An oil truck makes a delivery Wednesday to a home in Yarmouth. C.N. Brown’s area cash price on Wednesday was $5.30 a gallon. Tux Turkel/Staff Writer
As Russia’s invasion of Ukraine sends already high energy prices into the stratosphere, Democrats in the Legislature are proposing a package of bills aimed at helping Mainers cope with skyrocketing energy bills now and in the future.
The bills include a mix of proposed assistance for both electric and heating costs, including:
• A draft proposal to establish a tax rebate program of $1,000 for certain residential electric customers and $2,500 for businesses with high energy use.
• A plan aimed at helping the Maine State Housing Authority and local officials speed up the processing of heating assistance applications.
• A related plan to establish a fund to hire temporary workers and purchase technology to reduce wait times for the low-income Home Energy Assistance Program.
• An effort to create a rate relief program for low-income Mainers and to set up a stakeholder group to explore long-term solutions to rate shock.
“Last week I held a town hall meeting in the heart of the St. John Valley,” said Senate President Troy Jackson, D-Aroostook. “The No. 1 issue that came up was the high cost of energy from electric to gas, oil and propane.”
That and similar encounters led Democrats to develop the relief plan, he said.
“Maine people expect solutions from their elected officials, not excuses or finger-pointing,” Jackson said.
It was unclear Wednesday how much of the plan will be supported by Republicans.
Sen. Trey Stewart, R-Aroostook, said Republicans agree with the sentiment expressed by Democrats, but he said lawmakers need to address rising energy costs with a long-term perspective.
“There’s no doubt families and businesses are under stress right now,” Stewart said. “And while we can throw all the money in the world at it, we’re just writing a blank check with no end in sight if we don’t solve the underlying problems.”
ENERGY PRICES BREAK RECORDS
The proposals come as the unfolding chaos in global energy markets linked to Russia’s invasion of Ukraine and the Biden administration’s move to ban Russian oil imports pushed petroleum prices to record levels, with Mainers waking to find overnight jumps that seem unreal.
Cash heating oil prices in southern Maine above $5.40 a gallon were common on Wednesday, with one dealer advertising $5.65 a gallon, according to the daily survey at MaineOil.com. Kerosene hit the $6-a-gallon mark. These prices represent spikes of 40 to 50 cents over two days.
On the last day of February, average heating oil prices in Maine were $3.86, according to the Governor’s Energy Office. On Monday, the statewide average was $4.73.
The situation is hardly better at the gasoline pump. The statewide average price for unleaded regular hit a record $4.26 a gallon Wednesday, according to AAA. It was $4.19 on Tuesday and $3.66 a week ago.
Until the war in Ukraine, Maine policymakers had been more focused on providing relief for rising electricity bills, spurred by a steep hike in the state’s standard offer supply rate that took effect in January.
The hike was blamed on the rising wholesale price of natural gas, used to generate half of New England’s power. It brought the supply rate paid by most Central Maine Power and Versant Power customers from roughly 6.4 cents per kilowatt-hour to 12 cents, adding nearly $30 per month to the bill of a household with a typical usage of 550 kilowatt-hours, the Maine Public Utilities Commission has said.
In late February, at the urging of Gov. Janet Mills and Maine’s Office of Public Advocate, the PUC approved a one-time, $90 bill credit for roughly 90,000 low-income customers of CMP and Versant. It’s being paid for by the Maine State Housing Authority using federal funds from the Home Energy Assistance Program, or HEAP, for low-income residents.
If there’s any consolation for electric customers, it’s that the standard offer rate is locked in for the rest of 2022. It doesn’t fluctuate daily, as do heating fuels and gasoline prices.
SEARCHING FOR SOLUTIONS
But this year’s electric rate shock has lawmakers looking for ways to cushion the blow.
The tax rebate program, presented by Jackson, is one response. The bill, L.D. 2010, remained in draft form on Wednesday and contained no details.
A bill presented by Senate Majority Leader Eloise Vitelli, D-Arrowsic, would direct the PUC to create an electric utility relief program for low-income residents by Nov. 1. The bill, L.D. 1913, would provide retroactive benefits for late fees, arrearages and other costs incurred this winter, as well as future benefits determined by the PUC.
The measure also would direct the Public Advocate’s Office to convene a stakeholder group by September that represents a broad array of interests, including the PUC, senior citizens, environmentalists and equal justice advocates. The group would identify methods for residents to better afford electricity as the state seeks to meet its renewable energy goals. It would seek ways to lower costs by reducing demand through weatherization and energy efficiency, as well as financial assistance programs.
The bill has had a public hearing and will have a work session in the Energy, Utilities and Technology Committee in the coming weeks.
On Tuesday, the Legislature’s Labor and Housing Committee held a public hearing on L.D. 2006, which would help eligible households in Maine access heating assistance from existing funds in MaineHousing’s HEAP program.
The bill, sponsored by Rep. Raegan LaRochelle, D-Augusta, directs MaineHousing to establish the HEAP Administrative Efficiency Fund and use state-provided money to improve application waiting and approval times by hiring temporary workers, purchasing technology or contracting with a third party. The funds also may be used to help establish a long-term system to efficiently process HEAP applications in future years.
“As a new legislator, one of the issues I’ve been hearing most about is the rapidly rising price of energy,” LaRochelle said. “My hope is that this bill can first help those in immediate need, and aid in the creation of a better system for those with a future need.”
The measure also directs MaineHousing to convene a working group to investigate ways to improve and increase the assistance program’s efficiency in the long term. The working group must include one or more individuals who have used the program.
Also in play is L.D. 1966, which directs MaineHousing and local program operators to process heating assistance applications online to speed relief. The bill received unanimous support Tuesday in the Labor and Housing Committee.
REPUBLICANS SEEK GAS TAX HOLIDAY
Outside of those efforts to cut electric and heating costs, Republican lawmakers have rallied around the idea a gas tax holiday, a temporary suspension of the state’s 30-cents-per-gallon levy. Rep. Lauren Libby, R-Auburn, submitted an emergency bill on Monday to pause the tax until year’s end. The concept also is being promoted by former Gov. Paul LePage, who’s running for re-election. He proposed cutting the tax at least in half until the start of the tourist season.
But a gas tax holiday is a nonstarter for businesses interests, the construction industry and the Maine Municipal Association. A nine-month gas tax holiday would cost the state highway fund $173 million, they note, sapping the major source of road and bridge repair in a state with crumbling infrastructure.
“As a former commissioner of MaineDOT, I also know that our businesses count on the annual maintenance and upkeep to our transportation infrastructure,” Dana Connors, president of the Maine State Chamber of Commerce, said in a statement. ” Our concern is that the revenue loss that would occur from suspending Maine’s gas tax would upend operations that Mainers expect, including the tremendous effort to maintain our roads during inclement weather, making this a safety issue.”
The chamber’s statement points out that a Mainer who drives 20,000 miles per year in a car that gets 25 miles per gallon would save roughly $20 per month during a state gas tax holiday.
Mills, who formally announced her re-election bid Tuesday, does not support the gas tax holiday. She has instead indicated her preference to send $750-per-person relief checks to Mainers, based on an idea initially suggested by Republicans.
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