Sec. C-1. 35-A MRSA §§3210-C and 3210-D are enacted to read:
§3210-C. Capacity resource adequacy
1. Definitions. As used in this section, unless the context otherwise indicates, the following terms have the following meanings.
A. "Capacity resource" means any renewable capacity resource, nonrenewable capacity resource or new interruptible, demand response or energy efficiency capacity resource.
B. "Interruptible, demand response or energy efficiency capacity resource" means a resource that has demand response, interruptible or energy efficiency capacity recognized by the commission.
C. "New" as applied to any capacity resource means a capacity resource that:
(1) Has an in-service date after September 1, 2005;
(2) Was added to an existing facility after September 1, 2005;
(3) For at least 2 years was not operated or was not recognized by the New England independent system operator as a capacity resource and, after September 1, 2005, resumed operation or was recognized by the New England independent system operator as a capacity resource; or
(4) Was refurbished after September 1, 2005 and is operating beyond its previous useful life or is employing an alternate technology that significantly increases the efficiency of the generation process.
D. "Nonrenewable capacity resource" means an electric generation resource other than a renewable capacity resource.
E. "Renewable capacity resource" means a renewable resource, as defined in section 3210, subsection 2, paragraph C, except "renewable capacity resource" does not include:
(1) A generator fueled by municipal solid waste in conjunction with recycling; or
(2) A hydroelectric generator unless it meets all state and federal fish passage requirements.
2. Policy. It is the policy of this State:
A. 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% by 2017 and that, to the extent possible, the increase occur in uniform annual increments;
B. To reduce electric prices and price volatility for the State's electricity consumers and to reduce greenhouse gas emissions from the electricity generation sector; and
C. To develop new capacity resources to reduce demand or increase capacity so as to mitigate the effects of any regional or federal capacity resource mandates.
3. Commission authority. The commission may direct large investor-owned transmission and distribution utilities to enter into long-term contracts for:
A. Capacity resources; and
B. Any available energy associated with capacity resources contracted under paragraph A:
(1) To the extent necessary to fulfill the policy of subsection 2, paragraph A; or
(2) If the commission determines appropriate for purposes of supplying standard-offer service pursuant to section 3212. If contracts are entered into pursuant to this subparagraph, the contracts must be treated as standard-offer service contracts pursuant to section 3212.
The commission may direct large 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. To the greatest extent possible, the commission shall develop procedures having the same legal and financial effect as the procedures used for standard-offer service pursuant to section 3212 for large investor-owned transmission and distribution utilities.
The commission may enter into contracts for interruptible, demand response or energy efficiency capacity resources.
Capacity resources contracted under this subsection may not exceed the amount necessary to ensure the reliability of the electric grid of this State or to lower customer costs as determined by the commission pursuant to rules adopted under subsection 10.
Unless the commission determines the public interest requires otherwise, a capacity resource may not be contracted under this subsection unless the commission determines that the capacity resource is recognized as a capacity resource for purposes of any regional or federal capacity requirements.
4. Priority of capacity resources. In selecting capacity resources for contracting pursuant to subsection 3, the commission shall apply the following standards.
A. The commission shall select capacity resources that are competitive and the lowest price when compared to other available offers for capacity resources of the same or similar contract duration. The commission shall consider the cost of the capacity and the cost of related energy. The commission shall, by rules adopted pursuant to subsection 10, establish a methodology for calculating and considering the cost of related energy for capacity-only offers.
B. Among capacity resources meeting the standard in paragraph A, the commission shall choose among capacity resources in the following order of priority:
(1) New interruptible, demand response or energy efficiency capacity resources located in this State;
(2) New renewable capacity resources located in this State;
(3) New capacity resources with no net emission of greenhouse gases;
(4) New nonrenewable capacity resources located in this State. The commission shall give preference to new nonrenewable capacity resources with no net emission of greenhouse gases;
(5) Capacity resources that enhance the reliability of the electric grid of this State. The commission shall give preference to capacity resources with no net emission of greenhouse gases; and
(6) Other capacity resources.
5. Contract term. A contract entered into pursuant to subsection 3 may not be for more than 10 years, unless the commission finds a contract for a longer term to be prudent.
6. Competitive solicitation process and contract negotiation. For purposes of selecting potential capacity resources for contracting pursuant to subsection 3, the commission shall conduct a competitive solicitation no less often than every 3 years if the commission determines that the likely benefits to ratepayers resulting from any contracts entered into as a result of the solicitation process will exceed the likely costs. Following review of bids, the commission may negotiate with one or more potential suppliers. When only one bid has been offered, the commission shall ensure that negotiations are based on full project cost disclosure by the potential supplier. The commission shall negotiate contracts that are commercially reasonable and that commit all parties to commercially reasonable behavior.
7. Disposition of resources. A large investor-owned transmission and distribution utility shall sell capacity resources purchased pursuant to subsection 3 or take other action relative to such capacity resources as directed by the commission.
8. Cost recovery. The commission shall ensure that a large investor-owned transmission and distribution utility recovers in rates all costs of contracts entered into pursuant to subsection 3, including but not limited to any impacts on the utility's costs of capital. A price differential existing at any time during the term of the contract between the contract price and the prevailing market price at which the capacity resource is sold must be reflected in rates and may not be deemed to be imprudent.
9. 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 capacity and related energy have been provided.
10. Rules. The commission shall adopt rules to implement this section. In adopting rules, the commission shall consider the financial implications of this section on large investor-owned transmission and distribution utilities. Rules adopted under this subsection are major substantive rules as defined in Title 5, chapter 375, subchapter 2-A. The commission may not enter into or direct any large investor-owned transmission and distribution utility to enter into any contract pursuant to this section until rules are finally adopted under this subsection.
The commission shall adopt by rule a long-term plan for electric resource adequacy for this State to ensure grid reliability and the provision or availability of electricity to consumers at the lowest cost.
After final adoption of rules under this section, the commission shall take any necessary action within its authority under this Title to support achievement of the objectives of the plan.
Rules adopted under this section are major substantive rules as defined in Title 5, chapter 375, subchapter 2-A.
Sec. C-2. 37-B MRSA §742, sub-§2, ¶B, as amended by PL 2001, c. 353, §5, is further amended to read:
B. Upon the issuance of an energy emergency proclamation and after consulting with the Executive Department, State Planning Office, the Governor may exercise all the powers granted in this chapter, except as specifically limited by paragraph C. The powers of the Governor include, without limitation, the authority to:
(1) Establish and implement programs, controls, standards, priorities and quotas for the allocation, conservation and consumption of energy resources;
(2) Regulate the hours and days during which nonresidential buildings may be open and the temperatures at which they may be maintained;
(3) Regulate the use of gasoline and diesel-powered land vehicles, watercraft and aircraft;
(4) After consulting, when appropriate, with the New England governors and upon the recommendations of the Maine Public Utilities Commission, regulate the generation, distribution and consumption of electricity;
(5) Establish temporary state and local boards and agencies;
(6) Establish and implement programs and agreements for the purposes of coordinating the emergency energy response of the State with those of the Federal Government and of other states and localities;
(7) Temporarily suspend truck weight and size regulations, but not in conflict with federal regulations; and
(8) Regulate the storage, distribution and consumption of home heating oil.; and
(9) If the energy emergency was caused by a lack of electric grid reliability in this State resulting from insufficient capacity resources, take appropriate action, in consultation with the Public Utilities Commission, to procure sufficient capacity resources including generation capacity and interruptible, demand response or energy efficiency capacity resources.
Sec. C-3. Public Utilities Commission resource plan. The Public Utilities Commission shall adopt the resource plan required under the Maine Revised Statutes, Title 35-A, section 3210-D in accordance with the following schedule.
1. Outline and strategy. By March 1, 2007, the commission shall establish an outline or procurement strategy for the resource plan and provide the outline or procurement strategy to the joint standing committee of the Legislature having jurisdiction over utilities matters for its review and comment.
2. Final resource plan. By March 1, 2008, the commission shall submit to the Legislature provisionally adopted rules establishing the resource plan.
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