A legislative committee struggled Tuesday to flesh out a bare-bones proposal to provide tax rebates to Maine households and small businesses slammed by high electric bills this winter, underscoring the limits of the state’s ability to ease the impacts brought on by global energy markets.

Members of the Taxation Committee heard testimony on a bill to establish a tax rebate program of “$1,000 for residential electric customers and $2,500 for businesses with high energy usage.” The bill, presented by Senate President Troy Jackson, D-Aroostook, was unusual in that it was a draft concept that contained few details. Hastily conceived, it reflected the frustration many lawmakers feel when desperate constituents call seeking help with energy bills that in some cases have doubled or tripled.

“Unfortunately,” Jackson conceded, “energy costs can’t be lowered overnight. There’s no silver bullet.”

But perhaps, he said, some of the surplus in Maine’s pending budget can be targeted for electric rate relief, even if it means delaying aid into next tax season.

Jackson’s proposal, L.D. 2010, was part of a package of bills introduced last week by Democrats in the Legislature aimed at helping Mainers cope with high energy bills now and in the future. They were drawn up in response to the record surge in gasoline and heating oil prices brought on in part by Russia’s invasion of Ukraine.

The jump in electricity rates, however, preceded the war in Ukraine. But taken together, the increases in household energy prices this winter are creating a crippling economic burden for many Mainers, and politicians are searching for ways to ease the strain.

But as the committee heard Tuesday, targeting relief is complicated.

The electricity increase is tied to a steep hike in the state’s standard offer supply rate that took effect in January. The majority of Mainers receive their electricity supply from the program, which is administered through an annual, competitive bid process at the Maine Public Utilities Commission.

The hike was blamed on the rising wholesale price of natural gas, which is used to generate half of New England’s power. For residential customers, 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 a bill with a typical monthly usage of 550 kilowatt-hours.

But the situation is different for so-called medium class businesses that use a lot of power, such as grocery stores with large refrigeration units. Their standard offer rates change monthly, and those rates soared when natural gas prices peaked over the winter. Stores in both CMP and Versant service areas paid roughly 22 cents per kWh in January and 21 cents in February. The rate fell to 13 cents this month, and will fall to 9 cents in April.

BUSINESSES FEAR CLOSURE

But for some who testified at Tuesday’s hearing, the damage is done.

Jerry Violette owns Jerry’s Food Store in the southern Aroostook County town of Island Falls.

“Despite our attempts to be conservative and implement energy-efficient resources, rising electricity costs have created unforeseen, exorbitant monthly bills,” Violette said in written testimony. “For this business personally, the monthly statement has more than doubled, an astronomical increase for an already four-digit invoice. In my most recent statement, the amount due increased over $5,000. Yes, $5,000. Quite honestly, I’m not sure how we will move forward.”

Violette said he didn’t see how he can absorb the cost but also was hesitant to pass it on to customers already struggling with inflation.

A similar plea came from Joe Benjamin, the owner of Belfast Variety on Route 52 in Belfast. He detailed how his power bill went from $1,584 in December to $2,624 in January. In February, it shot up to $3,483.

“Wow,” Benjamin wrote. “Not sure what I am going to be able to do, but without this being stopped we will be out of business.”

Jackson’s proposal in some ways complements a bill presented by Senate Majority Leader Eloise Vitelli, D-Arrowsic, that 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 state Public Advocate’s Office to convene by September a stakeholder group 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.

At Tuesday’s hearing, one committee member suggested Jackson’s relief proposal might somehow be combined with Vitelli’s effort. Jackson said he’d spoken to Vitelli, but he questioned whether the timing of that relief program would further delay what he’s tying to accomplish.

NO CONSENSUS ON SOLUTIONS

One takeaway from the hearing is that Gov. Janet Mills isn’t ready to endorse the tax credit concept.

While not taking a position on the bill, Michael Allen, associate commissioner for tax policy in the Department of Administrative and Financial Services, outlined elements in the governor’s budget proposal that include one-time disaster relief payments to eligible Maine taxpayers and the intention to raise the amount to $750. If approved by the Legislature, those checks could be mailed this summer, Allen said.

The $750 checks would build on the $285 disaster relief payments previously made to more than half a million Maine people, he said, along with additional property tax relief and an increase in the Earned Income Tax Credit.

Allen also noted that the Maine Department of Health and Human Services is delivering additional help for low-income families. Nearly 13,000 households, with roughly 42,000 people, have received a one-time heating assistance payment of $800, he said. And last month, the PUC approved a one-time utility bill credit of $90 for low-income Maine households. It will provide a total of $8 million dollars to 90,000 Maine households served by CMP and Versant. Credits have begun arriving this month.

But whether the state could do more, and how to define eligibility, was a sticking point for Rep. Bruce Bickford, R-Auburn. Noting the easing of electric rates for businesses, he wondered what benchmark to use for high electric use.

“How do we determine what is an extreme?” he asked.

He also expressed frustration with Jackson’s presentation of a draft concept legislation, with no details.

“Basically,” Bickford said, “you’re asking us to write a bill.”

Jackson agreed that defining need was the crux of the problem. But he pledged to draft more specific language for the committee to consider in a coming work session.

Left undecided is whether anything can be done to provide near-term relief, with the 2021 tax filing deadline a month away. Other open questions included how to reach middle-income Mainers who don’t qualify for low-income programs, including those who lack tax liability, and whether some form of credit could be applied retroactively.

Beyond electric rates, a retreat in global crude oil prices offered some hope that gasoline and heating fuel prices have reached a peak, at least for the moment.

The national average price for regular gasoline slid a penny on Tuesday to $4.32 a gallon, according to AAA. That drop was reflected in Maine’s average price of $4.25 on Tuesday.

Cash heating oil prices in Greater Portland were averaging $4.98 a gallon on Tuesday, according to the daily survey at MaineOil.com. The highest price was $5.40 – no dealer was advertising $5.65, which was observed just under a week ago after prices shot up 50 cents in two days.

In a related development, Summit Natural Gas said Tuesday that it will offer a 28 percent discount in facility and distribution charges for certain low-income customers. Beginning April 1, Summit customers receiving state or federal low-income home energy assistance will be automatically enrolled in the program and will see it reflected as a credit on future bills.

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