Bill Summary – FastDemocracy

APPROVED                  CHAPTER
                                                                    APRIL 14, 2022                  604
                                                                   BY GOVERNOR                PUBLIC LAW
                                   STATE OF MAINE
                                            _____
                            IN THE YEAR OF OUR LORD
                         TWO THOUSAND TWENTY-TWO
                                            _____
                                   H.P. 880 - L.D. 1202
   An Act To Establish a Wood-fired Combined Heat and Power Program
Be it enacted by the People of the State of Maine as follows:
    Sec. 1. 5 MRSA §1766-A, as amended by PL 2009, c. 329, Pt. A, §1, is further
amended to read:
§1766-A. Electricity purchases for state buildings
    No later than January 1, 2010, all electricity consumed in state-owned buildings must
be supplied by renewable resources. For purposes of this section, "renewable resource"
has the same meaning as in Title 35-A, section 3210, subsection 2, paragraph C. In
purchasing electricity for state-owned buildings, the State may give preference to
electricity generated by community-based renewable energy projects, as defined in Title
35-A, section 3602, subsection 1 and electricity generated by combined heat and power
projects, as defined in Title 35-A, section 3622, subsection 1.
    Sec. 2. 35-A MRSA §3212, sub-§4-E is enacted to read:
     4-E. Combined heat and power energy. The commission may incorporate energy
generated by combined heat and power projects as defined in section 3622, subsection 1
into the supply of standard-offer service. The commission shall encourage entities based
in this State that are not otherwise either a standard-offer service provider or its affiliate to
participate in supplying energy from combined heat and power projects pursuant to this
subsection.
    Sec. 3. 35-A MRSA c. 36-A is enacted to read:
                                      CHAPTER 36-A
               WOOD-FIRED COMBINED HEAT AND POWER ACT
§3621. Short title
    This chapter may be known and cited as "the Wood-fired Combined Heat and Power
Act."
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§3622. Definitions
   As used in this chapter, unless the context otherwise indicates, the following terms
have the following meanings.
    1. Combined heat and power project. "Combined heat and power project" means a
facility that uses wood fuel to generate electric heat and power that is used for industrial or
space heating purposes.
    2. Net generating capacity. "Net generating capacity" means the electric output of
an electricity generating facility delivered to the transmission and distribution utility
system. "Net generating capacity" does not include any energy consumed by the generator
to operate the electricity generating facility or any energy consumed for facility lighting,
power and auxiliary facilities.
    3. Program participant. "Program participant" means a combined heat and power
project that is participating in the combined heat and power program established in section
3623.
    4. Wood fuel. "Wood fuel" means biomass derived from:
    A. Forest products manufacturing residuals, including, but not limited to, mill chips,
    sawdust, bark, shavings and fines;
    B. Harvest residues, including trees or portions of harvested trees that are too small or
    of too poor quality to be used for wood products; or
    C. Downed trees from weather events and natural disasters, nonhazardous landscape
    or right-of-way trimmings and plant material removed for purposes of invasive species
    control.
§3623. Combined heat and power program
    1. Program established. The combined heat and power program, referred to in this
chapter as "the program," is established to encourage the development in the State of
combined heat and power projects that will promote the climate action plan developed in
accordance with Title 38, section 577, subsection 1. The program is administered by the
commission.
    2. Program scope; limits on net generating capacity. The commission shall limit
participation in the program in accordance with this subsection.
    A. The net generating capacity of a program participant may not be less than 3
    megawatts or more than 10 megawatts.
    B. The total net generating capacity of all program participants combined may not
    exceed 20 megawatts.
    The commission may modify the amount of total net generating capacity stipulated
    under this paragraph based on program experience.
   3. Program eligibility criteria. To be eligible to participate in the program, a
combined heat and power project must:
    A. Be connected to the electric grid of this State;
    B. Have an in-service date after November 1, 2022;
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    C. Satisfy the limits on net generating capacity established in subsection 2, paragraph
    A;
    D. Be highly efficient, as determined by the commission; and
    E. Not be a participant in net energy billing under section 3209-A or 3209-B.
The commission shall prescribe an application form or procedure that must be used to apply
to the program under this chapter, which must include any information that the commission
determines necessary for the purpose of administering the program. The commission shall
inform an applicant, within 30 days of receipt of an application, if the application is
complete. The commission shall determine whether the combined heat and power project
qualifies for participation in the program as soon as practicable and respond in writing.
§3624. Long-term contracts for combined heat and power
     1. Investor-owned transmission and distribution utilities; required participation.
Notwithstanding section 3204, the commission may direct an investor-owned transmission
and distribution utility to enter into long-term contracts with one or more program
participants located within the service territory of the utility for energy, capacity resources
or renewable energy credits. The commission may direct investor-owned transmission and
distribution utilities to enter into contracts under this subsection only as agents for their
customers and only in accordance with this section. An investor-owned transmission and
distribution utility shall sell energy, capacity resources or renewable energy credits
purchased pursuant to this subsection into the wholesale electricity market or take other
action relative to such energy, capacity resources or renewable energy credits as directed
by the commission.
     2.     Consumer-owned transmission and distribution utilities; voluntary
participation. A consumer-owned transmission and distribution utility may, at the option
of the utility, enter into long-term contracts with one or more program participants located
within the service territory of the utility for energy, capacity resources or renewable energy
credits. Consumer-owned transmission and distribution utilities may enter into contracts
under this subsection only as agents for their customers and only in accordance with this
section.
    3. Sale of energy; contract procedures. Energy, capacity resources or renewable
energy credits contracted through long-term contracts pursuant to this section may be sold
into the wholesale electricity market separately or in conjunction with solicitations for
standard-offer supply bids under section 3212 or solicitations for green power offer bids
under section 3212-B. To the greatest extent possible, the commission shall develop
procedures for long-term contracts for transmission and distribution utilities under this
section having the same legal and financial effect as the procedures used for standard-offer
service pursuant to section 3212 for transmission and distribution utilities.
   4. Contract term. A contract entered into pursuant to this section may not be for
more than 20 years.
    5. Contract pricing; cost containment. The commission shall solicit contract bids
under the program. In selecting contracts, the commission shall weigh the characteristics
of a proposed combined heat and power project as follows:
    A. A weight of 30% must be given to the combined efficiency of the electricity
    generation and heat utilization of the project;
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    B. A weight of 40% must be given to the total cost of the project; and
    C. A weight of 30% must be given to the following factors:
        (1) The design of the project to meet the State's waste reduction and diversion
        priorities established by Title 38, section 2101, including, but not limited to, the
        proximity of the project to wood fuel derived from forest products manufacturing
        residuals;
        (2) The location of the project and whether electricity generated will meet a
        demand for electricity;
        (3) The net greenhouse gas emissions from the project, as determined in
        consultation with the Department of Environmental Protection;
        (4) The economic impact to the State from the project, including, but not limited
        to, jobs the project will create and maintain in wood fuel supply, at the electric
        generation plant and at the facility using the heat;
        (5) Whether the generation of electricity most effectively accounts for the changing
        seasonal time of day and other electricity usage characteristics associated with
        beneficial electrification as defined in section 10102, subsection 3-A over the
        duration of the contract; and
        (6) The effect on other Class I resources and Class IA resources, as defined in
        section 3210, subsection 2.
The commission may not direct an investor-owned transmission and distribution utility to
enter into a long-term contract under this chapter in which the contract price for energy
exceeds 10 cents per kilowatt-hour.
If at the close of the competitive bidding process under this subsection the commission
determines that no proposal meets the requirements of the solicitation or that an approval
is not in the public interest, the commission may reject all proposals and may open a new
competitive bidding process.
     6. Cost and benefit allocation. The commission shall ensure that all costs and
benefits associated with contracts involving investor-owned transmission and distribution
utilities entered into under this section are allocated to electricity consumers in accordance
with section 3210‑F.
    7. Contract payments. Contracts for capacity and related energy entered into
pursuant to this section must provide that payments will be made only after contracted
amounts of energy have been provided.
    8. Ratepayer protection. The commission shall ensure that mechanisms are
established to provide protections for ratepayers over the term of contracts entered into
pursuant to this section.
§3625. Rules
     The commission may adopt rules to implement this chapter. Rules adopted pursuant to
this section are routine technical rules as defined in Title 5, chapter 375, subchapter 2-A.
§3626. Tracking; biennial report
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    The commission shall develop and administer a system to register and track the
development of combined heat and power projects under this chapter and by January 15,
2023, and biennially thereafter, shall report to the joint standing committee of the
Legislature having jurisdiction over utilities and energy matters on the program and the
development of combined heat and power projects. The report must include, but is not
limited to:
    1. Combined heat and power project development. Documentation of the progress
of combined heat and power project development, including the number of such projects
in the State, the net generating capacity of those projects and the kilowatt-hours of
electricity purchased from those projects; and
    2. Program implementation; assessment; recommendations. Actions taken by the
commission to implement the program, an assessment of the effectiveness of the program
with respect to encouraging the sustainable development of combined heat and power
projects in the State and recommendations, including any necessary implementing
legislation, to improve the program.
§3627. Regulatory approvals; use of public resources
    1. Regulatory approval. The development, siting and operation of a combined heat
and power project is subject to all applicable regulatory reviews and approvals required by
governmental entities, including, but not limited to, municipalities and state agencies,
pursuant to law, ordinance or rule.
    2. Use of publicly owned land, water or facilities. Nothing in this chapter limits the
authority of the State or a political subdivision of the State to use publicly owned land,
water or facilities in the development and operation of a combined heat and power project
or to lease publicly owned land, water or facilities to other qualifying owners for the
development and operation of a combined heat and power project.
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Statutes affected: 
Bill Text LD 1202, HP 880: 5.1766
Bill Text ACTPUB , Chapter 604: 5.1766