit	Natural	Gas	of	Maine;	and	NRCM.		Maine	Natural	Gas	and	

Bangor	Gas	Company,	LLC,	did	not	sign	the	stipulation	but	did	not	oppose	it.		

CLF	and	the	Industrial	Energy	Consumer	Group	(IECG)	were	the	only	parties	to	

oppose	the	stipulation.		The	stipulation	addressed	issues	pertaining	to,	among	

other	things,	“the	methodology	and	assumptions	for	determining	the	measures	

and	 amounts	 of	 energy	 efficiency	 that	 are	 [MACE]”	 for	 electric	 energy	 and	

natural	gas	conservation	programs.		It	adopted	figures	and	methodology	from	

the	bench	analysis	and	reduced	the	total	budget	for	energy	efficiency	programs.	

	     [¶11]	 	 CLF	 and	 IECG	 filed	 oppositions	 to	 the	 stipulation,	 ultimately	

objecting	 to	 the	 reduction	 in	 the	 triennial	 budget	 for	 energy	 efficiency	

programs.	 	 IECG	 argued	 that	 the	 Commission	 should	 not	 have	 based	 its	

calculation	of	avoided	costs	on	the	LEI	forecasts,	which	it	asserted	were	flawed	

and	 not	 subject	 to	 discovery	 or	 cross-examination,	 and	 so	 reliance	 on	 the	
8	

forecasts	was	unreasonable.		CLF	asserted	that	the	terms	of	the	stipulation	are	

contrary	to	statutory	mandates	because	the	plan’s	discount	rate	and	avoided	

costs	 calculations	 did	 not	 reflect	 regional	 best	 practices,	 the	 plan	 failed	 to	

determine	 MACE	 on	 a	 gross	 basis,	 and	 the	 plan’s	 natural	 gas	 savings	 fell	

substantially	 below	 the	 MACE	 potential.	 	 The	 Trust	 and	 OPA	 filed	 responses	

asserting	 that	 the	 content	 of	 the	 stipulation	 was	 consistent	 with	 applicable	

statutes.	 	 In	 June,	 the	 Commission	 heard	 oral	 argument	 concerning	 the	

competing	positions.	

	      [¶12]	 	 On	 July	 6,	 2016,	 the	 Commission	 issued	 an	 order	 approving	 the	

stipulation.		The	Commission	found	IECG’s	argument	“unpersuasive”	because	

the	 LEI	 forecasts	 were	 available	 for	 discovery	 and	 cross-examination.		

Responding	 to	 CLF’s	 concern	 that	 the	 terms	 of	 the	 stipulation	 did	 not	 use	

regional	best	practices,	the	Commission	explained:	“Energy	market	conditions	

change	 regularly	 and	 can	 be	 volatile,	 and	 prices	 are	 difficult	 to	 predict	 with	

accuracy.		For	these	reasons,	it	is	important	to	consider	the	most	current	and	

available	 forecasts,	 particularly	 in	 times	 of	 rapid	 change	 in	 markets.”	 	 It	

continued,	 “No	 single	 report	 .	 .	 .	 can	 claim	 the	 title	 of	 regional	 best	 practice	

under	statute,	and	the	Commission’s	decision	is	more	reasonably	informed	by	

a	variety	of	market	information	set	forth	in	the	record,	including,	for	example[,]	
                                                                                         9	

the	more	current	LEI	forecasts.”		The	Commission	determined	that	“reliance	on	

the	 AESC	 would	 ignore	 recent	 material	 changes	 in	 energy	 prices	 and	 would	

overstate	 the	 benefits	 associated	 with	 energy	 efficient	 investments,”	 and	

therefore	 the	 stipulation	 was	 not	 flawed	 for	 its	 reliance	 on,	 “among	 other	

things,	the	LEI	forecasts	for	the	purpose	of	calculating	avoided	costs.”	

	     [¶13]		Regarding	the	stipulation’s	agreement	on	a	blended	discount	rate,	

comprising	a	rate	of	8.5%	for	funds	received	directly	from	ratepayers	and	a	rate	

of	4.36%	for	funds	received	from	other	sources,	the	Commission	explained	that	

CLF	“has	not	provided	any	support	for	why	the	discount	rate	developed	for	the	

AESC	 constitutes	 a	 regional	 best	 practice.”	 	 Furthermore,	 it	 determined	 that	

“the	 discount	 rates	 utilized	 by	 various	 New	 England	 states	 show[]	 that	 the	

states	take	a	varied	approach,	and	the	blended	rate	used	by	the	[s]tipulation	

falls	 within	 the	 varied	 range	 of	 discount	 rates	 utilized	 in	 the	 New	 England	

region.”	 	 It	 continued,	 “A	 fully	 litigated	 case	 may	 have	 landed	 on	 different	

discount	 rates,	 but	 the	 overall	 result	 here	 is	 reasonable,	 in	 keeping	 with	 the	

Commission’s	 prior	 findings	 and	 conclusions	 regarding	 appropriate	 discount	

rates	 in	 application	 to	 ratepayer	 funds,	 and	 otherwise	 consistent	 with	

35-A	M.R.S.	§	10110(4-A).”	
10	

	       [¶14]	 	 Concerning	 net	 versus	 gross	 cost	 screening,	 the	 Commission	

determined	that	the	stipulation	comported	with	the	statute	because	the	statute	

“directs	the	Commission	to	not	only	consider	gross	savings,	but	also	to	consider	

net	savings	to	account	for	the	effects	of	free-ridership	and	spillover.”7	

	       [¶15]		Finally,	regarding	natural	gas,	the	Commission	concluded	that	CLF	

relied	on	an	outdated	study	that	“is	not	current	and	would	overstate	potential	

savings	 due	 to	 changes	 in	 both	 price	 and	 load	 growth	 expectations,”	 and	

explained	that	the	approach	taken	in	the	stipulation	“is	reasonable,	and	is	likely	

to	 more	 accurately	 reflect	 [local	 distribution	 company	 (LDC)]	 growth,	 which	

has	been	affected	by	the	relatively	low	oil	prices.”		The	Commission	also	noted	

that	 the	 stipulation	 results	 in	 an	 overall	 funding	 level	 that	 is	 “robust,”	 and	

would	produce	“a	diverse	portfolio	of	efficiency	programs	made	available	to	a	

range	of	customer	groups	and	geographic	areas.”	

	       [¶16]	 	 CLF	 timely	 appealed	 the	 Commission’s	 order	 approving	 the	

stipulation.		See	35-A	M.R.S.	§	1320	(2016);	M.R.	App.	P.	2(b)(3),	22(a).	

   7		“Gross	savings”	are	all	savings	that	would	result	from	implementation	of	an	efficiency	measure,	

whereas	 “net	 savings”	 adjusts	 for	 outside	 influences	 such	 as,	 for	 example,	 savings	 derived	 from	
free-riders,	who	would	utilize	an	efficiency	measure	even	without	the	conservation	program	in	place.	
   	
                                                                                        11	

                                    II.		DISCUSSION	

	      [¶17]		“We	review	decisions	of	the	Commission	with	great	deference	only	

to	 determine	 whether	 the	 agency’s	 conclusions	 are	 unreasonable,	 unjust	 or	

unlawful	in	light	of	the	record.”		Taylor	v.	Pub.	Utils.	Comm'n,	2016 ME 71,	¶	5,	

138 A.3d 1214 (quotation	marks	omitted).		We	will	overturn	an	order	of	the	

Commission	only	when	it	“abuses	the	discretion	entrusted	to	it,	or	fails	to	follow	

the	 mandate	 of	 the	 [L]egislature,	 or	 to	 be	 bound	 by	 the	 prohibitions	 of	 the	

constitution.”	 	 Id.	 (quotation	 marks	 omitted).	 	 It	 is	 the	 appellant’s	 burden	 to	

establish	that	the	Commission	has	violated	one	of	these	standards.		Id.	

	      [¶18]		When	we	review	the	Commission’s	interpretation	of	a	statute	that	

it	administers	and	that	is	within	its	expertise,	“we	apply	a	two-part	inquiry.”		

Cent.	 Me.	 Power	 Co.	 v.	 Pub.	 Utils.	 Comm’n,	 2014 ME 56,	 ¶	 18,	 90 A.3d 451 

(quotation	marks	omitted).		First,	we	“determine	de	novo	whether	the	statute	

is	 reasonably	 susceptible	 of	 different	 interpretations	 and	 therefore	

ambiguous.”	 	 Id.	 (quotation	 marks	 omitted).	 	 Second,	 “we	 either	 review	 the	

Commission’s	 construction	 of	 the	 ambiguous	 statute	 for	 reasonableness	 or	

plainly	construe	the	unambiguous	statute.”		Id.	(quotation	marks	omitted).		We	

are	 not	 bound	 by	 the	 Commission’s	 interpretation	 of	 a	 statute,	 but	 “such	 an	

interpretation	is	entitled	to	deference	and	should	be	upheld	unless	the	statute	
12	

plainly	 compels	 a	 contrary	 result.”	 	 Office	 of	 the	 Pub.	 Advocate	 v.	 Pub.	 Utils.	

Comm'n,	2003 ME 23,	¶	19,	816 A.2d 833 (quotation	marks	omitted).		We	have,	

however,	 overturned	 Commission	 orders	 that	 violate	 legislative	 mandates.		

See	id.	¶¶	1,	29.	

A.	    Statutory	Mandates	for	Electric	Energy	Efficiency	

	      1.	    Mandate	to	“Make	Use	of	Best	Practices	Across	the	Region”	
	
	      [¶19]		CLF	argues	that	the	terms	of	the	stipulation	and	the	Commission’s	

order	 approving	 the	 stipulation	 violate	 a	 statutory	 mandate	 to	 make	 use	 of	

regional	 best	 practices	 when	 calculating	 avoided	 energy	 costs	 and	 setting	 a	

discount	rate	for	purposes	of	determining	electric	MACE.	

	      [¶20]		Title	35-A	M.R.S.	§	10110(4-A)	provides,	in	relevant	part:	

       When	 determining	 the	 amount	 of	 cost-effective	 electric	 energy	
       efficiency	 resources	 to	 be	 procured	 under	 this	 subsection,	 the	
       [C]ommission	shall:	
       	
       	      .	.	.	.	
       	
       Ensure	 that	 calculations	 of	 avoided	 energy	 costs	 and	 the	 budget	
       identified	by	the	trust	in	its	triennial	plan	as	needed	to	capture	all	
       cost-effective	efficiency	resources	are	reasonable,	based	on	sound	
       evidence	and	make	use	of	best	practices	across	the	region.	
       	
	      [¶21]		CLF	argues	that	the	AESC	study	sets	forth	the	regional	best	practice	

to	calculate	avoided	energy	costs	and	set	a	discount	rate,	which	is	integral	to	
                                                                                                            13	

the	determination	of	cost-effectiveness	and,	as	a	result,	MACE.8		CLF	points	to	

record	 evidence	 that	 the	 AESC	 report	 was	 developed	 in	 collaboration	 with	

stakeholders	 from	 other	 New	 England	 states,	 is	 used	 by	 all	 other	 energy	

efficiency	program	administrators	in	New	England,	and	is	considered	by	CLF’s	

consultant	 to	 be	 “extremely	 credible,	 given	 the	 contributions	 made	 to	 the	

report	from	all	of	the	relevant	stakeholders	in	New	England.”	

	       [¶22]	 	 The	 Commission	 counters	 that	 it	 was	 not	 required	 to	 rely	

exclusively	on	a	single	“best”	practice	because	the	statute	effectively	creates	a	

“three-part,	conjunctive	test,”	requiring	avoided	energy	cost	calculations	and	

the	discount	rate	to	(1)	be	“reasonable,”	(2)	be	“based	on	sound	evidence,”	and	

(3)	 “make	 use	 of	 best	 practices	 across	 the	 region.”	 	 See	 35-A	 M.R.S.	

§	10110(4-A)(B).		 Accordingly,	“[r]elying	wholesale	on	the	AESC	would	have	

been	 inconsistent	 with	 the	 other	 requirements	 of	 section	 10110(4-A).”		

Further,	the	Commission	asserts	that	even	if	the	AESC	were	established	to	be	a	

    8		CLF	also	argues	that	the	discount	rate	conflicts	with	the	Trust’s	rules,	which	provide:	

    	
        The	 discount	 rate	 used	 for	 present	 value	 calculations	 shall	 be	 the	 current	 yield	 of	
        long-term	(10	years	or	longer)	U.S.	Treasury	securities,	adjusted	for	inflation.		The	
        Commission	 may	 consider	 an	 alternative	 discount	 rate	 when	 characteristics	 of	 a	
        program	are	inconsistent	with	use	of	long-term	U.S.	Treasury	securities.	
   	
12 C.M.R. 95 648	380-2	§	4(A)(3)	(2010).		Compliance	with	this	rule	was	not	addressed	in	the	order	
approving	 the	 stipulation.	 	 However,	 considering	 the	 discretion	 granted	 to	 the	 Commission	 by	
12 C.M.R. 95 648	380-2	§	4(A)(3),	we	discern	no	violation	of	the	rule.	
14	

regional	 best	 practice,	 it	 is	 more	 reasonably	 viewed	 as	 setting	 forth	 a	

methodology	used	to	estimate	avoided	energy	costs	rather	than	establishing	a	

set	of	specific	forecast	figures.	

	     [¶23]		In	analyzing	this	issue,	we	first	determine	whether	the	statute	is	

ambiguous.		See	Cent.	Me.	Power	Co.,	2014 ME 56,	¶	18,	90 A.3d 451.		Looking	to	

the	plain	language	of	section	10110(4-A),	the	requirement	that	the	Commission	

ensure	that	avoided	energy	costs	and	the	budget	identified	by	the	Trust	in	the	

triennial	 plan	 “make	 use	 of	 best	 practices	 across	 the	 region”	 is	 reasonably	

susceptible	to	more	than	one	interpretation	because	it	is	unclear	precisely	how	

the	 Commission	 must	 “make	 use	 of”	 such	 practices.	 	 It	 could	 mean,	 as	 CLF	

asserts,	 that	 the	 Commission	 must	 employ	 the	 specific	 practices	 deemed	 the	

“best”	 in	 the	 region;	 alternatively,	 the	 Commission	 could	 “make	 use	 of”	 best	

regional	 practices	 by	 considering	 them	 in	 conjunction	 with	 other	 factors	

relevant	 to	 its	 analysis.	 	 The	 statute	 is	 therefore	 ambiguous,	 and	 the	

Commission’s	interpretation	of	the	statute	is	entitled	to	significant	deference.		

Houlton	Water	Co.	v.	Pub.	Utils.	Comm’n,	2014 ME 38,	¶	24,	87 A.3d 749.	

	     [¶24]		Next,	we	determine	whether	the	Commission’s	interpretation	of	

the	statute	is	reasonable.		Id.		The	Commission’s	view	of	the	statute	as	requiring	

a	 three-prong,	 blended	 analysis	 finds	 support	 in	 principles	 of	 statutory	
                                                                                   15	

construction,	as	the	statute	requires	the	Commission	to	ensure	that	calculations	

of	 avoided	 energy	 costs	 and	 the	 budget	 “are	 reasonable,	 based	 on	 sound	

evidence	 and	 make	 use	 of	 best	 practices	 across	 the	 region.”	 	 35-A	 M.R.S.	

§	10110(4-A)	(emphasis	added).		To	interpret	the	statute	as	mandating	reliance	

solely	on	a	regional	best	practice	would	render	superfluous	the	requirements	

that	calculations	be	reasonable	and	based	on	sound	evidence.		See	Blue	Yonder,	

LLC	v.	State	Tax	Assessor,	2011 ME 49,	¶	10,	17 A.3d 667 (“Words	in	a	statute	

must	 be	 given	 meaning	 and	 not	 treated	 as	 meaningless	 and	 superfluous.”	

(quotation	marks	omitted)).		Moreover,	if	a	particular	practice	was	the	“best	

practice	 across	 the	 region,”	 but	 the	 Commission	 determined	 that	 it	 was	 not	

reasonable	or	based	on	sound	evidence,	it	would	be	illogical	to	interpret	the	

statute	 as	 requiring	 the	 Commission	 to	 use	 that	 practice	 nonetheless.	 	 See	

Competitive	 Energy	 Servs.,	 LLC	 v.	 Pub.	 Utils.	 Comm’n,	 2003 ME 12,	 ¶	 18,	

818 A.2d 1039 (“[W]e	avoid	statutory	constructions	that	create	absurd,	illogical	

or	inconsistent	results.”	(quotation	marks	omitted)).	

	     [¶25]	 	 The	 approach	 taken	 in	 the	 stipulation	 adopts	 the	 avoided	 costs	

predictions	from	the	bench	analysis,	which	used	the	LEI	forecasts	to	calculate	

avoided	costs.		The	record	reflects	that	the	Commission	considered	the	AESC	

report,	 but	 ultimately	 determined	 that	 its	 decision	 was	 “more	 reasonably	
16	

informed	by	a	variety	of	market	information	set	forth	in	the	record,”	including	

the	“more	current	LEI	forecasts,”	because	the	AESC	does	not	account	for	recent	

energy	price	changes	and	would	thus	overstate	energy	efficiency	investment	

benefits.	 	 The	 Commission’s	 analysis	 was	 reasonable	 and	 in	 accordance	 with	

section	10110(4-A),	and	therefore	we	will	not	disturb	its	conclusion.	

	        [¶26]		The	Commission	contends	that	the	same	three-prong	test	applies	

to	its	selection	of	a	discount	rate.		The	stipulation	applies	a	blended	discount	

rate	comprising	a	discount	rate	of	8.5%	for	funds	collected	by	the	utilities	from	

ratepayers	 and	 4.36%	 for	 funds	 received	 from	 other	 sources.	 	 In	 the	 order	

approving	the	stipulation,	the	Commission	noted	that	New	England	states	take	

“a	varied	approach”	to	discount	rates	and	concluded	that	this	blended	rate	was	

reasonable	“in	keeping	with	the	Commission’s	prior	findings	and	conclusions	

regarding	appropriate	discount	rates,”	and	consistent	with	the	requirements	of	

section	 10110(4-A).	 	 In	 its	 order,	 the	 Commission	 found	 that	 there	 was	 no	

support	 for	 CLF’s	 contention	 that	 the	 discount	 rate	 developed	 for	 the	 AESC	

constitutes	a	best	regional	practice,	and	it	noted	that	the	blended	discount	rate	

falls	within	the	range	of	other	New	England	states.9	

    9	 	 The	 Commission	 had	 evidence	 that	 other	 New	 England	 states’	 discount	 rates	 are	 as	 follows:	

Connecticut,	 7.43%;	 New	 Hampshire,	 2.46%;	 Rhode	 Island,	 1.15%;	 Massachusetts,	 0.55%;	 and	
Vermont,	3.00%.	
                                                                                   17	

	     [¶27]		Here	also,	the	Commission’s	interpretation	and	application	of	the	

statute	with	respect	to	the	determination	of	the	discount	rate	were	reasonable.		

Accordingly,	 we	 conclude	 that	 the	 Commission	 did	 not	 violate	 a	 statutory	

mandate	when	it	approved	the	stipulation.	

	     2.	    Mandate	to	Consider	Gross	Efficiency	Savings	

	     [¶28]	 	 The	 stipulation	 provides	 that	 in	 determining	 electric	 MACE,	

“[b]enefit-to-cost	ratios	will	be	determined	on	a	net	basis.”		CLF	argues	that	this	

conflicts	with	35	M.R.S.	§	10110(4-A),	which	provides:	

      The	 [C]ommission	 shall	 consider	 gross	 efficiency	 savings	 for	 the	
      purpose	of	determining	savings	that	are	cost-effective,	reliable	and	
      achievable	and	shall	consider	both	net	and	gross	efficiency	savings	
      for	the	purpose	of	determining	the	appropriateness	of	the	amount	
      identified	by	the	trust	in	its	triennial	plan	as	needed	to	capture	all	
      cost-effective	electric	energy	efficiency	resources.	
      	
This	statute,	CLF	argues,	“unambiguously	directs	the	Commission	to	make	two	

separate	 and	 distinct	 determinations,	 first	 with	 respect	 to	 what	 constitutes	

electric	 MACE,	 and	 second	 regarding	 the	 surcharge	 on	 ratepayers	 needed	 to	

fund	the	capture	of	electric	MACE.”		The	Commission	argues	that	the	terms	of	

the	stipulation	are	not	contrary	to	the	statute	because	they	are	consistent	with	

the	Commission’s	approach	to	determine	MACE	on	a	net	basis	for	setting	the	

level	of	ratepayer	funding	and	on	a	gross	basis	for	allowing	the	Trust	to	pursue	

savings	that	are	not	funded	with	ratepayer	money.	
18	

	     [¶29]	 	 We	 again	 begin	 by	 determining	 whether	 section	 10110(4-A)	 is	

ambiguous	and,	if	it	is,	whether	the	Commission’s	interpretation	of	the	statute	

was	reasonable.		See	Cent.	Me.	Power	Co.,	2014 ME 56,	¶	18,	90 A.3d 451.		The	

plain	 language	 of	 the	 statute	 does	 not	 specify	 how	 the	 Commission	 must	

“consider”	gross	savings	in	determining	MACE.		However,	both	the	Commission	

and	CLF	assert	that	section	10110(4-A)	effectively	codified	the	Commission’s	

approach	 from	 its	 order	 regarding	 the	 Second	 Triennial	 Plan,	 where	 the	

Commission	noted	that	the	Trust	had	calculated	benefit-cost	ratios	and	made	

MACE	determinations	using	gross	savings	figures	but	used	net	savings	figures	

to	 determine	 what	 measures	 and	 programs	 would	 be	 a	 cost-effective	 use	 of	

ratepayer	 funds.	 	 See	 Efficiency	 Maine	 Trust,	 Request	 for	 Approval	 of	 Second	

Triennial	Plan,	No.	2012-449,	Order	at	41-44	(Me.	P.U.C.	Mar.	6,	2013).	

	     [¶30]		Based	on	the	statute’s	language,	we	conclude	that	it	is	ambiguous.		

The	statute	is	not	clear	as	to	how	or	to	what	extent	that	the	Commission	must	

“consider”	gross	savings	for	the	purpose	of	determining	MACE,	and	the	statute	

could	be	reasonably	construed	to	have	more	than	one	interpretation.		We	thus	

consider	 whether	 the	 Commission’s	 interpretation	 of	 the	 statute	 was	

reasonable,	“according	great	deference	to	[its]	interpretation.”		Houlton	Water	

Co.,	2014 ME 38,	¶	24,	87 A.3d 749 (quotation	marks	omitted).	
                                                                                         19	

	      [¶31]		In	the	order	approving	the	stipulation,	the	Commission	explained	

that	the	stipulation	complies	with	the	statute,	“which	directs	the	Commission	

to	not	only	consider	gross	savings,	but	also	to	consider	net	savings	to	account	

for	 the	 effects	 of	 free-ridership	 and	 spillover.”	 	 It	 noted	 that	 the	 Legislature	

“effectively	codifie[d]	how,	in	its	order	approving	the	Second	Triennial	Plan,	the	

Commission	treated	the	question	of	whether	to	screen	for	cost-effectiveness	on	

a	 net	 or	 gross	 basis,”	 which	 was	 to	 “screen[]	 measures	 to	 be	 funded	 with	

ratepayer	 dollars	 on	 a	 net	 basis.”	 	 See	 Efficiency	 Maine	 Trust,	 Request	 for	

Approval	 of	 Second	 Triennial	 Plan,	 No.	 2012-449,	 Order	 at	 41-44	

(Me.	P.U.C.	Mar.	6,	2013).	

	      [¶32]	 	 The	 Commission’s	 interpretation	 of	 the	 statute	 is	 reasonable.		

Determining	 benefit-to-cost	 ratios	 on	 a	 net	 basis	 is	 consistent	 with	 the	

Commission’s	past	approach	and	with	the	requirements	of	section	10110(4-A).		

See	 Office	 of	 the	 Pub.	 Advocate,	 2003 ME 23,	 ¶	 19,	 816 A.2d 833.	 	 The	

Commission	 considered	 calculations	 of	 gross	 savings	 to	 determine	 MACE;	

however,	 the	 language	 of	 the	 statute	 does	 not	 require	 that	 the	 Commission	

make	an	independent	calculation	of	MACE	based	exclusively	on	gross	savings,	

separate	and	apart	from	its	determination	of	the	appropriateness	of	the	amount	
20	

needed	to	capture	all	MACE.		Accordingly,	this	aspect	of	the	stipulation	is	not	

contrary	to	the	statute.	

B.	   Mandate	to	Capture	All	Natural	Gas	MACE	
	
	     [¶33]		Title	35-A	M.R.S.	§	10111(2)	provides	that	the	Commission	“shall	

assess	 each	 gas	 utility,	 in	 accordance	 with	 the	 triennial	 plan,	 an	 amount	

necessary	to	capture	all	[MACE].”		See	also	35-A	M.R.S.	§	10104(4)(D)	(stating	

that	 the	 Commission	 shall	 “approve	 all	 elements	 of	 the	 triennial	 plan	 it	

determines	to	be	[MACE]”).		CLF	argues	that	the	Commission	erroneously	relied	

on	 historic	 data	 instead	 of	 projections	 of	 natural	 gas	 MACE,	 and	 that	 the	

approach	taken	in	the	stipulation	falls	short	of	funding	all	natural	gas	MACE	as	

required	by	the	statute.		CLF	urges	that	the	Commission	should	have	relied	on	

a	study	prepared	in	2014	by	a	consultant	for	the	Trust	to	investigate	natural	

gas	energy	efficiency	opportunities	in	Maine.	

	     [¶34]		In	its	order,	the	Commission	explained	that	the	study	relied	on	by	

the	Trust	was	“dated”	and	“would	overstate	potential	savings	due	to	changes	in	

both	 price	 and	 load	 growth	 expectations	 since	 2014.”	 	 It	 concluded	 that	 the	

approach	taken	in	the	stipulation	regarding	natural	gas	MACE	“is	reasonable,	

and	is	likely	to	more	accurately	reflect	LDC	growth,	which	has	been	affected	by	

the	relatively	low	oil	prices.”	
                                                                                21	

	     [¶35]		The	Commission	has	discretion	to	approve	what	it	determines	to	

be	MACE,	and	we	defer	to	the	Commission’s	technical	expertise.		See	35-A	M.R.S.	

§	10104(4);	Office	of	the	Pub.	Advocate	v.	Pub.	Utils.	Comm'n,	2015 ME 113,	¶	15,	

122 A.3d 959.		Although	the	Trust	had	a	different	projection	of	what	constituted	

natural	gas	MACE,	the	Commission	expressed	valid	concerns	about	the	study	

relied	 upon	 by	 the	 Trust	 and	 determined	 that	 the	 approach	 taken	 in	 the	

stipulation,	 which	 reflected	 recent	 market	 changes,	 was	 superior.		

Furthermore,	the	terms	of	the	stipulation	provide	that	the	natural	gas	budget	is	

adjustable	each	year	depending	on	increased	customer	and	load	growth.	

	     [¶36]		We	conclude	that	it	was	not	erroneous	for	the	Commission	to	base	

its	determination	of	natural	gas	MACE	on	historical	data	rather	than	on	future	

projections,	and	that	the	Commission	did	not	abuse	its	discretion	by	approving	

the	stipulation.	

	     The	entry	is:	

	     	      	      Judgment	affirmed.	
	
	     	      	      	    	     	
	
	
	
	
	
	
22	

Emily	K.	Green,	Esq.	(orally),	Sean	Mahoney,	Esq.	and	Greg	Cunningham,	Esq.,	
Conservation	 Law	 Foundation,	 Portland,	 for	 appellant	 Conservation	 Law	
Foundation	
	
Amy	 B.	 Mills,	 Esq.	 (orally),	 and	 Mitchell	 M.	 Tannenbaum,	 Esq.,	 Maine	 Public	
Utilities	Commission,	Augusta,	for	appellee	Public	Utilities	Commission	
	
Catherine	 R.	 Connors,	 Esq.,	 and	 Liam	 J.	 Paskvan,	 Esq.,	 Pierce	 Atwood,	 LLP,	
Portland,	 and	 Patrick	 Taylor,	 Esq.,	 Unitil	 Service	 Corp.,	 Hampton,	 New	
Hampshire,	for	appellee	Northern	Utilities,	Inc.		
	
Janet	T.	Mills,	Attorney	General,	and	Christopher	C.	Taub,	Asst.	Atty.	Gen.,	Office	
of	the	Attorney	General,	Augusta,	for	appellee	Efficiency	Maine	Trust	
	
	
Public	Utilities	Commission	docket	number	2015-00175	
FOR	CLERK	REFERENCE	ONLY