Report Shows Maine is Less Competitive with Other States in Energy Costs

Fort Fairfield Journal, October 14, 2015

AUGUSTA, Maine – Governor Paul R. LePage today released a new report that shows high energy costs and Maine’s inability to best use its natural resources will continue having a devastating impact on Maine’s industrial and manufacturing sector, particularly mills and the forest products industry, limiting the state’s ability to prosper and compete in the global marketplace.

   The high cost of energy, as well as high wood prices, were major factors in the closure of Verso in Bucksport, the declaration of bankruptcy at Lincoln Paper and the pending shutdown of Expera Specialty Solutions in Old Town. Other mills around the state are also struggling with these high costs.

   “Maine must take action to be competitive in the marketplace. Politicians pretend to care about job creation and helping Maine people, yet they refuse to pass good public policy to lower energy prices,” said Governor LePage. “Meanwhile, hundreds of Maine families are losing their jobs and businesses are closing or relocating. In order to achieve greater economic prosperity, we must work together and accept the hard facts. This report is a reality check for the Legislature.”

   The report, Benchmarking Maine’s Forest Industry (linked below), was commissioned jointly by the Maine Department of Economic and Community Development and the Maine Department of Agriculture, Conservation and Forestry. It explores the challenges facing Maine’s Pulp and Paper industry compared to those in other states. Innovative Natural Resource Solutions, LLC of Portland used Maine-based data to compare Maine to those states highlighted in a recent Minnesota Forest Resources Council report.

According to the report:

• Maine has the highest industrial electric price;
• Maine has the highest industrial natural gas price;
• Maine taxes are among the highest as a percentage of GDP (tied with Minnesota); and,
• Maine wood costs are some of the highest in the United States.

   Despite the Legislature’s inaction, the Governor is committed to work within the authority of the Executive Branch to address and implement strategies to reduce energy costs. The Governor’s Energy Office Director Patrick Woodcock will continue the regional process to achieve a unified regional agreement to expand natural gas pipeline capacity into the region.

   In 2014, The New England States Committee on Electricity (NESCOE) made significant progress toward reaching an agreement to bring additional natural gas pipeline capacity, as well as additional electric transmission from Canada and northern Maine, into the region. The six-state coalition’s work is continuing, and Maine will be taking a leadership role toward finalizing an agreement for additional energy infrastructure.