Community-Based Renewable Energy Production Incentive (Pilot Program)

Summary

In June 2009, Maine established the Community-Based Renewable Energy Pilot Program. As the name suggests, this program is intended to encourage the development of locally-owned, in-state renewable energy resources.

The Maine Public Utilities Commission (PUC) finalized the rules in February 2010. Legislation mandates that up to 50 megawatts (MW) of generating capacity (DC) will be permitted under the program, and individual participants may not exceed 10 MW. Of the 50 MW cap, 10 MW must be reserved specifically for small program participants (those with generating capacity less than 100 kW) or for participants located in the service territory of a cooperative transmission and distribution utility.

To be eligible for incentives, a generating facility must be at least 51% locally owned, use renewable energy resources (solar, wind, hydro, certain biomass, fuel cells, and tidal), be no larger than 10 MW in generating capacity, and be located in-state. Qualifying local owners include individuals, state and local government entities, federally recognized Indian tribes, nonprofit corporations organized under laws of the state, and business entities organized in the state with at least 51% local ownership. Furthermore, a community-based renewable energy project 100 kilowatts (kW) or greater must provide documentation of support from the municipality or tribe (if applicable) in which the project will be located. All projects must be grid-connected and put into service after September 1, 2009. Community-based renewable energy projects petition the PUC for certification and subsequent participation in the pilot program.

Program participants will have a choice of one of two following incentive options:

Long-Term Contracts

The PUC may require investor-owned utilities to enter into long-term contracts for energy, capacity resources, or renewable energy certificates (RECs) produced by the community-based project (participation by cooperative utilities is voluntary). The contract term may not exceed 20 years. The PUC will conduct long-term contract solicitations for "large generators" (1 MW or greater). For these generators, the average price within each contract year may not exceed $0.10/kWh, and it may not exceed the cost of the project plus a reasonable rate of return on the investment. The contract price for "small" solar, wind, and hydro generators (less than 1 MW) will be $0.10/kWh. These small generators will contact their utility directly and present their community-based certification, as well as the preferred contract terms. The utility will provide a standard contract (developed by the PUC, see Docket No. 2010-118 from March 2011) to the developer, and then submit a copy to the PUC.

After December 31, 2015, the PUC may not issue an order directing a utility to enter into a long-term contract under this program. All projects selected for a long-term contract must become operational and begin generating electricity by December 31, 2018.

Renewable Energy Credit Multiplier

The value of a community-based REC is 150% of the amount of the electricity. If the program participant chooses this incentive, the multiplier must be accounted for when the RECs are used to satisfy Maine's Renewable Portfolio Standard. The total net generating capacity of program participants receiving the credit multiplier incentive may not exceed 10 MW.

The Maine PUC issued its Report on Community-Based Renewable Energy Pilot Program evaluation of the program to the legislature in January 2011.

As of June 2015, 15 projects (plus one expansion to one of these 15 projects) totaling over 55 MW have been approved for this program (six wind projects, four anaerobic digester/biogas, three solar photovoltaic, one biomass, and one hydroelectric).