On Friday, January 6, Maine Governor Paul LePage released his biennial general fund budget for 2018-19. The Governor’s proposed biennial budget and briefing document can be found here. The main priority in the Budget is reducing Maine’s top income tax rate from 10.15 percent to 7.15 percent this year, and then implementing a flat tax of 5.75 percent by 2020. The Budget also purports to make changes to how General Purpose Aid to Education is distributed to public K-12 schools, eliminate State support for General Assistance, eliminates the cap on public charter schools, elevates information services and cybersecurity to a new Cabinet-level Department, tightens eligibility requirements for Medicaid, creates a new statewide public defender system, allows municipalities to assess municipal service fees on large not-for-profit entities, and eliminates 500 state government jobs (300 of which are currently vacant).
The PUC has issued a proposed rule that would change Maine’s net metering compensation for rooftop solar (and other distributed generation). Under Maine’s current rule, customers that generate power are given a credit equal to the full retail rate of electricity.
The proposed rule would gradually reduce the portion of a generating customer’s electric bill that the customer is able to “net” against, and, over time, require the customer to pay a higher portion of their bill, regardless of how much energy the customer generates and delivers to the grid.
With cold weather approaching, natural gas production expected to rise and expansion projects underway, Verrill Dana and Pierce Atwood will host their fourth annual, Natural Gas: Where do we go from here? on Thursday, October 6 at The Woodlands in Falmouth, Maine.
The all-day event, co-chaired by Verrill Dana attorney William Harwood, will feature keynote speaker, Patrick Woodcock, Director of the Governor’s Energy Office and lunchtime speaker, Former Maine Public Utilities Chair, Tom Welch. Panel discussions will cover:
- “Gas vs. Renewables – Allies or competitors?” - Featuring Verrill Dana attorney Jim Cohen
- “Safety – Are we doing enough?” - Featuring Verrill Dana attorney Katie Gray
- “Pipeline Expansion – Do we still need it?”
Find more details on the event and the full agenda on Verrill Dana’s website.
The U.S. Court of Appeals for the D.C. Circuit has invalidated the issuance by the U.S. Fish and Wildlife Service (USFWS) of an incidental take permit (ITP) under Section 10 of the Endangered Species Act for take of Indiana bats by the 100-turbine Buckeye Wind project in Ohio.
The Circuit Court held that USFWS violated the National Environmental Policy Act (NEPA) by failing to consider a reasonable range of alternatives because it did not consider an alternative proposed by project opponents that the wind power project curtail operations with cut-in speeds of 6.5 meters per second. The ITP was issued based on the condition that the project curtail operations at 6 meters per second, the alternative proposed by Buckeye Wind.
In its NEPA analysis USFWS had considered alternatives including no action, curtailment at 5 meters per second, curtailment at 6 meters per second (Buckeye Wind’s proposal), and nighttime shutdown of all turbines at all wind speeds. USFWS argued that consideration of curtailment at 6.5 meters per second was not necessary because the agency does not need to consider “an infinite array of potential protective measures.”
However, the Court held that USFWS needed to consider at least one economically feasible alternative that was more protective than Buckeye Wind’s proposal of 6 meters per second. The lesson here apparently being that a project applicant subject to NEPA should start with a lowball proposed alternative rather than the industry standard (e.g. 6 meters per second curtailment of wind turbines for protection of bat species), because a court will invalidate a NEPA analysis that does not consider a more protective and economically feasible alternative to what the applicant has proposed.
The D.C. Circuit’s remand of Buckeye Wind’s ITP is the second time in as many months that it has flipped an agency approval of a wind power project based on a NEPA violation. In July the Court sent Cape Wind back to the drawing board when it held that the Bureau of Ocean Energy Management violated NEPA by relying on inadequate geophysical and geotechnical surveys.
On Tuesday, July 26, more than a hundred professionals gathered outside in Verrill Dana’s courtyard in Portland, Maine for the E2Tech Summer Networking Reception. Attendees included numerous area businesses, government officials, professionals, and non-profit leaders from across the state within the energy and environmental sectors. Verrill Dana partner Kelly Baetz, of the firm’s Environmental Group, is a board member of E2Tech. Verrill Dana partner Jim Cohen, of the firm’s Utilities and Energy Group, welcomed guests to the event.
Much of the discussion around solar policy focuses on rooftop solar. While rooftop solar is an option for certain homeowners with suitable rooftops and some extra cash in the bank (or the ability to obtain financing), rooftop solar is not available to a large segment of the population. Community solar offers the possibility of making solar panels accessible to a much larger group of interested investors. Because transaction costs and other “soft costs” make up a large portion of solar energy projects, community solar benefits from greater efficiencies and could reduce the payback period compared to smaller, single-owner projects.
Although Maine’s community solar capacity has been slow to take off, since 2014 community solar farms have begun to crop up around the state. Several large projects are currently in the works, including a large project in China, Maine scheduled for completion this fall.
Below is an overview of how community solar works in Maine.
Arbitration Award of $1.5 Million to Xpress Natural Gas, LLC Affirmed by Maine Supreme Judicial Court
Recently, the Maine Supreme Judicial Court affirmed an arbitrator’s award of $1.5 million to Xpress Natural Gas, LLC. The court upheld the arbitrator’s decision that Cate Street Capital Inc. was responsible for payments to Xpress Natural Gas that Cate Street’s subsidiary, GNP Parent, LLC (formerly known as Great Northern Paper Company, LLC) owed Xpress Natural Gas for the delivery of compressed natural gas to the Great Northern Paper Mill in East Millinocket (and for the installation costs of certain associated facilities).
The dispute arose from GNP’s failure to prepare the mill for the installation of equipment and for delivery of gas by March 31, 2013. After agreements to extend that deadline expired and GNP failed to make required payments, the parties proceeded to private arbitration. Deferring to the arbitrator’s interpretation of the “guarantee” in a particular commercial agreement, the Court found that arbitrator’s interpretation was “rationally derived from the agreement.” The Court rejected GNP’s argument that the arbitrator exceeded his authority by interpreting the guarantee in a way that showed “manifest disregard for the contract.”
When explaining the standard that the Court applies when reviewing an arbitrator’s award, the Court noted that even when the arbitrator’s interpretation is erroneous, if the interpretation is rationally derived from the agreement, the arbitrator has not exceeded the arbitrator’s authority. However, an arbitrator may not base an award on the arbitrator’s “own individual concept of justice in the particular area involved” or directly contradict the agreement.