State of Maine's Environment 2007
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An Environmental Assessment  

The State of Energy in Maine 2007


Joel Alex, Jeff Carroll, and Jake Pinkston


Executive Summary


The State of Energy in Maine, the first of fours chapters in The State of Maine’s Environment 2007, focuses on the state of Maine’s energy policy and its relation to the environment. We characterize historical trends in non-renewable and renewable energy consumption, and we identify and describe the significant laws, institutions, and actors that influence Maine’s energy policy.  Climate change is currently one of the most prominent environmental energy concerns. Our study evaluates carbon emissions in Maine and consumer-side policy options for CO2 reduction.  

Our analysis shows that non-renewable energies account for the largest proportion of Maine’s energy consumption. Natural gas is the cleanest option and is currently the largest source of electricity in the state. For home heating however, Maine’s reliance on oil is high. In order for natural gas to supply a greater proportion in this sector, the gas supply and pipeline infrastructure must increase. Renewable energy consumption is rising in Maine, although significant infrastructure and policy obstacles must be overcome before it can be widely accepted and implemented.  Wind power shows the greatest potential for future renewable energy resources in Maine.  Maine should continue pursuing reductions in CO2 emissions.  This can be accomplished by increasing the state’s Renewable Portfolio Standard to a more challenging level and boosting the underdeveloped market demand for “green energy products”.  Energy efficiency is another strategy for lowering CO2 emissions and is beginning to be successfully promoted in Maine.

We identify three possible scenarios for energy in Maine: the ineffective status quo, a successful implementation of current policies, and finally, an increase in policies promoting renewable energies.  We recommend that in the near term natural gas be used as a transition fuel, but in the long term the state should promote the utilization of its renewable energy resources through state incentives. This, in addition to the promotion of green energy products and increased energy efficiency, would help Maine lower its CO2 emissions in its efforts to mitigate climate change.




            The State of Energy in Maine is changing due to internal and external pressures. As Maine updates and expands its infrastructure to meet growing demand, it faces important decisions concerning the future sources of its energy. Energy deregulation, integrated regional infrastructures, and changes in federal policy mean that Maine’s supply choices are and will increasingly be made out of state1. For example, Maine’s current energy portfolio includes petroleum from the Middle East, natural gas from the Caribbean, and hydroelectric power from neighboring Canadian provinces.

            Globally, concern about climate change has become a central issue driving changing patterns of energy production and consumption. Today, 80% of the world’s energy needs are met by the combustion of fossil fuels2. This combustion releases 25 billion tons of carbon dioxide (CO2) annually into the atmosphere.   This poses a considerable threat to the environment; CO2 is the major greenhouse gas contributing to current human induced climate change3. Maine’s electricity industry produces 15 million metric tons of CO2 emissions annually, and in response, the state has begun to take serious steps to mitigate its CO2 emissions.

            In this study we asked: How has energy production and consumption in Maine changed over time? Is Maine making progress towards climate change mitigation? How might Maine’s energy consumption patterns change in the future? What policies are available that could positively influence these trends?  We address these questions by focusing on consumption trends of non-renewable and renewable resources over the past half century. We begin by identifying the events which have shaped these trends, and discuss their possible implications for Maine’s energy future. We also identify the laws, institutions, and actors that influence each individual energy source as well as the larger pattern of energy consumption in Maine.

            We focus primarily on the electricity and home heating sectors, which account for approximately 80%4of Maine’s energy consumption.  Energy used for transportation is also important, and accounts for roughly 20%4of Maine’s total energy use, but it is not the primary focus of this paper.  We compare Maine’s CO2 emissions to regional and national emissions.  Finally, we explore the potential role of Maine energy consumers to influence climate change mitigation efforts through the purchase ‘green’ power and by increasing energy efficiency. 

We conclude by presenting three scenarios for Maine’s energy future, and discuss how different political climates and policies could influence these distinct scenarios.

Non-renewable Resources

Trends and Current Status

Historical Consumption Trends and Current Status

            The vast majority of the energy consumed in the United States comes from non-renewable sources. For the past 50 years, is has equaled about 94% of the country’s energy consumption (Figure 1.1). In New England, it is a smaller but still significant share, accounting for 82% of energy consumed (Figure 1.2). Maine has a lower dependence on non-renewable energy, with 32% of its energy coming from sources other than fossil fuel and nuclear (Figure 1.3). To further understand these domestic trends, we describe consumption by type of fuel used.


            The use of coal in the US propelled the Industrial Revolution in the 19th century, but dropped precipitously in the early to mid-1900s with the ascent of petroleum as the nations leading energy source (Figure 1.1).  However, coal has remained the leader in the electricity sector, consistently producing at least 50% of the electrical power America consumes for the last 50 years (Figure 1.6).  It is the country’s most abundant and inexpensive hydrocarbon resource5.

Figure 1.1  US energy consumption by source from 1950 to 2006 (%)6


            New England and Maine are a stark contrast to the rest of the nation, both consuming on average less than 10% of their energy from coal in the past half century (Figure 1.2 & Figure 1.3). This trend is a reflection of the lack of in-state sources and the proximity to out of state coal mines. The messy nature and high bulk-to-energy output ratio coal compared to other fossil fuels has likely dissuaded use as well5. In the 1990s, Maine began consuming electricity from coal fired power plants, but this is generated outside the state (Figure 1.8). There is currently a proposal by Point East / Twin Rivers to build a coal gasification plant in Wiscasset on the site of the now decommissioned Maine Yankee Nuclear Power Plant. Local support is thin however, and considering that initial zoning approval was recently voted down in the November 2007 election referendum, it is unlikely to occur7.


Figure 1.2  New England Average Energy Consumption by Source from 1960 to 2006 (%)6



            Of all non-renewable resources, petroleum is the most versatile. Countless fuel and non-fuel products are derived from petroleum. As a result, it is consumed twice as much as its nearest competitor nationally and regionally. This has been the trend for the last five decades since it overtook coal as the nations most consumed energy source in 1949 (Figure 1.1). Consumption in the US has since tripled, and that steep rise shows no sign of slowing, even with decelerating production6.


Figure 1.3  Maine Energy Consumption by Source from 1960 to 2006 (%)6        


            Home heating oil replaced coal in the 1920s as a cleaner, less work intensive, and more efficient alternative fuel. It is part of the distillate fuel family, similar in properties to diesel fuel. While only 9% of Americans use fuel oil to heat their homes, 55% of New England households use the distillate fuel8. The state of Maine leads the country with 80% of its households burning fuel oil8.

In New England and especially in Maine, fuel oil has been the major source for home heating because of the cold winters, its ease of transportation and storage, and a lack of access to natural gas pipelines. Because of fuel oil’s low national demand, production is not always consistent, especially in the summer months when overall consumption is low. This can cause supply to run low, especially during the winter months, resulting in price spikes and shortages. Maine’s high demand for fuel oil puts it especially at risk, but strategic reserves and prepay programs, which lock in the price before winter starts, have been created to respond to this concern9. 

Petroleum is also used to generate electricity, although not on a large scale in the United States. The power plants burn what is known as petroleum residuum, the heaviest product from the refining process that has no other real use10. While it made up about an eighth of US consumption in the early 1980s, petroleum generated electricity has since fallen off to under 2% (Figure 1.6). This trend will likely continue with the rise of oil prices.

In New England and Maine, petroleum has played a much larger role in the electricity sector. New England’s consumption rose sharply to over 70% from 1965 to 1973 as coal use fell. Use has declined since then, congruent to national trends (Figure 1.7). During the 1960s, electricity consumed from petroleum in Maine peaked at 65% but dropped off drastically after the opening of Maine Yankee Nuclear Power Plant (Figure 1.8). The largest capacity power plant in Maine, the William F. Wyman in Yarmouth, runs on petroleum and has a net summer capacity of over 800 MW11. Petroleum electricity made a resurgence to fill the electricity void left after the closing of Maine Yankee, climbing to over 35% of the state’s electricity consumption, but decreased rapidly after the year 2000. It now accounts for only 5% of the state’s total consumption of electricity (Figure 1.5).

Natural Gas

            While natural gas was used at a small scale as early as 1816 for street lighting12, it was not until after World War II that advances in metallurgy and construction technology allowed for commercial development13. Its use in the US grew significantly through the 1960s, peaking at a 33% of all domestic energy consumption (Figure 1.1). This led to investment in expanding infrastructure. Price irregularities and a number of gas shortages due to in part to overregulation led to a decline in consumption in the next few decades (Figure 1.4). This fall has stabilized in recent years with gradual deregulation of the industry10. Natural gas is the preferred fuel for home heating, utilized by 51% of US households8. It represents a significant source of electricity production, accounting for nearly 20% of the nation’s consumption (Figure 1.6).

Figure 1.4  US Energy Prices in Nominal Dollars from 1970 to 20066


New England’s consumption of natural gas has been comparatively lower for most of the 20th century. It rose noticeably in the late 1980s as pipelines began connecting parts of the region to production facilities in the southern US and Canada (Figure 1.5). 37% of the households in New England use natural gas for home heating, well below the nation average.

Maine entered the natural gas market much later than the rest of the nation, consuming almost no natural gas before the new millennium (Figure 1.3). In 1999, the Portland Natural Gas Transmission System, which connects from the New Hampshire border, and the Maritimes & Northeast Pipeline, which enters from the New Brunswick boarder, brought Maine into the North American Natural Gas Pipeline Network14, 15. In 2000, five new electrical generation plants went online, and natural gas became the states most consumed source of electricity in Maine, maxing out at 57% of total electricity consumption (Figure 1.8). High prices in a volatile gas market, however, have resulted in a recent drop in consumption (Figure 1.5). It is currently holding at 42%.

Figure 1.5  Maine Energy Prices in Nominal Dollars from 1970 to 20066


As a source for home heating, natural gas is used by only 4% of Maine households6, due to its new status, high cost to change system, and limited infrastructure access within the state16. Multiple requests to build Liquefied Natural Gas Terminals along the coast of Maine have been submitted to the Federal Energy Regulatory Commission. State license requests have also been submitted, most notably by Quoddy Bay LNG and Downeast LNG, who are planning to build facilities in the towns of Pleasant Point and Perry, and Robbinson, Maine respectively. This has been the source of contentious debate as communities weigh environmental and security concerns against the need for economic development17.


            In the period after the end World War II, the United States developed plans for civilian nuclear power. In 1957, the Shippingport Nuclear Power Plant went online in Pennsylvania, the first of over 100 large-scale commercial nuclear power plants that would be built in the United States over the next 30 years18. US consumption of electricity from nuclear power jumped from 1% in 1968 to 13% in 1977, then grew more gradually before leveling out around 20% from the early 1980s onward (Figure 1.6).

Figure 1.6 US Electricity Consumption by Source from 1950 to 2006 (%)6


New England’s first nuclear plant was built in 1960 on the Deerfield River in Rowe, Massachusetts, and consumption of nuclear power increased rapidly for the next 15 years as more plants came online in the region. Nuclear power has contributed about 30% of New England’s electricity since then (See Figure 7). In 1972, Maine built its own nuclear power plant, Maine Yankee, in Wiscasset19. Maine Yankee dramatically changed the face of the state’s electricity production, supplying over 60% of the state’s electricity within three years of opening (Figure 1.8).

However, the nationwide flurry of proposals and orders for new plants ceased after a partial meltdown at the Three Mile Island Nuclear Power Plant in 1979 18. Fears of nuclear power’s dangers were confirmed a decade later when the Chernobyl disaster devastated the Ukraine.

Figure 1.7  New England Average Electricity Consumption by Source from 1960 to 2006 (%)6


Maine nuclear power was also facing a crisis during this period. In response to the apparent dangers, public referenda were introduced to close Maine Yankee in 1980, 1982, and 198720, but were defeated. Poor maintenance of the facility resulted in the cracking of the plant’s steam generator pipes, forcing the plant to close for repairs in 199521. Although it reopened in 1996, the plant was closed permanently in 1997 because the state’s deregulation of the electric utilities, which began that year, would have made the plant uneconomical to run. Consumption of nuclear electricity in Maine fell to zero (Figure 1.8). In 2005, decommissioning was completed and the site is now looking at proposals for development. However, the spent fuel rods from the reactor still remain on the premises in dry casks, awaiting removal by the US Department of Energy to a yet to be determined nuclear waste dump19.  In March of 2007, the Maine legislature passed LD 1851, Item 7, which established the Maine Nuclear Power Council. The purpose of the council is to investigate the need for carbon-free substitutes for power generation, opening up the possibility of a new nuclear facility in Maine’s future22.

Figure 1.8  Maine Electricity Consumption by Source (%)6



            There are several key stakeholders involved in Maine’s non-renewable energy policy.  These include federal and state government actors, the regional transmission organization (RTO), power and fuel oil companies, special interest groups, and Maine energy consumers.


            Several federal departments and agencies are responsible for developing and implementing US energy policy, which impacts energy policy in Maine. They are given their mandate and direction by either the President or the Congress through the subcommittees in the two house’s respective Committees on Energy (Table 1.1).  The Federal Energy Regulatory Commission (FERC) regulates the interstate transmission of electricity, natural gas, and oil. It played an important role in the deregulation of Maine’s utilities and the extension of natural gas pipelines into Maine. The construction and decommission of the Maine Yankee Nuclear Power plant was done under the regulations and oversight of Nuclear Regulatory Commission (NRC). Maine is currently negotiating with the Department of Energy over the remaining spent fuel rods that remain at the Wiscasset site, which the DOE was contracted to remove a decade ago. The Energy Information Administration (EIA) compiles national and state energy data, which are cited in many Maine legislative proposals. The EPA regulates emissions under the Clean Air and Clean Water Acts and dictates where new facilities such as power plants can be cited.


Table 1.1 Description of Federal Government Actors in Non-Renewable Energy



President of the United States

Forms groups cabinet groups to develop initiatives concerning national energy policy direction. These have recently included the National Energy Policy Development (NEPD) Group and the Advanced Energy Initiative


House Energy Subcommittee on Energy and Air Quality

Oversees national energy policy generally, including: non-renewable and renewable energy; energy conservation; information; regulation and utilization; interstate energy compacts; nuclear energy and waste; and The Clean Air Act.


Senate Energy and Natural Resources Subcommittee on Energy

Oversees and legislates non-renewable and renewable, non-water sources of energy, climate change; utility policy; strategic petroleum reserves; oil and gas pipeline transportation systems within Alaska; energy production, refining, distribution, regulation, research, development and conservation.


Senate Energy and Natural Resources Subcommittee on Water and Power

Oversees and legislates power marketing administrations; energy development impacts on water resources; groundwater resources and management; hydroelectric power; low head hydro; and energy related aspects of deepwater ports.


Department of Energy (DOE)

A cabinet level department that sets energy policy, funds research and is in charge of nuclear safety.

Federal Energy Regulatory Commission


An independent agency under the DOE that regulates the interstate transmission of electricity, natural gas, and oil. It also regulates natural gas and hydropower construction.


Energy Information Administration


The statistical agency of the DOE, it provides policy-independent data, projections, and analyses to promote public understanding, solid markets, and good policy making.


Nuclear Regulatory Commission


An independent agency that regulates commercial nuclear power plants and other uses of nuclear materials (nuclear medicine), through licensing, inspection and enforcement of its requirements.


Environmental Protection Agency


Non-cabinet agency charge to protect human health and the environment through development and enforcement of policy, funding grants, education, and research.


            At the state level, Maine’s energy policy is organized around the Energy Resources Council, which was created in 2002 by the Maine Legislature to facilitate coordination among agencies with regard to energy policy making. The Council is made up of nine agencies (Table 1.2). Their decision making is done according the 10 Principals of Maine Energy Policy, which they drafted when the Council was founded. The 10 Principals promote values of competitive pricing, security, reliability, environmental protection, and public information in regards to energy policy in the state of Maine23. The Maine Public Utilities Commission (MPUC) has the most hands-on role of the Committee in executing policy, regulating the electrical, natural gas, telephone, water, and ferry services24. The Public Advocate represents the interest of the ratepayers under the MPUC, posting recommendations concerning utilities policy and filing complaints. These two agencies’ work is coordinated through the governor’s office and the state legislature’s Joint Standing Committee on Utilities and Energy.

Table 1.2  Description of Maine State Actors in Non-Renewable Energy25



Governor of Maine

As head of his administration, works to direct and promote energy policy initiatives for the state and meets with other governors to cooperate in regional projects.


Joint Subcommittee on Utilities and Energy

Committee of three senators and ten representatives that oversees state energy policy, including: energy resources and efficiency; electric industry; natural gas industry; Public Utilities Commission; Office of the Public Advocate; and Energy Resources Council.


Maine Public Utilities Commission

Regulates electricity, gas, telecommunications, water, and ferries in the state. Three appointed members charged with overseeing the operations of utilities and  reporting violations to the attorney general


Public Advocate

Represents Maine utility consumers in issues under the jurisdiction of the MPUC, promoting affordable, quality energy.


The Commissioner of Environmental Protection

Head of Maine Department of Environmental Protection. The department is mandated to prevent, abate and control pollution while preserving, improving and preventing diminution of the state’s natural environment.


The Commissioner for Transportation

Head of Department of Transportation, which oversees the construction, repair, safety, and usage of Maine’s roads.


Commissioner of Administrative and Financial Services

Head of Administrative and Financial Services, which performs a host of fiscal, administrative, training, maintenance, IT, and postal services while overseeing the state lottery and alcohol tax.


Commissioner of Economic & Community Development

Head of the Department of Economic & Community Development, which is the umbrella organization to the offices of Tourism, Business Development, the International Trade Center, Community Development, Film and Innovation and Science.


Commissioner of Conservation

Head of Department of Conservation, a natural resource agency that oversees the management, development and protection of forestland, unorganized territories, parks, historic sites and public reserved land.


Director of the Maine State Housing Authority

Head of Maine State Housing Authority, which bridges public and private financing to assist Mainers in obtaining and maintaining decent, safe, affordable housing, targeting low to middle income families.


Director of  Main State Planning Office (Chair)

Head of the State Planning Office, which advices the governor, state legislature, regional and local entities on development through research and technical expertise.

Regional Transmission Organizations     

            The regional transmission organization, Independent System Operator - New England (ISO-NE), operates the region’s bulk electric power system, controlling generation and flow of electricity across high voltage interstate transmission lines. Originally established as the New England Power Pool (NEPool), the central dispatch station of the region, deregulation policies in the mid-1990s expanded its role to managing the newly created power markets and the bulk electric power being bought, sold and traded26. Many Mainers are currently unhappy with the current system. The Maine legislature commissioned a report that was given to the Utilities and Energy Committee in 2007, which investigated perceived transmission, generation and price inequities within the current structure. It also examined and concluded favorably on the proposal to leave ISO-NE and develop a power market with one or more of the Canadian Maritime Provinces, establishing a new RTO. One of the most substantial arguments for such a move is it would increase efficiency and balance within the grid in both regions because peak load occurs in the winter in the Canadian provinces and in the summer in Maine26. ISO-NE is discouraging the withdrawal, and there are several barriers and questions to be answered because of the international nature of the cooperative, such as the implications of NAFTA rules27.

Companies – Power and Oil  

            The power companies in Maine are split between suppliers and distributors, which was required by deregulation in the late 1990s. The suppliers produce and sell energy to the distributors, who deliver it to the costumers and are required to maintain the electricity infrastructure. Supply is competitive but distribution remains a monopoly, with service divided into regions24. There are three main distributors: Bangor Hydro-Electric Co., Maine Central Power, and Maine Public Service Co. There are a variety of suppliers, the largest including Florida Power and Light, Constellation, Dominion and TransCanada24.

            The fuel oil suppliers tend to be small, family businesses that buy from larger suppliers and deliver the fuel oil by tanker. Fifty Maine fuel oil businesses advertise on the, and many are members of the Maine Oil Dealers Association, which advocates for its 450 members and promotes the petroleum industry28.

Interest Groups

            Interest groups also play a role in Maine’s energy policy. Through grassroots lobbying, political action committees, education campaigns, and media events, these groups have made their views known about how Maine should frame its energy policy, especially concerning nonrenewable sources and the environment. They represent a broad spectrum of positions and politics, including industry groups (Maine Petroleum Association, the Maine Oil Dealers Association), law firms (Pierce Atwood, LLP), economic promoters (the Chamber of Commerce), and environmental groups (Natural Resources Council of Maine, Environment Maine). Interest groups have been particularly active in regards to the LNG proposals along Maine’s coast, advocating strongly on both sides of the argument.

Maine Consumers        

            The consumer is a very important stakeholder, especially now that they have a choice in what energy they buy. This is discussed in greater detail in the later in this section.

Laws, Institutions and Management

            Laws, institutions and management play a key roll in framing Maine’s energy policy with respect to non-renewable sources. We will distinguish them by Federal (Table 1.3) or State (Table 1.4) levels.


            The federal government has taken an active role in regulating non-renewable energy since it passed the Public Utility Holding Company Act in 1935, effectively breaking up large energy conglomerates that were poorly managing the country’s energy and overcharging their customers. As natural gas became economically viable, Congress began regulating it as well. The development of civilian nuclear power was spurred by the federal initiatives. While initially the countries energy policy was rather restrictive, subsequent legislation aimed to open up the energy industry and encourage more energy development. However, the federal government has still maintained a strong oversight power, a source of conflict with the states29.

            The Price-Anderson Act in 1957 reduced the liability of nuclear power producers in the event of a nuclear accident, which in part led to a rapid expansion in nuclear plant requests and construction during the next two decades18.  Eager to respond to the oil crises of the 1970s, Congress passed the 1978 National Energy Act, which carried with it five different sections.13 The most important to non-renewable energy were the Natural Gas Policy Act and the Public Utility Regulatory Policies Act (PURPA). The Natural Gas Policy Act gave FERC authority over inter- and intrastate gas production and established price ceilings to keep the fossil fuel affordable with the goal of expanding consumption30. PURPA required electric utilities to increase their conservation and efficiency while providing equitable rates for consumers. It was instrumental in breaking the monopoly that the large utilities had on the power grid and paved the way for the expansion of renewable energy, which will be discussed later in this chapter 26.

            These new players in the market were further encouraged by the passing of the 1992 Energy Policy Act. The act created a new category of electric producer, the exempt wholesaler, further opening up development of non-utility electrical generation.31 The subsequent FERC Order 888, in an attempt to reduce consumer costs, required that the wholesale transmission of electric energy be unbundled from the sale of power, essentially separating the power lines and the power plant. This initiated the nationwide deregulation of utilities that Maine took part in. The year 2000 marked the creation of the Northeast Fuel Reserve to guard against shortages in the event of an unexpectedly harsh winters, an important piece of legislation for the state that consumes more fuel oil than any other32. 

            The latest major piece of federal energy legislation concerning non-renewable resources is the Energy Policy Act of 2005. It is heavily supportive of fossil fuels, allocating a large amount of funds to oil and gas exploration and production, coal technology, and nuclear expansion. It also empowers FERC with even greater oversight capabilities, a reflection of the recent disaster with the California utilities.  Controversially, the act revokes PUHCA, with the hope that it will open utilities to much needed investment and encourage expansion of infrastructure33. There are current proposals in the Maine legislature revoke similar state laws. However, any new mergers will have to be monitored lest there is a regression back to the oversized, poorly run utilities of the past34.


Table 1.3  Description of Federal Laws and Statutes Relevant to Non-Renewable Energy




Public Utility Holding Company Act



Broke up large, corrupt PUHC trusts that controlled the electric industry, giving what would be FERC regulatory control over them and requiring transparency and complete focus on utilities, pushing out non-utilities from the market.


Natural Gas Act


Gives FERC authority to set rates for transmission of natural gas in interstate commerce. FERC may give permits for companies to charges customers for some of costs of building pipelines.


Atomic Energy Act


Establishes Atomic Energy Commission to control nuclear energy development (Powers expanded in 1954)


Price-Anderson Act


Provides system which significantly reduces liability in the event of a nuclear accident.


National Energy Act





Passed after OPEC oil crisis. Contains PURPA, the Energy Tax Act, the Nation Energy Conservation Policy Act, the Power plant and Industrial Fuel Act, and the Natural Gas Policy Act. 


Public Utility Regulatory Policies Act (PURPA)


Requires increased conservation/efficiency by electric utilities with equitable rates, improved whole sale distribution and reliability of electricity and increased hydropower. Utilities must interconnect and buy whatever amount and capacity is offered by qualified facilities.


Natural Gas Policy Act


FERC has authority over inter and intra state gas production. Established price ceilings with eventual phase out, which resulted initially in shortages farther from the source and later extremely high prices.

Natural Gas Wellhead Decontrol Act


Removed all price ceilings, although effect minimal as most prices below ceiling at this point.



Energy Policy Act (EPACT)


Creates new category of electric producer, the exempt wholesaler, further opening up development of non-utility electrical generation.


FERC Order 888


Requires wholesale transmission of electric energy be unbundled from the sale of power.


Energy Policy and Conservation Act


Established Northeast Home Heating Oil Reserve.

Energy Policy Act of 2005


Mandates cleaner coal use, increased oil and production, technological development improving extraction of oil and in finding ways to use coal to replace oil, encourage nuclear energy expansion. FERC is given expanded authority it to prevent abuses. Streamline PUHCA to open up utilities to investment and encourage expansion of infrastructure.



            Maine’s recent legislative initiatives have been focused on moving away from non-renewable resources34. This trend is largely due to concerns over climate change and energy security but would not be possible without deregulation. The deregulation of Maine’s utilities, which required the power companies to sell off their generation assets so that consumers could buy competitively priced energy, began in 1996 with the goal of retail competition by March of 2000. In 1997 the plan went on the legislation docket. The three major power companies submitted plans for divesting, which were then approved by the PUC. New itemized billing systems separated generation and delivery costs. The standard service price would be set by bidding, rather than the typical predetermined command price. This failed in the first round because the prices were too high. While prices initially rose after deregulation, they have since fell to below previous rates, although Maine continues to have some of the highest energy costs in the country12.

The legislation that Maine has enacted with respect to non-renewable fuel has focused primarily on protecting Mainers (See Table 4). In the pursuit lowering consumer costs, the Legislature has passed a resolve in 2007 that the Maine Public Utilities Commission should promote the use of “smart meters,” which will charge different electric rates depending on the time of day, and report their findings. They have also empowered the MPUC to enter into long term contracts with transmitters and distributors, thus preventing unfavorable regional capacity requirements, which could increase prices for Maine consumers. The state Senate and House of Representative have funded programs to subsidize low income and elderly heating costs across the state as well35.






Table 1.4  Description of Maine State Laws and Statutes Relevant to Non-renewable Energy




An Act to Restructure the State's Electric Industry

H.P. 1274 - L.D. 1804


To provide effective competition in the generation and sale electricity market, each investor-owned electric utility must divest all generation assets and business activities, thus creating a competitive generation market while retaining a monopolistic transmission system. 


Resolve, To Reduce Energy Costs for Consumers

H.P. 948  - L.D. 1339


MPUC will promote the use of smart meters and report back by January 2008 to the Joint Subcommittee on Utilities and Energy, who may then propose legislation.

An Act To Ensure That Maine Residents Have Reliable Winter Heating Assistance

H.P. 385 - L.D. 502


Appropriates $17 million per year in fiscal year 2007-08 and 2008-09 to the Maine State Housing Authority for the Low Income Home Energy Assistance Program,


Renewable Resources

Trends and Current Status


             The United States suffered two severe shortages of oil imports in 1973 and 1979.  The Organization of Petroleum Exporting Countries (OPEC) restricted oil supplies in 1973 to states which supported Israel in the Yom Kippur War, the result of which drove the price of oil to a point where people felt a considerable strain. In addition to the expensive prices posing a problem for consumers, many politicians felt that relying on foreign imports of fossil fuels posed a considerable national security threat. This movement developed the beginning of renewable resource use for energy production in the US. After the OPEC oil embargo was lifted in spring 1974, the pressure to research and implement renewable resources was lessened. Again in 1979 towards the end of President Carter’s administration the Shah of Iran was overthrown temporarily disrupting the oil industry causing oil prices to increase significantly once again. The Iranian infrastructure eventually increased, bringing more oil into the US when the prices receded in 1979, once again slowing the development of renewable resources. However, in the 1980s and 1990s, that drive regained momentum when it was determined that renewable sources were not as detrimental to the environment as were fossil fuels. This change in perception can be attributed to a shift in national consciousness of the environmental damage being caused by humans.

            Renewable energy is derived from harnessing sources naturally occurring on Earth. They are either used to directly heat, or to generate electricity. This study focuses on the following renewable energy sources: hydroelectric, biofuels, solar, wind, and geothermal. Other sources of renewable energy exist, however, these five represent the major components of the current alternative fuel market both nationally and in Maine.

            While it is possible to tie both the development and rapid expansion of most renewable sources of energy to the OPEC  embargos of 1973 and the elevated prices of 1979, hydroelectric power has been used in the US, and Maine, in particular well before the use of fossil fuels. Currently there are 88 hydroelectric dams in Maine, which produce roughly 22% of the state’s energy production8, yet accounts for only about 14% of Maine’s total energy consumption36.

Biofuels are the other major renewable energy which played a significant role in Maine energy before the birth of the renewable resource movement. “Biofuels” is a catchall term for every type of fuel which is non-fossil derived and is burned to produce energy to turn turbines or produce heat energy. They have a considerable impact on Maine’s energy use because Maine has such a natural abundance of wood products: 90% of the state is forested land37. Traditionally, biofuels have been wood fuel; however, since the 1980s, other products have been developed which fall into three broad categories: wood, waste, and alcohol fuels38.  Biomass is a significant portion of Maine’s renewable energy use however, it is difficult to regulate what is being used as fuel. For this reason, we will not put forth in this report any recommendations on biofuel usage, but focus on other technologies.

Wind power is a rapidly growing sector of Maine’s energy production and was the quickest growing renewable energy source in the United States, rising from 2.8 billion kWh in 1990 to 10.7 billion kWh in 2003, a 282% increase39. There is currently only one large scale wind project in Maine, but Maine is slated to increase the amount of energy produced by wind power significantly by 2010. Wind is a compelling source of energy because it has zero carbon emissions. Compared to conventional fuel sources, as well as some renewables, wind-derived energy is vastly cheaper because the majority of costs are associated with the installation process, and once that is completed the energy sold is essentially free. There are however, some concerns associated with wind power. Wind is an intermittent energy source because the wind does not always blow steadily. Wind turbines are loud and have disturbed local residents, which is why they should be placed out of hearing range. In addition, they are quite large and many feel that they are not aesthetically pleasing. They should be located in an area in which they do not obstruct the view of a landscape.

 Solar energy is another new sector of renewable resources which plays an important role in the state of Maine. It is broken up into two major sectors: solar thermal heating, and solar electric. Solar thermal heating systems use sunlight to heat air or water to provide internal heating for houses, while solar electric systems convert sunlight directly to electricity. One method of solar electric uses photovoltaic (PV) systems. These systems can provide electricity for residential and industrial buildings, but can also be used on a much larger scale to produce electricity for regional and national distribution.

Lastly, geothermal heating involves tapping into the natural heat of the earth to provide heating for houses. Geothermal energy is harnessed by using ground source heating pumps to tap into the ground. These pumps provide a double service for Maine’s heating needs. First, they provide a constant source of heating during the winter when Maine uses a significant amount of energy in heat production40. Second, quite recently Maine has become a summer peaking state41 reversing the historical trend. That is to say currently, residents of Maine are using more energy in the summer than in the winter to cool their homes and other summer related activities41. Geothermal energy is perfectly situated to deal with this shift in demand because it can provide cool air during the summer. The temperature of the air brought up from the ground remains at a fairly constant temperature all year long, providing heat during the winter and cooling during the summer40.  Geothermal is used on a very small scale in Maine, but has the potential to become a larger source of energy for the state


Nationally, renewable resource consumption has steadily increased over the past half century. In 1960, national consumption of all renewable energy sources was approximately 3,000 trillion British Thermal Units (Btu), roughly 6%4 of national consumption, and has since reached 6,000 trillion Btu, doubling in size, yet remaining only 6% of national consumption4 (Figure 1.9). This is important because while it demonstrates that more and more renewable resources are being used nationally, the proportion of renewable energy relative to total consumption of all energy sources is remaining constant.

            New England has mirrored the national trend. From a baseline 1960 value of roughly 150 trillion Btu, energy consumption peaked in 1995 at roughly 400 trillion Btu and has dipped back down to roughly 325 trillion Btu (Figure 1.9).


Figure 1.9  Total National, New England, and Maine Renewable Energy Consumption from 1960 to 200436


Maine’s renewable energy consumption over the past half century has also mirrored national and regional trends. Maine consumed about 50 trillion Btu of renewable energy in 1960, increasing to 150 trillion Btu in 1990 (Figure 1.10). As of 2004 Maine consumes almost 155 trillion Btu of renewable energy36.

Figure 1.10  Maine Renewable Energy Consumed by Source from 1960 to 200436



Increasing Renewable Use: Portfolio Standards

            Maine has signed onto the Regional Greenhouse Gas Initiative (RGGI), and has stipulated a plan to complete the emissions standards set out in RGGI. RGGI established specific regulations on states in New England with the purpose of controlling and mitigating the amount of anthropogenic pollutants released into the atmosphere to address concern caused by climate change. In 2003, Maine passed the Maine Climate Action Plan (MCAP) to help the state reach its RGGI standards which include reducing emissions to 1990 levels by 2010, reducing a further 10% by 2020, and 75% by 2050. Maine is not currently meeting its requirements, and will require significant reductions in emissions if it hopes to remain in compliance with RGGI42.  While initially, most of the major laws impacting renewable energy were federal, state governments are beginning to play a larger role in promoting alternative energy sources. In 1997, as part of an Act to Restructure the State’s Electric Industry, Maine adopted a renewable portfolio standard (RPS), which mandated that 30% of the energy sold in Maine must come from eligible renewable resources by 200043. The purpose of this bill, LD 1804, is to “ensure an adequate and reliable supply of electricity for Maine residents and to encourage the use of renewable, efficient and indigenous resources”43. Under the authority of the Maine Public Utilities Commission,  Maine’s RPS required that by 2000, “[e]ach competitive electricity supplier, including standard offer suppliers, must provide no less than 30 percent of its total kilowatt-hour sales to customers”43 from renewable resources. Maine’s RPS is larger then any other state in the country as a percentage of total energy sold. However, this figure is misleading because over 30% of Maine’s energy already came from renewable resources36, indicating that while the RPS level is higher then any other state, it is not imposing a change in  energy production in Maine, in direct contrast to some states which are forced to make significant changes in energy production to achieve their RPS standards, such as California which has set an RPS 200% higher than current state renewable production at the time of inception44.

            While this bill was aimed at setting a standard for the amount of renewable resources used in Maine it was not designed to increase the amount of renewable energy generated in Maine43. In response, the 2006 State Legislature passed a new bill, LD 2041, stipulating that “‘the share of new renewable capacity resources as a percentage of the total capacity resources in this State on December 31, 2007 increase by 10 percent by 2017’”43. This amendment promotes growth in the renewable energy production industry while providing environmental benefits to Maine. Under LD 2041 a source is eligible for the RPS as long as they are a “qualifying small power production facility under the Federal Energy Regulatory Commissions (FERC) rules or a generation facility whose nameplate capacity does not exceed 100 megawatts,” and produces power from one of the specified pre-approved sources 43. These sources include various types of fuel cells, different solar arrays installations, wind and geothermal power installations, hydroelectric generators [which meet all state and federal fish passage requirements], biomass generators, high efficiency cogeneration systems of any size as well as other smaller sources43. While these all qualify under the amendment, “generators fueled by municipal solid waste (MSW) in conjunction with recycling” do not, despite the fact that they are considered a renewable energy source under the original RPS bill. In addition, self-generation of electricity is not eligible either under the amendment.

            Electricity generators are required to have a New England Power Pool Generation Information System certificate indicating that they are in compliance with all RPS regulations. In addition, the PUC has the authority to audit any electricity provider at any time, confirming that they are in full compliance with the regulations of RPS. If an electricity provider is not in compliance with the RSP standards during the prescribed period, indicating that it has not sold the minimum 30% renewable energy, but has instead only sold between 20 and 29%, it is allowed to fix the imbalance during the second period as long as at the end of both periods the aggregate amount of energy from renewable energy is 30%43. 

LD 2041 is an important bill for the future of Maine in many ways. First, it provides incentives for the increase in production of renewable energy, and second it promotes a shift in overall energy production. While a RPS of 40% by 2017 is still lower than the current amount of energy sold in state from renewable resources, the mandate for new and additional energy source use will propel Maine further into the forefront of renewable energy production. This situation could provide an economic benefit for Maine. The state is currently one of the largest producers of energy supplying southern New England and the greater Boston area. It has been shown that certain individuals will pay a significant premium for green energy45 46. The demand for clean non-polluting energy at the doorstep of Maine is an economic force which could be harnessed. 

Figure 1.11  Portfolio Standards and Renewable Energy as a % of Total Energy Produced in Maine43


Wind Programs

Maine has a high potential for wind power. The mountain areas of central Maine along the Appalachian Mountains, and areas of the coast are perfectly situated for wind farms. The inland high wind potential sites are situated in area of low population and are ideal locations. While the majority of the state provides weak potential, these highlighted sites offer more then enough power to drastically alter Maine’s energy profile.

The Mars Hill Wind Farm (Table 1. 5) is currently the only wind farm in Maine. It provides an amount of energy equivalent to approximately 4% of all the homes located in the incorporated municipalities as of 2000 (Figure 1.13).

Aside from Mars Hill, there are seven other wind farm proposals in Maine, each in different phases of development.  However, only three projects are close to final approval and construction. The Black Nobble and Kibby Mountain Projects are currently undergoing public hearings, and the Stetson Ridge project has already received approval from Land Use Regulation Committee (LURC)47 (Table 1. 5). These three projects if constructed, could along with the Mars Hill Wind Farm, provide enough energy for roughly 19% of all homes in the incorporated municipalities as of 2000 (Figure 1.13).

Of the other 4 projects proposed for Maine, two seem likely to be developed, one has had its permit overturned, and the other has not yet provided enough information to be discussed here. The Freedom Project, a relatively small wind farm, only slated to provide 3.4 MW of energy had its permit overturned by the local Appeals Board in early 200748. The project in Prentiss Township on Passamaquoddy land is in the process of collecting wind data and has not indicated the number of turbines or expected MW produced (Table 1. 5). The last two proposals are The Partridge & Flathead Mountains and Record Hill Project (Partridge Project), and the St. John Valley Projects (Table 1. 5).  If these two projects are passed along with the Black Nobble, Kibby Mountain, and Stetson projects, the amount of wind energy produced in Maine will rise from only 4% of homes in the incorporated municipalities (from the Mars Hill Project), to a staggering 50% ( Figure 1.13). These numbers indicate a significant shift in energy production for Maine which could occur within the next five years.  


Figure 1.12  Wind Power Potential in Maine49

Figure 1.13  Houses in the Incorporated Municipalities Complied Supplied with Wind Energy from Current and Pending Wind Projects



Table 1. 5  Current Wind Projects Nov. 200747 48




Size (MW)


Equivalent Homes Energy Use

CO2 Offset (tons)

NOX Offset


SOX Offset (tons)


Mars Hill







Close to Approval

Black Nobble








Kibby Mountain








Stetson Ridge







Information Gathering









St. John’s Valley







* Estimated 50



Solar Rebate Program

            As part of Governor Baldacci’s 2005 Solar Initiative, the Maine Solar Energy Rebate Program was created and was made a law under the title “An Act to Encourage the Use of Solar Energy” 35-A MRSA §3211-B51. This program was created to provide incentives for the use of solar energy. Rebates became available for the installation of both solar electric and solar thermal systems such as: photovoltaic (PV), solar hot water, and solar air systems. Solar electricity generating systems, or photovoltaics, are eligible for a $3/watt rebate on the first 2000 watts of installed capacity, and a $1/watt rebate for the next 1,000 watts, providing a potential incentive of $7,00051. The solar thermal systems (solar hot water and solar air) are eligible for a 25% rebates on the installation process or $1,250, whichever costs less52. This program was allocated $500,000 annually through 2008; however, the cap for the program is $1.75 million, and it is stipulated that “25% ($437,500) of the total funding be allocated to PV systems and 75% (1,312,500) be allocated for solar thermal systems” 51. From July 1, 2005 to June 30, 2006, 69 systems were installed, and 26% of the allocated funds were used.  There is a significant demand for all the systems, but PV systems were extremely popular, using roughly 30% of the allocated funds in the first year. Those 69 systems installed in the first year have an annual CO2 savings of 123.1 metric tons, (a lifetime savings of 2,463.0 metric tons), and these PV systems produced a predicted 3,463kWh per year 51.  The solar rebate program is important for two reasons. First, it increases the amount of solar energy being used in Maine and reduces the state’s dependency on non-renewables. Second, this rebate program expands the infrastructure supporting solar energy in Maine, because not only does it provide money for individuals to use solar power, but it also increases the number of certified installers of solar technology. By increasing the number of certified installers, the state facilitates future expansion of the sector.


            There are two main sectors of stakeholders involved with renewable energy use in Maine. First are the independent producers who physically create the energy distributed throughout the state and the region. Second are the associations which facilitate the purchasing of renewable energy for third parties.

            The primary association representing the various producers of energy is the Independent Energy Producers of Maine (IEPM), which is comprised of 18 energy producing members, and 19 non-producing members53. IEPM members produce electricity in a “sustainable manner from hydro, biomass, wind, and waste”53. This non-profit organization represents its members in the state legislation and to the PUC.

            The second group of actors assembles energy from different sources, and makes it readily available to consumers in Maine. There are two main players in this group, Maine Power Options (MPO), and Maine Interfaith Power and Light (MIPL). MPO negotiates prices for renewable resources for different governmental and non-profit entities in Maine, serving as a mediator between a number of energy providers and the customer. MIPL is a non-profit organization which aggregates energy from a number of different producers and provides energy packages to individual consumers, as well as carbon offset opportunities.



Case Study 1.1 Upcoming Energy Choices:  Presidential Implications


           The State of Maine’s energy could be significantly impacted from the federal level with the upcoming presidential election. Energy has quickly moved to the forefront of national politics, and there is a considerable divide between the presidential candidates over the direction the nation should head. 

For the most part, the presidential hopefuls are towing their party’s line. The Democratic candidate’s energy policy focuses mainly on reducing domestic oil consumption, linking the issue to the need to mitigate climate change. The Republican candidate’s policy on the other hand concentrates on domestic energy production, opening up drilling in the Arctic National Wildlife Refuge (ANWR) and developing coal gasification. They are divided on the issue of taxation and regulation, the Democrats support repeals on tax breaks for oil and gas companies and a significant increase in CAFÉ standards, while the Republicans oppose such measures. Only Republican John McCain has broken ranks, opposing tax breaks, drilling, and ethanol subsidies, while supporting fuel economy increases.

            These policies are directly tied to Maine’s own energy policy, especially in regards to oil and gas prices and whether carbon emissions reduction will become a major issue of the Federal government or remain largely a state initiative. The direction of energy for Maine and the rest of the nation will be largely decided this coming November54.



Laws, Institutions and Management

            Since the early 1970’s, federal and state governments have promoted the use of renewable resources by creating fiscal incentives.  Initial legislation associated with the promotion of renewable resource energy use was primarily focused on providing funding for research development starting during the 93rd Congress. These bills included the Solar Energy Research Act and the Geothermal Energy Research, Development and Demonstration Acts of 1974. These acts served primarily as research tools to push these renewable sources towards becoming major national sources of energy.

            The next major round of Congressional legislations occurred during 1978, when four key statutes on energy were passed. Perhaps the single most important bill ratified that year was the National Energy Act of 1978 (NEA) as explained earlier in this chapter. The main purpose of this bill was to “decrease the Nation’s dependence on foreign oil and increase domestic energy conservation and efficiency” 55. This bill served as the catalyst which began a significant push towards the development of renewable resources as a viable source of energy. The Public Utility Regulatory Policies Act (PURPA), mentioned earlier in this chapter, had significant bearing on the use of renewables because it forced open the energy market to renewable energy. PURPA was monumental because it “requir[ed] utilities to buy electricity from qualifying facilities (QF), which are … nonutility facilities that produce electric power using cogeneration technology of renewable power plants with capacities of less than 80MW”55. This allowed small scale renewable energy sources to become viable and compete with larger, established fossil fuel industries. The third law was the Solar Photovoltaic Energy Research, Development and Demonstration Act which promoted making PV systems cost effective for energy production. Lastly, Congress passed the Energy Tax Act (ETA) in 1978, which in part created considerable incentives for the use of renewable resources. The ETA provides residential consumers a 30% tax credit on their investment in solar and wind energy equipment. As well as a 10% tax credit for businesses which install certain renewable energies including, but not limited to solar, wind, and geothermal 56.

            The 96th Congress passed the Wind Energy Systems Act of 1980, which helped speed up the research and development of wind energy to be implemented mainly by the Department of Energy and the National Aeronautics and Space Administration (NASA) 56.

            The next major bill came during the 101st Congress: The Solar, Wind, and Geothermal Power Production Incentives Act of 1990 removed all size restrictions on renewable energy production as defined by PURPA in 1978. This allowed larger renewable projects to bloom, because according to the original wording of PURPA, qualified renewable energy production facilities were defined as having “capacities of less then 80MW”55. The removal of these size restrictions allowed the renewable energy sector to expand and create greater production capacities. The restriction was temporarily reduced to 50MW. This short-term opportunity was available until Dec 31 1994.57

During the 102nd Congress the Energy Policy Act (EPACT) of 1992 was passed. This bill created a production tax credit (PTC) which provided a further incentive for the production of wind and closed circuit biomass production (an internally contained biomass system) at the small scale tax-paying level 55. In addition EPACT provided an incentive known as a Renewable Energy Production Incentive (REPI) for larger “tax-exempt publicly owned utilities and rural cooperatives” which produce larger amounts of energy from wind, geothermal, solar, and biomass sources 55.

Table 1.6  Federal and State Laws Impacting Renewables in Maine




Solar Energy Research Act



Initiated the Research into Solar Energy becoming a useful source of energy production

Geothermal  Energy Research, Development and Demonstration Act



Initiated the Research into Geothermal Energy becoming a useful source of energy production

National Energy Act





Shifted the focus of Energy production away from foreign sources and boosted the drive for domestic energy sources including renewable resources



Created system where Qualified facilities (QF) (renewable producers of energy under 80 MW) could produce energy which utilities

Were required to purchase. It made small producers viable.


Solar Photovoltaic Energy Research Development and Development Act



Worked to make Photovoltaic Systems cost effective  

Energy Tax Act (ETA)


Created tax credits for residential and business consumers of renewable energy


Wind Energy Systems Act


Sped up Research and Development of Solar power


Solar, Wind, and Geothermal power Production Incentives Act



Amended PURPA. Temporarily reduced the size restriction of 80MW to 50MW for QF

Energy Policy Act (EPACT)


Created Production Tax Credit (PTC)



Act to Restructure the State’s Electric Industry



Created the Maine State Renewable Portfolio Standard (RPS)

Act to Encourage the Use of Solar Energy


Maine State Law to reduce the cost of solar installations to promote an increase in solar energy use


Energy and the Environment

Trends and Current Status

            Climate change by definition is a global problem, but its effects will have regional and Maine specific implications.  A recent report released on the effects of climate change on New England reported that without climate change mitigation Maine would within a hundred years have a climate similar to that of Washington D.C. today58.  While Maine cannot solve climate change unilaterally, it can lead efforts to develop mitigation and adaptation strategies that will help Maine business and residents adjust to new climate realities59. 

            Mentioned earlier, Maine has taken lead in recent years on the issue of greenhouse gas emission reduction.  The 2004 “State of Maine Climate Change Action Plan” drafted by the Department of Environmental Projection at the request of the legislature, identified ways in which Maine could reduce its carbon emissions to 1990 levels by 2010 and 10% below 1990 levels by 2020.  The suggested policy actions are meant to be consistent with a Memorandum of Understanding signed in 2001 between the New England Governors and the Eastern Canadian Premiers which set these tentative goals in carbon emission reduction59.  In 2003, an invitation was extended to Maine to join a regional initiative to reduce greenhouse gas emissions and establish a cap and trade system for CO2 emissions from fossil-fuel based electric generation systems, of which there are six in Maine60.  This initiative became known as the Regional Energy Greenhouse Gas Initiative (RGGI), discussed earlier, which the Maine legislature formally adopted early in 2007 committing Maine’s large fossil fuel driven power plants to reach the CO2 emissions reductions targets set in the Climate Action Plan 60.  CO2 reduction targets set by REGGI are the closest thing to mandatory CO2 emission reductions as of yet anywhere in the nation.  

Carbon Dioxide Emissions

            Indicators such as the Carbon Footprint have been developed to account for CO2 emissions at all levels of production and consumption.  Although we did not have the time or resources to calculate the carbon footprint of Maine within the context of this report, we do use state emissions data provided by the EIA to analyze CO2 emissions trends over the last decade and a half (1989 to 2005).  The data represent the CO2 emissions for the electric production sector and therefore offers a good but not entirely complete picture of CO2 emissions associated with energy use in Maine (i.e. energy use from transportation and home heating is left out).

Figure 1.14 represents Maine CO2 emissions by source for petroleum, natural gas, coal, and municipal solid waste over the period for which data was available, 1989-2005 (solid waste data is only available from 2000 onward).  Over this period coal and municipal solid waste emissions stay relatively constant at around 1 to 2 million metric tons of carbon emissions, with coal making a peak at 2.7 million metric tons in 2002.  More dynamic are the trends of petroleum and natural gas. From 1989 to 1999, petroleum accounts for the largest percentage (58%) of emissions from the electricity producing sector.  Beginning in 1999 petroleum emissions begin to decline after reaching a peak at just more than 11 million metric tons, apparently stabilizing at just under 5 million metric tons in 2002.  This contrasts with the pattern seen in natural gas:  from 1989 to 1999 CO2 emissions from natural gas are extremely low compared to emissions from other energy sources.  Beginning in 1999, natural gas emissions begin to rise peaking in 2002 at over 12 million metric tons. At this peak, CO2 emissions from natural gas represented 61% of total emissions from the electricity sector.  There is a sharp decline in emissions in 2003 and natural gas emissions remain under 10 million metric tons for the next couple of years.   Throughout the period CO2 emissions are relatively stable CO2 emissions at around 10 million metric tons but peak in 2002 at 20.3 million metric tons. This peak occurs at the same time we see a switch from petroleum to natural gas, and although CO2 emissions fall they remain above pre-2000 levels.

These trends are perhaps unsurprising when policy and production sources over the time period are considered.   Outlined in the non-renewable energy section, it was around 1997-1999 that the first natural gas pipelines were completed, and five new natural gas power plants went on line in Maine.  The emissions data does show an interesting trend in the years just before and just after 2000.  During this period we see a major shift in the composition of Maine’s CO2 emissions from the previous leading contributor, petroleum, to a previously non-existent source natural gas.  Explanations for this are many: it was in 2000 that Maine’s energy de-regulation policy went into effect and electric suppliers and distributors became separate entities. Also, Energy trends for Maine in the mid 1990s were characterized by the increased availability and comparatively low price of natural gas due to the building of the first natural gas pipeline.  Natural gas was also strongly promoted by environmentalists, who wanted to see the region’s energy mix move away from “dirty”, heavily polluting fossil fuels such as coal and oil to the “clean” energy of natural gas which, while still a fossil fuel, pollutes significantly less1.  When combined these factors produce the most plausible explanation for this shift in the composition of CO2 emissions.  That Maine’s CO2 emissions seem to stabilize above 1990 levels is a result of deregulation; Maine Yankee Nuclear Power Plant, which had previously provided more than 60% of Maine’s energy mix, became uncompetitive, and shut down.  Thus an overall increase in CO2 emissions may account for this replacement of nuclear power (which does not produce CO2 in production) by CO2 emitting sources.

Figure 1.14  Maine CO2 Emissions for Energy Sector by Energy Source42


How do these CO2 emissions compare to national source trends? Figure 1.14 identifies national trends in CO2 emissions over the same period of time, 1989-2005.  National trends in carbon dioxide emissions closely follow emissions from the coal sector, at least in electric production.  Coal while playing only a minor role in Maine’s energy mix is the nationally preferred energy source.  This combined with the fact that the environmental qualities of coal make it the most polluting of the fossil fuels, creating roughly twice the CO2 emissions of oil and four times the emissions of natural gas1.    The coal production sector is so overpowering that trends in other energy production sectors are lost when looking at national trends.  Among the sectors represented in the graph, the overall CO2 emissions trend is one of increasing emissions which indicates increasing energy production (and by default consumption).  Petroleum is the only production sector that seems to be remaining relatively constant and even slightly decreasing. This only means that petroleum for the production of electricity has remained relatively constant. It is important to note that in contrast petroleum for use in transportation accounts for the largest total CO2 emissions nationally (as well as in Maine)1 .

Figure 1.15  National CO2 Emissions for Electricity Sector by Energy Source42


Providing a regional context for CO2 emissions, Maine roughly ties New Hampshire in total emissions (11.7% and 10.5% of total emissions over the time period respectively), while Massachusetts is the clear leader in total emissions accounting for 51% of total emissions over the time period (Figure 1.16a).  However, Figure 1.16b shows that Maine is a leading state in per capita CO2 emissions having per capita emissions over the entire study period of 157.5 metric tons per capita.     Maine CO2 emissions from the electric industry rank third in overall emissions, but when CO2 emissions are determined on a per capita basis, Maine’s becomes the largest CO2 emitter.  At its peak in 2000, Maine produced 9.7 metric tons of per capita CO2 emissions compared to the regional per capita emissions of 7 metric tons.  As stated earlier Maine is the only New England state in which industrial energy use accounts for a greater percentage of use than the residential sector8.  Industry is more energy intensive than a household which may in part account for this disparity in per capita CO2 emissions.   Even so, many industries in Maine including many paper mills (Maine’s largest Energy Consumer) produce some percentage of their own power, which means that the Maine consumer probably does use more energy than the average New England resident.   Vermont is unique among New England states in that 85% of its energy mix is supplied by nuclear power and a significant portion of the rest is supplied by hydropower out of Canada; this explains why Vermont’s CO2 emissions are so low compared to the rest of New England61.  In per capita calculations, there will be increased inaccuracy the further one moves away from the reference point (in this case 2000 census population data); though general trends are still identifiable.

Figure 1.16  New England Total and Per Capita CO2 Emissions62


“Green” Electricity Options in Maine

With the adoption of electricity deregulation in 2000, it became possible for Maine electricity consumers to choose their energy supplier. With this choice came the potential for Mainers to choose to buy “green energy”, energy produced in ways that minimize or negate the environmental impacts of its production.  Mentioned earlier these often include solar, wind, biomass, and some hydropower. There are two ways that consumers can use their purchasing power to support green energy supply.  The first is directly purchasing green energy.  The second is by purchasing green energy certificates, also called green credits or “green tags.”  Though these two options fundamentally achieve the same purpose, the first option of directly purchasing the green power is the easier to understand.  Since deregulation lets the consumer choose his or her energy supplier, the consumer can simply choose an electricity package that comes from hydropower, wind, or other renewable energies.  The second choice of buying green energy certificates essentially achieves the same thing, only here the consumer is buying these in addition to his or her standard electricity package.  Money from certificates goes to electricity suppliers that produce green energy, ensuring that the amount of energy represented by the certificate is produced at their facility.  The difference to the electricity consumer is that choosing green energy supply means higher monthly electricity bills, whereas certificates means the same energy bill but paying additional electricity charges elsewhere41.  Both end up costing consumers approximately the same amount41.

The Maine Energy Investment Corporation (MEIC) maintains a Green Power Products Menu for the state of Maine.  The “Menu” has been reproduced in Table 1.7with a key to the energy providers given in
Table 1.8
.  Due to the nature of the power grid, once electrons go in from any source they become part of a giant pool of electrons.  This means the electricity that you use could in reality come from any one of multiple power sources, but by buying that power, the consumer is paying that source to produce that quantity of energy into the grid.  According to the MEIC, an average Maine home uses 6,000 kilowatt-hours per year which, when using clean electricity over conventional sources, would add $10 per month
63. Because it does not matter where the energy is put into the grid, The Maine consumer can purchase clean energy produced anywhere in the nation or even North America; this is represented by the fact that some green energy  providers in Maine offer national service.



Table 1.7 "Green Power Product Menu"64    







Certificate Products


NewWind Energy®


100% new wind

NY, NJ, & New England



Green Tags



99% wind,

1% solar


Green-e & Climate Cool




100% new wind





100% wind


Climate Cool



General Electricity Supply



Residential and Small Business




Maine Clean Power


100% small hydro


Low Impact Hydro Institute


Maine Clean Power Plus

80% hydro, 20% new wind

ME, National

Low Impact Hydro Institute



Large Business, Institutions, and Municipalities



ElectricGreen: Green-e

10% new LFG, 15% new wind, 30% biomass, 45% hydro


New England



ElectricGreen: Maine Made

50% small hydro, 50% biomass





MPO Maine Made

50% small ME hydro, 50% biomass





MPO Green-e

10% new LFG, 15% new wind, 30% biomass, 45% hydro

New England





Table 1.8  Key to Energy Providers on "Green Power Product Menu"63







Community Energy Inc.




Constellation New Energy



North America

Bonneville Environmental Foundation




Maine Interfaith Power & Light




Maine Power Options


Maine's local governmental and non-profit organizations


Maine Renewable Energy




Native Energy



Native Energy


            Third-party certification is currently used in other sectors of Maine’s economy, like forestry, to ensure the practices and methods being utilized are done so in a sustainable manner.  “Third party” means inspected by an outside organization that theoretically has nothing to gain or lose by the certification of a specific product or practice.  The idea behind this certification is that it is a win-win situation, as a company or industry obtaining third-party certification can market its energy as green to its buyers, and conscientious consumers can be reassured that the product that they are buying is produced (in this case) with high environmental standards.   To what extent is this notion is being utilized in Maine for energy?  Currently, looking again at the Green Power Product Menu in
Table 1.8
, there are only three programs offering third-party certification for energy in Maine:  the Green-e Renewable Energy Certification Program (Green-e), the Low Impact Hydro Institute (LIHI), and the Climate Neutral Network’s Climate Cool™ certification program.   None of these programs are Maine-specific, but rather operate on a national scale.  The first two deal with energy sources commonly referred to as “renewable”; LIHI dealing with hydropower specifically and Green-e, hydro and most every other renewable energy source.  Climate Cool, on the other hand, certifies that throughout the entire lifespan of a product, a company offsets all greenhouse emissions so the end product is completely greenhouse gas neutral. 

            While purchasing green electricity might seem like one of the most straightforward methods of reducing the impacts of energy consumption on the environment, the reality is that there is little demand for such products.   From 1998 to 2002 the Maine Public Utilities Commissions conducted a survey of Maine households to determine residential electricity attitudes and power product choices.  The survey showed that consumers showed even after deregulation 41% of household consumers felt “not very well informed about electricity deregulation65.  It also identified that the “vast majority of Maine consumers have never bought energy from a competitive supplier” meaning they have only bought the “standard package” offered by transmission companies65.  Maine like the rest of the nation seems not to care where their energy is produced as long as it is cheap1,  the survey showed that the majority of consumers would prefer a lower costing “standard offer” over increased competitiveness in the electricity market65.  The survey does identify some interesting trends though: in the years leading up to 2002 there was an increasing percentage of household consumers who would be willing to pay slightly more for more environmentally benign sources of electricity, though the percentage wise this is still half of the population 50%, and a very few (4%) were willing to pay a premium price.  If giving the option of an “environmentally clean check off box” more than half of consumers, 56%, indicated then might be somewhat like to choose it while 46% indicated they would not or were not likely to take advantage of the option65.  These survey results show that there is interest in environmentally benign sources of energy though very few household consumers take advantage of deregulation to purchase it.  The vast majority of those who indicated that they were interested in purchasing green power were only somewhat interested in the possibility.  The take home here is that, they may be interests but price seems to be the largest influence on electricity purchase.  Only a very small percentage, 2% in 2002, use deregulation to buy from energy competitors and it is uncertain how much of this small percentage buy from environmental benign competitors 65.   

The State of Maine’s government is one of the notable exceptions since this survey.  Though not a residential consumer, since 2005 all electricity used in the government buildings in Maine has been offset by green credits from a hydropower facility in Rumford Maine.  The Rumford facility is currently awaiting ISO approval to sell its green credits on the regional market, but until then, Maine’s government has agreed to purchase them41. 

Energy Efficiency

            Energy demand has long been seen as synonymous with economic growth, so much, that some have suggested that high energy demand means high economic growth, but energy efficiency questions whether this is necessarily true2.  Because the most environmentally benign ton of CO2 is the one that is never emitted66, energy efficiency technologies are now seen as one, if not the key, solutions to climate change mitigation, at least in the immediate and near future67.  In recent years Maine has agreed and made this its primary policy towards CO2 emission reductions and climate change mitigation41.  Historically, Maine’s energy efficiency initiatives have been small-scale, spread across government agencies, and lacking in coherent goals.  Increasing realization of the benefits of energy efficiency led the Maine legislature to call upon the State Planning Office (SPO) in 2000 to develop an energy efficiency plan for Maine.   Although by 2002 SPO had, their plan was never implemented68, and that same year the Maine Legislature made energy efficiency a mainstream policy with the passage of “An Act to Strengthen Energy Conservation,” which set up a separate program under the Maine Public Utilities Commission called Efficiency Maine to fulfill the task of promoting energy efficiency.  Efficiency Maine is now the central actor for implementing energy efficiency within the state.

            Modeled after its New England counterpart, Efficiency Vermont, Efficiency Maine has the primary purpose of promoting energy efficient technologies, help Maine residents and businesses reduce energy costs, and improve Maine’s environment66.  Its four primary objectives outlined in its 2006 Annual Report are to: (1) increase consumer awareness of efficiency options, (2) create favorable market conditions for efficient products and services, (3) promote sustainable economic growth while reducing environmental damage, and (4) reduce the price of energy over time by reducing the energy demand.  The primary method with which it currently promotes these objectives is through the implementation of six programs: the Business, Residential, Low Income, Building Operator Certification, High Performance Schools, and Education and Training Programs (Table 1.9). These programs all promote aspects of Efficiency Maine’s objectives. For example, the residential lighting campaign educates consumers about the benefits of energy efficiency, while at the same time subsidizing efficient lighting products until they become accepted and normalized (66).  For a specific case study of the Education and Training Program see Case Study 1.2.


Table 1.9  Efficiency Maine Programs Summarized 66







2006 Achieved Annual Savings in Mega Watt Hours (MWh)


Project aimed at helping Maine business reduce operating cost to become more competitive.  Promotion of efficient technologies and practices central goal. Twenty percent of funds are required to aid small business.


23,094 MWh

ENERGY STAR® Residential Lighting

Issued rebates for more than 700,000 efficient lighting products in 2006.  Goal is to educate consumers about and normalize efficient lighting in Maine homes.  It is the most successful program in terms of cost to benefit analysis (4.7 to 1).


39,047 MWh

Low Income Appliance Replacement

Replaces old inefficient appliances with new efficient ones for qualified low income homes to reduce the increased financial burden of electricity on these customers.  The focus has been on efficient refrigerators and lighting.


5,934 MWh

Building Operator Certification

Seeks to train facility managers to identify energy efficiency opportunities with existing infrastructure of their facilities and where to make key improvements that maximize benefits in energy conservation.


6,684 MWh

High Performance Schools

Focus is on providing technical and financial assistances for energy conservation in new school production.  No schools under the program were completed in 2006. but the expectation was that by the end of 2007 ten schools under the program would be finished.


No projects completed in 2006.

Education and Training

This program offers an education program for school age children and training courses for key efficiency stakeholders.  The primary benefits of this program are seen in aiding in meeting long term market transformation goal for a sustainable economy.






Mentioned above one of Efficiency Maine’s key purposes is to reduce environmental damage from energy use.  In 2004 it began calculating annual benefits in terms of metric tons of carbon dioxide, sulfur dioxide, and nitrogen dioxide savings.    Efficiency Maine estimated that it saved 90,503, 162,659, and 320,849 metric tons of CO2 emissions over 2004, 2005, and 2006 respectively (Figure 1.17) (Table 1.9)(Table 1.6)  These estimates are calculated based of Maine-specific marginal emission rates published by the ISO in its “2004 New England Marginal Emission Rate Analysis” report.  It is also important to note that these are the CO2 savings over the lifetime of the energy efficient appliances, not annual savings.  Looking at CO2 emissions data presented earlier in this report we find that these numbers are very small compared with Maine’s overall CO2 emissions. Carbon dioxide emissions for the electricity industry alone in 2004 and 2005 were both above 14 million metric tons, and there is no reason to believe 2006 emissions did not reach similar levels.  




Figure 1.17   Efficiency Maine Carbon Dioxide Savings




Case Study 1.2 Maine Energy Education


Efficiency Maine co-sponsors two state wide education programs for primary and secondary school aged students as part of its Education and Training Program.


Maine Energy Education Program (MEEP)


This program sponsored in part by Efficiency Maine provided education on energy issues for students in Central and Southern Maine. It is a non-profit organization started in 1985, with the primary purpose of helping participants understand the relationships between the economic, social, and environmental impacts of energy through experiential learning.


Electrical Education by Maine Public Service Company


This program operated by the Maine Public Service Company provides classroom and out of classroom programs for a range of community groups in Northern Maine.   The majority of programs are student oriented, such as the “Energy Eagles Patrol” in which team of students check school spaces and turn off lights if they are not being used.


NEW Maine Energy Education Curriculum Project


Starting in 2007, this program is a three year project to design to develop consistent standards and curriculum for energy education throughout the state.  The focus is curriculum for students in fourth through eighth grades.  An advisory committee made up of public and private organizations such as the Maine Department of Environmental Protection and the Chewonki Foundation that will oversee the development of this curriculum.


Discussion and Analysis


While consumption of individual sources of energy has changed significantly in the last 50 years, non-renewable sources as a whole continue to play a dominant role in providing Maine’s energy. Natural gas has supplanted coal, petroleum, and nuclear as the most consumed source of electricity. Fuel oil dominates the home heating sector, with natural gas a very distant second.

This balance among sources is not stagnant. Rather, it remains in constant flux, changing according to price, supply, and consumer preference, among other factors. Natural gas has completely changed the state’s electricity distribution in the same way nuclear power did in the 1970s. Its low emissions and high efficiency makes it the least environmentally harmful choice for fossil fuel use for both electricity and home heating. However, consumption of natural gas has been unstable because of supply and price issues. Some policy makers have suggested that investment in LNG terminals would stabilize the market and help meet increasing energy demands in both electricity and home heating. Proposed projects have been stymied by environmental and security concerns. Regardless of supply, the state of Maine currently lacks the pipeline infrastructure to offer natural gas everywhere. Thus, most Maine residents must rely on home heating oil, which has more environmental consequences and is less efficient.

            Renewable resources are on the rise in Maine. With the adoption of a higher Renewable Portfolio Standard, Maine is expanding its current base of renewable resources to include technologies that historically have not been part of the Maine energy portfolio. Although Maine has the highest RPS in the country, its current standards are more a reflection of previously existing infrastructure rather than an aggressive commitment to expanding renewable energy use. Hydroelectric and biomass power have always played a large role in Maine, and will continue to do so in the future. Yet other sources such as solar and especially wind, have the potential of dramatically alter the way Maine approaches energy.

            The Maine Solar Energy Rebate Program is gradually making inroads into the state’s energy portfolio. In its first year, 69 systems installed in Maine were given rebates. While this quantity is small, the initiative has begun to create a market for installation services. Greater numbers of qualified technicians will make future installations cheaper and easier. This will increase the amount of systems installed and make solar power a larger part of Maine’s energy mix. Wind has the capability of providing multiple benefits for Maine. If all of the current projects proposed are approved and implemented, Maine could power the equivalent of roughly 50% of the homes in the incorporated municipalities with electricity from wind. Unlike fossil fuels, wind turbines create zero carbon emissions.

            Maine has already taken steps towards addressing climate change by reducing CO2 emissions.  Targets set by the New England Governors and the Eastern Canadian Premiers, MCAP, and the recent adoption of RGGI have all shown that, in many ways, Maine has taken a lead role in climate change mitigation. However, Maine has the highest per capita CO2 emissions in the region and nationally is ranked 10th nationally for per capita emissions 8.  Of the other policy options available to meet CO2 emissions reduction targets, efficiency promotion shows great promise. Efficiency Maine has made positive steps in recent years in marketing efficiency solutions and this it is projected to continue. 

Green energy products, on the other hand, are not known or used by most consumers. Over half of the consumers in a recent MPUC survey indicated that they would likely check an option for green energy on their energy bill. This indicates that there is great potential for expansion this area, but lack of consumer education has left it underutilized. 




We see three possible scenarios for future energy consumption in Maine.  In the first scenario, current policies continue and the status quo remains: fossil fuel use continues to be high; energy demands grow at a significant rate; energy sources come primarily from out-of-state sources; CO2 reduction targets are not met, and CO2 emissions actually increase. 

In the second scenario, current policies are implemented more effectively but little or no new policy initiatives are undertaken:  planned increases in the RPS are met; energy efficiency initiatives continue to grow; energy demand grows but at a reduced rate because of energy efficiency; renewable and in-state energy sources increase, general fossil fuel use as a proportion of total energy decreases, natural gas remains a significant contributor; and current CO2 reduction targets are still not met.

 In the third scenario the state adopts additional climate change mitigation policies. These initiatives result in increases to the RPS; continued growth in efficiency; effectively promote green energy products to consumers; renewable, in-state sources become the primary source of energy as the state transitions away from fossil fuel sources; and Maine meets current CO2 reduction targets.



Based on these scenarios, we have several recommendations concerning how the State of Maine should frame its energy policy with respect to the environment. These are most consistent with the third scenario. While long term goals should phase out fossil fuel use and promote renewable energies, in the short run, the state should pursue the cleanest and safest non-renewable fuel available and continue to promote energy efficiency.

Maine’s best non-renewable option is natural gas but increased commitments from both the Federal and Maine governments will be required to achieve statewide benefits. The lack of pipeline infrastructure must be addressed if people are to have a heating alternative to home heating oil besides wood. The Maine government should extend its efficiency subsidization initiatives to include tax rebates for switching over to natural gas, as the cost of new equipment runs in the thousands of dollars16. As a means to stabilize the market, we support is the selective installation of LNG facilities along Maine’s coast. LNG would increase state gas supplies to meet growing and offer economic development to surrounding areas. Although risks exist, LNG has a much better safety record than oil tankers, which already deliver crude oil to Portland on a regular basis. The siting must be sensitive to local communities but also be done in the most effective location. It is in the best interest of Maine to invest in natural gas while it transitions to more sustainable energy sources.

In the long run, Maine has the potential to radically shift its energy mix away from fossil fuels to renewable resources. While energies such as solar and geothermal should be expanded, wind power has the potential to drastically alter Maine’s energy portfolio. Within five years, Maine could supply an equivalent amount of energy necessary to power roughly 50% of the homes in the incorporated municipalities. In addition, Maine should market the renewable energy it will generate to regional markets because of the premium price green energy commands.

 Two main problems must be addressed before wind can become a dominant source of energy for Maine. Apart from lacking infrastructure, Maine has not effectively marketed wind power as a viable alternative to its residents. To overcome these obstacles, the state should improve infrastructure by subsidizing turbine installation, while facilitating the connection of these farms to the state’s power grid.  The state should also improve public knowledge of the benefits of wind power through education initiatives. Because wind power can be loud and disruptive, the state should site wind farms away from residential areas.  It should be cognizant of the aesthetic beauty of Maine’s environment when making their proposals as well.

This would be a major step towards shifting reliance away from fossil fuels and would significantly reduce the amount of pollutants released into the atmosphere. It would also help Maine in achieving the goals laid out by RGGI and MCAP. In addition to the above suggestions concerning CO2 reductions, Maine should pursue the two following policy options to meet reduction targets. The state should continue to expand and promote energy efficiency, while promoting green energy products, as a large market could exist if consumer information is increased.  Lastly, Maine should increase the RPS to a more challenging level that better reflects its renewable potential.    


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State of Maine's Environment, Colby College Environmental Studies Program
Content by Students in ES493: Environmental Policy Practicum
Philip Nyhus, Assistant Professor of Environmental Studies
5358 Mayflower Hill, Waterville, ME 04901 USA; Email Us