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An Act To Improve Efficiency Maine Trust Programs To Reduce Heating Costs and Provide Energy Efficient Heating Options for Maine's Consumers
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 35-A MRSA §3210, sub-§9, ¶B, as amended by PL 2011, c. 314, §1, is further amended to read:
 
B. The commission shall collect alternative compliance payments made by competitive electricity providers and shall deposit all funds collected under this paragraph in the Energy Efficiency and Renewable Resource Fund established under section 10121, subsection 2 to be used to fund research, development and demonstration projects relating to renewable energy technologies and to fund rebates for cost-effective renewable energy technologies.
Sec. 2. 35-A MRSA §10103, sub-§2, as enacted by PL 2009, c. 372, Pt. B, §3, is amended to read:
 
2. Governance; board.   The trust is created as a body corporate and politic and a public instrumentality of the State and is governed by the independent Efficiency Maine Trust Board, established in Title 5, section 12004-G, subsection 10-C, in accordance with this section.
 
A. The board consists of the following 9 voting members:
 
(1) The director of the Governor's Office of Energy Independence and Security;
 
(2) The director of the Maine State Housing Authority; and
 
(3) Seven members appointed by the Governor, reviewed by the joint standing committee of the Legislature having jurisdiction over energy matters and approved by the Senate. Among these 7 members must be persons who adequately represent the interests of commercial energy consumers, industrial energy consumers, small business energy consumers, residential energy consumers and low-income energy consumers; among these members must be persons with knowledge of and experience in financial matters and consumer advocacy and who possess substantial management expertise or knowledge of or experience with conservation fund programs, carbon reduction programs or energy efficiency or climate change policy. The requirements of this subparagraph may be met through the appointment of one or more persons who satisfy more than one of the requirements, as long as at any one time the 7 members include among them members who adequately represent the identified interests and who possespossess the required knowledge, expertise and experience.
 
Appointed trustees serve 3-year terms. If an appointed trustee is unable to complete the term, the Governor shall appoint a replacement for the remainder of the unexpired term.
 
B. The board shall electGovernor appoints a chair,. The board shall elect a vice-chair, a secretary and a treasurer from among the members. Each officer elected by the board serves for a one-year term and is eligible for reelection.
 
C. A majority of the trustees constitutes a quorum.
 
D. The board may elect an executive committee of not fewer than 5 trustees who, in intervals between meetings of the board, may transact such business of the trust as the board may authorize from time to time.
Sec. 3.  35-A MRSA §10104, sub-§12  is enacted to read:
 
12.  Budget.     The budget for the trust must be submitted as part of the budget for State Government in accordance with Title 5, sections 1663 to 1666. The trust shall present its budget recommendations contained in any budget legislation to the joint standing committee of the Legislature having jurisdiction over energy matters. The joint standing committee of the Legislature having jurisdiction over energy matters shall review the trust’s recommendations and make recommendations to the joint standing committee of the Legislature having jurisdiction over appropriations and financial affairs. Within 30 days after enactment of the budget, the trust shall amend the triennial plan if needed to conform to the approved budget.
Sec. 4. 35-A MRSA §10108, as enacted by PL 2009, c. 372, Pt. B, §3, is repealed and the following enacted in its place:
§ 10108. Liability
 
1.  Bond.     All officers, directors, employees and other agents of the trust entrusted with the custody of funds of the trust or authorized to disburse the funds of the trust must be bonded either by a blanket bond or by individual bonds with a minimum limitation of $100,000 coverage for each person covered by the bond or bonds, or equivalent fiduciary liability insurance, conditioned upon the faithful performance of their duties. The premiums for the bond or bonds must be paid out of the assets of the trust.
 
2.  Indemnification.     Each trustee must be indemnified by the trust against expenses actually and necessarily incurred by the trustee in connection with the defense of any action or proceeding in which the trustee is made a party by reason of being or having been a trustee and against any final judgment rendered against the trustee in that action or proceeding.
Sec. 5.  35-A MRSA §10110, sub-§2, ¶K  is enacted to read:
 
K.  The trust shall provide programs developed in partnership with energy providers, such as transmission and distribution utilities, to provide consumers with information on energy options to promote energy efficiency and increased use of alternative energy resources in the State.
Sec. 6.  35-A MRSA §10119-A  is enacted to read:
§ 10119-A. Efficient electric heating program
 
1.  Legislative finding.     The Legislature finds that the installation of efficient electric heating systems in buildings for the purpose of supplementing or replacing less efficient heating systems helps the State reduce its overall energy use and stabilize electric rates.
 
2.  Definitions.     As used in this section, unless the context otherwise indicates, the following terms have the following meanings.
 
A.  "Building" means a stand-alone structure or individual dwelling unit within a structure that is located within the State.
 
B.  "Lender" means any entity that provides loans to qualifying customers under the program. "Lender" includes the trust and transmission and distribution utilities.
 
C.  "Program" means the efficient electric heating program established by the trust under this section.
 
D.  "Qualifying customer" means the owner or operator of a building that meets the terms established by the trust for participation in the program.
 
E.  "Qualifying heating system" means an efficient electric space heating or water heating system that meets the standards established by the trust, including but not limited to heat pumps or similar technologies. "Qualifying heating system" includes associated weatherization.
 
3.  Program.     The trust shall develop and administer an efficient electric heating program to help qualifying customers supplement or replace less efficient heating systems within their buildings. The program must include loans for qualifying customers to finance the installation of qualifying heating systems for buildings that will result in a reduction in the use or more efficient use of energy within the building. The trust may allow the participation of any lender meeting the terms of the program, including the trust itself, and shall allow transmission and distribution utilities to provide loans as provided in subsection 8. As necessary, the trust shall assist in educating the public regarding the program.
 
The trust shall develop and administer the program using funds derived from assessments on transmission and distribution utilities under section 10110, subsections 4 and 5 to support cost-effective efficient electric heating pilot projects in cooperation with transmission and distribution utilities.
 
4.  Low-income customers.     To the extent funding is available under the program, a portion of the program must include loans or other assistance to low-income residential customers who are receiving public financial assistance to heat their dwellings.
 
5.  Loan terms.     Loans from each lender under the program must be established at a fixed rate for a period up to 15 years and must provide that the loans may be prepaid by a participating customer without prepayment penalty. Short-term loans must also be made available involving 6 months of interest-only payments.
 
6.  Installation of heating systems.     The trust shall ensure that qualifying heating systems installed under the program are installed by qualified installers and that any installer meeting the program qualifications may participate in the program.
 
7.  On-bill financing.     To facilitate the repayment of loans under the program, periodic financing payments to the lender may be included on the electric bill that is issued by the qualifying customer's transmission and distribution utility. Any administrative or other costs to the utility associated with on-bill financing, including any collection, delinquency or bad debt expenses, must be recovered and retained by the utility as part of the financing payments made by a customer participating in the program.
 
8.  Transmission and distribution utilities.     A transmission and distribution utility may provide loans through the program to qualifying customers for installation of qualifying heating systems for buildings receiving transmission and distribution service within the utility's service territory. The financing charges for such loans must be established by the utility, and the utility may earn a return on such loans based on the utility's weighted average cost of capital as established by the commission for the utility's distribution service. Any difference between the utility's weighted average cost of capital and any financing payments received from customers related to loans issued by the utility under this section must be funded by amounts collected by the trust from the utility pursuant to section 10110.
 
9.  Rate-making treatment.     The costs and earnings of a transmission and distribution utility attributable to participating in the program must be accounted for as direct costs and earnings of the utility for rate-making purposes, and such activities must be considered part of the regulated activities of the utility pursuant to section 713.
 
10.  Rulemaking.     The commission and the trust shall adopt any rules necessary to administer this section. Rules adopted under this subsection are routine technical rules pursuant to Title 5, chapter 375, subchapter 2-A.
Sec. 7. 35-A MRSA §10121, as amended by PL 2011, c. 314, §§2 to 4, is further amended to read:
§ 10121.Energy Efficiency and Renewable Resource Fund
 
1. Funding for energy efficiency and renewable resource research and development; community demonstration projects; rebates for cost-effective energy efficiency and renewable energy technologies.   The trust by rule shall establish and administer a program allowing retail consumers of electricity to make voluntary contributions to fund energy efficiency and renewable resource research and development, to fund community demonstration projects using energy efficiency and renewable energy technologies and to fund rebates for cost-effective energy efficiency and renewable energy technologies. The program must:
 
A. Include a mechanism for customers to indicate their willingness to make contributions;
 
B. Provide that transmission and distribution utilities collect and account for the contributions and forward them to the trust;
 
C. Provide for a distribution of the funds, which on an annual basis may not exceed the average of the annual funding distributed in fiscal year 2007-08 to fiscal year 2009-10, through a competitive bid process to the University of Maine System, the Maine Maritime Academy or the Maine Community College System for energy efficiency and renewable resource research and development;
 
D. Provide for a distribution of the funds through a competitive bid process to Maine-based nonprofit organizations that qualify under the federal Internal Revenue Code, Section 501(c)(3), consumer-owned transmission and distribution utilities, community-based nonprofit organizations, community action programs, municipalities, quasi-municipal corporations or districts as defined in Title 30-A, section 2351, community-based renewable energy projects as defined in section 3602, subsection 1 and school administrative units as defined in Title 20-A, section 1 for community demonstration projects using energy efficiency and renewable energy technologies;
 
E. Provide for an annual distribution of 35%25% of the funds to the Maine Technology Institute to support the development and commercialization of energy efficiency and renewable energy technologies; and
 
F. Provide rebates for cost-effective energy efficiency and renewable energy technologies as determined by the trust.; and
 
G.  Provide all funds not expended under paragraphs A to F to energy efficiency projects on a competitive, cost-effective, fuel-neutral basis.
 
2. Fund established.   There is established the Energy Efficiency and Renewable Resource Fund, referred to in this section as "the fund." The fund is a nonlapsing fund administered by the trust. All funds collected by the trust pursuant to subsection 1 must be deposited in the fund for distribution by the trust in accordance with subsection 1. The trust may seek and accept funding for the program established pursuant to subsection 1 from other sources, public or private. Any funds accepted for use in the program established pursuant to subsection 1 must be deposited in the fund. Funds not spent in any fiscal year remain in the fund to be used for the purposes of this section. Any interest earned on funds in the fund must be credited to the fund.
 
The trust may allocate funds pursuant to subsection 1, paragraphs C, D and, F and G from the fund to most effectively meet the objectives of the triennial plan pursuant to section 10104, subsection 4.
 
3. Report.   The trust shall report by December 1st of each year to the joint standing committee of the Legislature having jurisdiction over utilities and energy matters on the fund. The report must include:
 
A. A description of actions taken by the trust pursuant to subsections 1 and 2 during the prior 12 months;
 
B. An accounting of total deposits into and expenditures from the fund during the prior 12 months; and
 
C. A description of any research and development or community demonstration project that received a distribution from the fund during the prior 12 months, including its objectives, current status and results.
 
4. Rulemaking.   The trust shall adopt rules to implement this section. The rules must include, but are not limited to:
 
A. Selection criteria for the competitive bid process pursuant to subsection 1, paragraphs C and D, including, but not limited to, the cost-effectiveness of the project or development and the likelihood that the renewable energy technology will be adopted on a broader scale in this State; and
 
B. Qualification criteria for rebates for energy efficiency and renewable energy technologies pursuant to subsection 1, paragraph F, including, but not limited to, cost-effectiveness and quality assurance requirements.
 
Rules adopted under this subsection are routine technical rules pursuant to Title 5, chapter 375, subchapter 2-A.
Sec. 8.  35-A MRSA §10123  is enacted to read:
§ 10123. Home heating equipment rebate program
 
1.  Home heating equipment rebate program.     The trust shall administer a home heating equipment rebate program. To the extent that funds are available through the trust's funding resources, an owner or tenant of residential property located in the State is entitled to a rebate for installation of qualified, efficient home heating equipment as defined by the trust. The rebate must be available for both space heating and water heating systems, including but not limited to efficient oil and gas boilers, electric heating systems and biomass, solar and geothermal systems. The rebate must be available for replacement and supplemental heating equipment. Equipment must be installed by a qualified installer. The rebate for qualified home heating equipment must be 5% of the purchase price, not to exceed $500. In the case of a newly constructed residence, the rebate must be available to the original owner or occupant.
 
2.  Energy audit requirement.     To qualify for a rebate under this section, an owner or tenant of residential property must demonstrate to the satisfaction of the trust that an energy audit has been completed.
 
3.  Limitation to residents of State.     Participation in the program established in this section is limited to residents of the State.
 
4.  Funding.     The trust shall identify up to $1,000,000 from existing resources to fund the rebate program established in this section. Additional funding may be derived from existing funding sources available to the trust, including the Regional Greenhouse Gas Initiative Trust Fund, the Energy Efficiency and Renewable Resource Fund, electricity and natural gas system benefit charges, forward capacity market revenues and other sources proportional to the applicable technology employed.
 
SUMMARY
This bill amends the Efficiency Maine Trust Act to change the governance and budget structures; to place an equal emphasis on programs regarding alternative heating energy sources and energy efficiency; to establish cost-effective heating rebates and loan programs; and to expand a voluntary renewable resource fund to include energy efficiency.