Mainebiz

V O L . X X I N O. X I I E mera Maine, the Bangor-based electricity transmission and dis- tribution utility serving 154,000 customers in eastern and northern Maine, is pushing high-efficiency heat pumps as a viable alternative to oil heat — saying they would greatly reduce annual heating costs for thousands of homeowners and small businesses, cut greenhouse gas emissions and pump more money into the state's economy. "Shifting heating load from oil to electric heat pumps reduces energy consumption by greater than 50%," the company states in its April 10 fil- ing with the Maine Public Utilities Commission. Emera argued that a heat pump reduces carbon emissions by approximately 80%, decreases reli- ance on foreign oil and promotes U.S. energy security and provides another heating source "for rural customers that do not, and are unlikely, to have access to natural gas infrastructure." Under its proposal, Emera Maine would provide heat pumps designed specifically for cold climates to eligible customers with no upfront charge — thereby removing the cost barrier for customers in Aroostook, Hancock, Piscataquis, Washington and Penobscot counties who may be unable or reluctant to invest in an oil heat alternative. Emera would own the heat pumps and would hire outside contractors to install and service them; in turn, it would charge participat- ing customers a separate "heat pump service and equipment rate" on top of an electric bill that would include a discounted rate for the electricity used to power one or more heat pumps. Customers wanting to purchase their heat pump(s) at a later time can do so, but would be charged a price based on the unit's depreciated value. Even with the monthly equipment rate and higher electricity usage fac- tored in, the company estimates that participating customers would save, on average, between $400 and $600 a year on their heating costs. "We have a target goal of 50,000 heat pumps being installed over the next 10 to 15 years in our service area," says Gerry Chasse, vice chairman of Emera Maine's board of directors, who recently turned over the reins as president and COO to Alan Richardson in order to take on the new role of leading the utility's initiatives to implement smart grid technologies as well as advance the "electrification" of transportation and heating. Opponents say Emera's plan is 'unfair' Two trade groups — the Maine Energy Marketers Association and the Plumbing, Heating, Cooling Contractors Association of Maine — have been granted intervenor status by the PUC and already have voiced oppo- sition to Emera Maine's plan. In their initial filings, both parties characterized the proposal as unfair competition that will "substantially and directly" impact the business interests of heating fuel companies selling oil, propane, biofuels and wood pellets as well as private con- tractors who sell and service heat pumps. "Emera will compete with MEMA members using unfair advantages stem- ming from its status as the utility and its existing relationship with customers," attorney David Herzer of the Portland law firm Norman, Hanson & DeTroy writes in his May 11 petition seeking intervenor status for the trade group that includes 130 heating oil and propane companies. Herzer, who uses similar language in writing the PHCC petition, states Emera's "free financing" and "spe- cial rate for heat pumps" gives the utility "an unfair, direct competitive advantage over non-utility providers." He also chal- lenges Emera's envisioned customer benefits as being "insubstantial in some instances, and largely illusory, in others." e PUC also granted interve- nor status to the Office of the Public Advocate; Natural Resources Council of Maine; Efficiency Maine Trust, James C. LaBrecque, owner of Flexware Control Technology, a Bangor company that manufactures temperature control devices for residential and commercial environments; and Troy Williams, a Bangor-based heat pump installer. In a June 1 procedural order, PUC's hearing examiner Leslie Raber highlights an issue central to Emera Maine's case — namely, whether the heat pump rate program is a "pilot program" or a "core utility service" under Maine statutes that would be subject to PUC's oversight. Chasse's rebuttal Chasse says "it's a bit disingenuous" for MEMA (formerly known as the Maine Oil Dealers Association) to challenge Emera's heat pump initiative, since one of its leading members, Dead River Co., offers its own discount on top of the state rebate as an incentive for customers thinking of heat pumps as an option for both heating and air conditioning. Similarly, he says, Emera Maine uses contractors certified by Efficiency Maine to install its heat pumps, a group numbering more than 400 and growing. "e vast majority of install- ers are very supportive of the program," he says, adding that the unit price for the installed heat pumps is set by the market, not by Emera. Finally, he says the utility's plan is an effort to build on lessons learned in what he describes as the company's "very suc- cessful" pilot program in the winter of 2012-13, which enrolled 1,000 custom- ers of Bangor Hydro and Maine Public Service (which merged in January 2014 to become Emera Maine), and included on-bill financing, a $600 rebate on the purchase of a heat pump and a reduced electric rate during the heating season. "We demonstrated the technology would work in Maine's cold climate," he says. Credence for that assertion is provided by EMI Consulting, a Seattle- based firm providing energy industry research and analysis to utility companies and other clients nationwide, which evaluated Emera Maine's heat pump pilot program. Its final report, issued Gerry Chasse, vice chairman of Emera Maine's board of directors, wants to make it easier for the utility's customers to install high-efficiency heat pumps as a way of saving on their heating costs. P H O T O / JA S O N P. S M I T H Debate over heat pumps Emera's proposal before PUC faces opposition B y J a m e s M c C a r t h y F O C U S J U N E 1 5 , 2 0 1 5 20

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