Do Solar Farms Dream of (Electric-enabling) Sheep?

I've just returned from our summer vacation road trip, where we visited Montreal and then swung through Maine to spend some time with my family. We had a lot of kitchen table conversations during our visit and I quizzed everyone about the "No on Pine Tree Power" signs I was seeing everywhere, but the conversation I will remember the longest was about sheep.

My grandfather is turning 97 in a few weeks. He still lives on his farm and still has sheep in the barn. A former large animal veterinarian and highly-regarded sheep breeder, his steady supply of Corriedale lambs helped my brother and I clinch 4-H victories every year we competed. It wasn't even fair, honestly. On this side of my family almost everyone is a farmer at some level, though none are making their entire living that way.

We were having lunch with my aunt when an unexpected guest joined us: the editor of a local independent farm journal who had sheep on the brain. He was there to talk to her about revitalizing the state association of sheep breeders, which has gone defunct in recent years. My ears perked up when solar farms entered the conversation. The potential symbiosis between sheep breeders and solar farm owners is a win-win: sheep and goats are extremely efficient at keeping weeds and undergrowth in check, which can offer solar farm owners a low-cost maintenance solution while  supplying grazing pasture for the animals.

Being able to contribute something of value to this discussion about sheep was an unexpectedly-emotional moment for me. I moved away from home over 20 years ago and have struggled to reconcile my identity ever since. Not only are there real, actionable things I can do to support this effort, but it got me thinking about how we could be helping farmers when we design bidding credits for the upcoming BOEM auction for offshore wind areas in the Gulf of Maine. We're going to get into that here, but first I want to offer a brief rundown of the incredible energy transition story that has been playing out in Maine over the past 5 years.

Maine as a Microcosm of the Energy Transition

Supreme Court Justice Louis Brandeis is credited with popularizing the phrase that states are "laboratories of democracy." The idea behind this sentiment is that with a legal framework that delegates significant authority to state governments, the US has 50 states that are able to experiment with different policy ideas. What has been happening with energy policy in the State of Maine offers a fascinating example of how this can play out, with some tremendous successes and failures from which other governments can learn.

1. Transmission - enough ink has been spilled explaining how transmission has become the single most important bottleneck holding back the energy transition. Maine became ground-zero for the battle to expand transmission with the New England Clean Energy Connect project, a hotly-contested transmission project that would deliver hydro electricity from Canada to Massachusetts. A two-part series from The Maine Polis podcast offers more background, but there are two things you should know about this project: a ballot initiative was used to halt the project for several years while legal challenges played out (and appear to have resolved in the project's favor thus far), and the knock-down drag-out fight between supporters and opponents leading up to the vote cost nearly $100 million. It's fair to say that the magnitude of this spend itself contributed to negative public sentiment about the transmission line and will cast a shadow over future transmission projects in the state. We're going to come back to the ballot initiative tactics and spending in a moment.
2. Heat pumps - Maine's heat pump program is an unmitigated success. Governor Mills set a target in 2019 to install 100,000 heat pumps throughout the state by 2025, which boasts a mere 600,000 households. The state blew through the finish line on this goal a full two years ahead of schedule, and lifted its ambitions to 175,000 heat pumps by 2027. Efficiency Maine senior program manager Andy Meyer enumerates all of the program's successes in an episode of Maine Environment: Frontline Voices. State-level rebates combined with an installer training program that has qualified over 700 new installers have delivered real results. I was astonished by how many heat pumps I saw while driving around the state. Considering that many of these homes used either propane or heating oil, this is a huge win for climate and energy affordability.
3. Community Solar - this one is a mixed bag. Legislation in 2019 paved the way for a Net Energy Billing (NEB) program, which incentivized broader deployment of rooftop solar and helped create innovative community solar ownership opportunities. According to experts on another episode of Maine Environment: Frontline Voices, the policy drove a 7X increase in solar deployment across the state and has helped more individuals access the benefits of solar net metering even if they don't own their homes. Unfortunately, the policy also created too-generous subsidies for larger scale commercial and industrial (C&I) ownership of larger solar facilities and lost revenues from the incumbent utilities are being recovered across the entire base of ratepayers. While the average Central Maine Power customer has bills increase by $60/month over the past 2 years due to natural gas prices, a separate rate adjustment approved in July will add up to $9/month to bills as a result of the NEB program. According to podcast guest Rebecca Schultz, the C&I portion of the program is responsible for 84% of those costs. Compromise legislation passed in the 2023 session is expected to address the program's flaws while preserving the NEB structure.
4. Utility ownership - the ballot initiative rears its head again. This November, Maine voters will decide whether Maine's incumbent utilities - Central Maine Power (CMP) and Versant - should be combined into a consumer-owned nonprofit entity called Pine Tree Power. The tension between the Investor Owned Utility (IOU) model and their monopoly power has been building steadily, but inflation and the cost of living crisis is bringing this tension to a head. Pine Tree Power referendum campaign manager Al Cleveland points out in an episode of WERU Community Radio podcast Power for the People that "foreign-owned" CMP and Versant posted a collective $187 million in profit last year, while 10% of Maine households received disconnection notices from their local utility. CMP and Versant have already spent $27 million to oppose the measure and proponents expect to be outspent 100-1. From my time in Maine I can attest that the only messaging most folks up there are seeing is opposition funded by the incumbent utilities, who are saturating the airwaves and blitzing roadsides with "No on Pine Tree Power" signs. If past is prologue, spending big may not matter, and public sentiment toward the incumbent utilities is antagonistic at best. The Consumer Owned Utility (COU) would be governed by a two-part board. Prospective board members would declare their candidacy in January 2024 for a nonpartisan election to be held in November 2024. The elected board members would then appoint additional board members to ensure sufficient expertise to govern the COU appropriately. Over the subsequent 3-4 years, the board would negotiate the purchase price with the utility companies, but if an agreement cannot be reached a court would be brought in to decide. A competitive bidding process would select a private management company to manage the operations of the new COU. The acquisition would be financed via low-interest debt secured against the physical transmission and distribution assets, with payments recovered in the ratemaking process like any utility investment.

The Next Wave: Offshore Wind

Maine isn't resting on its progressive energy laurels. This legislative session also saw the passage of a landmark offshore wind procurement bill, which obligates Maine utilities to procure 3,000 megawatts of offshore wind energy by 2040.  Governor Mills vetoed the first version of the bill due to union labor requirements that she deemed too strict - two of the largest construction companies in Maine with deep experience in the wind industry are non-union shops. Union presence in Maine is less pervasive that other Northeast states, with laws that sit between "right to work" and pro-union approaches to labor.

The proponents of this legislation were clearly taking notes from the way other states have rolled out their offshore wind industries, with some smart improvements on their processes. Affordability is the clear focus of their approach - the bill paves the way for shared transmission procurements in collaboration with other states, does not mandate cable landing points in the State of Maine or any specific technology requirements, nor does it require the use of specific ports or local content thresholds. That is not to say that the bill neglects the more qualitative and economic development benefits that offshore wind can bring to the state. The Governor's Energy Office is directed by the bill to prepare and evaluate solicitation documents that consider economic benefits and demonstrate responsible diversity, equity, and inclusion and stakeholder engagement plans. There are also important incentives included in the plan to encourage development outside of Lobster Management Area 1 to minimize impacts on Maine's lobster fishing industry. However, the legislation provides the flexibility to award no contracts should the proposals not be deemed cost effective to Maine ratepayers.

Better Bidding Credits

Maine's next task, while preparing to draft solicitation criteria, is to provide feedback to the federal government on their Gulf of Maine leasing plans. The state has a tremendous opportunity to capture more economic value from offshore wind through federal bidding credits. These credits allow a portion of a developer's winning bid on an offshore energy area to be directed toward local investments to benefit the state.

I have a radical proposal to make: these credits should be structured in a way to encourage investment in parts of the state further inland. Maine's economy is highly geographically-segregated, with 78% of GDP and population concentrated in coastal or southern counties. Often forgotten are the nearly 400,000 people who live in more rural parts of the state, who are the most economically-disadvantaged and have been left behind as the economy has transitioned away from historic paper and textile industries. These areas are struggling with energy reliability, overburdened by energy costs, and are losing their agricultural heritage year after year as family farms fight to survive. Maine should be the first state to propose bidding credits that would support their farming and agricultural heritage, through grants to University of Maine agricultural programs and their Co-operative Extension offices, contributions to farming associations, and support for sustainable land management practices.

"Salt of the earth" seems a phrase custom made for Mainers, and the offshore wind industry can help support earth as well as salt. These small inland farming communities are an essential part of Maine's identity, what makes the state feel special and a world apart. After decades of being left behind by globalization and commercial consolidation, they deserve to benefit as new industries come to the state.