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Ajay Lesperance is president of United Steelworkers Local 900 in Rumford. Michael Higgins is president of United Steelworkers Local 4-9 in Skowhegan. Herman Drouin is president of United Steelworkers Local 449 in Waterville.
Each of us is a president of a Maine labor union local at different Maine manufacturing facilities. Our locals are proudly affiliated with the United Steel Workers. We represent nearly 2,000 hard-working Maine citizens in total at the ND Paper pulp and paper mill in Rumford, the Huhtamaki recycled fiber products plant in Waterville and Fairfield, and the Sappi pulp and paper mill in Skowhegan. Our members’ jobs depend directly on the continuing health of our mills. In rural Maine, these mills also are the economic backbones of our regional economies.
Maine manufacturers, including our mills, are greatly vulnerable to high Maine energy costs. Our competitors in other states and nations usually have lower energy costs. Electricity costs, determined in part by the Maine Public Utilities Commission, are a big part of this.
Energy costs contributed to the recent closure of the Pixelle paper mill in Jay and the Dragon Products cement plant in Thomaston. Those are big losses for Maine’s economy. Maine once had more than a dozen paper mills. Maine now has only six, two of which buy cheaper electricity in New Brunswick.
We know the PUC is well aware of the risks of high energy costs, particularly the net energy billing costs created by the Legislature, and not by the PUC. Net energy billing (NEB) is a program vastly expanded by the Legislature in 2019 to pay smaller renewable generators extremely high fixed prices unrelated to their costs or to competitive energy prices. NEB prices are considerably higher than the cost of other renewables. Maine now has hundreds of these expensive projects in operation.
The PUC has an ongoing case to decide how those costs can be more fairly shared among electricity ratepayers. Our mills have negotiated a compromise in that case with the Public Advocate, who represents residential and small commercial ratepayers, customer consultants, other industrial consumers and renewable electricity generators. We strongly urge the PUC to approve that compromise. We believe it clearly is in the public interest.
This case considers changes to the existing sharing of net energy billing costs, because some generators felt unfairly treated. The issue is how to divide some of the $180 million in NEB cost among Maine’s more than 800,000 ratepayers. If we all shared that equally, each of us, whether residential or large mill, would pay about $225 per year. While that might be fair since the PUC calls these costs climate mitigation others might say larger ratepayers should pay more. Right now, our members who are residential ratepayers of CMP pay $109 per year, the largest CMP ratepayers pay over $300,000 a year; some other Maine ratepayers pay $690,000 a year. That’s nearly 7,000 times as much. That’s both unfair and risky for Maine’s economy.
The compromise initiated by the Public Advocate changes the existing rate design to be more fair and less risky. To start, it reduces or eliminates the $109 cost for Maine’s 30,000 lowest income residential consumers. Next, it reallocates an additional $1.50 a month to residential ratepayers (a nickel a day) and $2.25 a month to commercial ratepayers (eight cents a day). It then modifies larger customer payments, so they pay “only” 3,000 times as much as does a residential ratepayer. This varies by utility and customer class, but the result is that no ratepayer is likely to be fatally harmed by the charge. The compromise, again at the urging of the Public Advocate, mitigates unfair disparities among smaller and larger commercial customers.
We respect the capabilities of the PUC. But we also believe that when a broad and diverse group of ratepayers served by the PUC works for months to resolve a highly complex and obviously difficult problem, that compromise should be respected and approved. These folks are the constituents of the PUC.
Their solution decreases existing unfairness and does so without further risk to our remaining large employers. In our increasingly divided society, Maine should welcome diverse interests resolving tough problems together. The PUC should honor and approve the compromise.