Draft Report of the Governor’s Pre-Emergency Energy Task Force

Letter of Transmittal:

Dear Governor Baldacci, July 15, 2008

Our nation, region and state have become dangerously dependent on unreliable, insecure and expensive foreign oil and natural gas. As the fossil fuel bill in the State of Maine escalates to nearly 8 billion dollars, it is clear that there is a dramatic need to change the energy culture and consumption patterns in our state, region and nation. The combustion of fossil fuels contributes to climate change, damages the environment, threatens public health, undermines our economic vitality, erodes national security and diminishes our quality of life. As energy prices continue to rise to historic levels in 2008, with benchmark crude recently reaching $144.00/Bbl on the NYMEX, it is clear that this stark energy reality has dramatically increased the economic vulnerability of Maine’s citizens businesses and industries.

Accordingly, on November 16^th, 2007, you issued an Executive Order establishing the Pre-Emergency Energy Task Force on Escalating Home Heating Oil and Diesel Fuel Prices. Pursuant to that Executive Order, the Governor’s Office of Energy Independence and Security convened an interdisciplinary group of energy industry leaders, consumers, public officials, not-for-profit executives, environmental advocates, housing experts, trucking and wood-products representatives and utility executives to pursue this critical issue in accordance with the following principles:

1. Undertake the actions specified in the recently adopted Maine Energy Emergency Plan that shall include, but not be limited to, situation assessment, inter-governmental communications and coordination, implementing a proactive vision of public information and readiness for emergency communications, shelter and travel;

2. Analyze specific steps that can be immediately taken to reduce the deleterious effects of high heating oil and diesel prices on Maine citizens and businesses and recommend to the Governor and the Legislature measures to help alleviate the safety risks and the burdens these escalating prices are having on Maine people.

3. Once preparedness steps and immediate actions have been taken to reduce the harmful impacts of the escalating energy prices, the Task Force is to explore long-term solutions for the heating oil and transportation sectors and to explore mechanisms for increased energy efficiency programs for homes and businesses that heat with liquid fuels.

Pursuant to the November 16^th, 2007 Executive Order and in accordance with your recent Directive to reconvene the Pre-Emergency Energy Task Force, issued on June 11, 2008, please find the enclosed initial findings, conceptual frameworks for financing and preliminary recommendations of the Task Force convened to address the ever-increasing cost of petroleum-based transportation and heating fuels in the State of Maine.

In conclusion, I would like to thank the Governor, his staff and all the dedicated members of the Governor’s Pre-Emergency Task Force for their dedication and support during this critical thirty day study period.

Respectfully Submitted,

John M. Kerry, Chairperson,

Governor’s Pre-Emergency Energy Task Force

Executive Summary:

Purpose:

Our nation, region and state have become dangerously dependent on unreliable, insecure and expensive foreign oil and natural gas. As the fossil fuel bill in the State of Maine escalates to nearly 8 billion dollars, it is clear that there is a dramatic need to change the energy culture and consumption patterns in our state, region and nation. The combustion of fossil fuels contributes to climate change, damages the environment, threatens public health, undermines our economic vitality, erodes national security and diminishes our quality of life. As energy prices continue to rise to historic levels, with benchmark crude recently reaching $144/Bbl on the NYMEX, it is clear that this stark energy reality has substantially increased the economic vulnerability of Maine’s citizens, businesses and industries.

The establishment of the Pre-Emergency Energy Task Force and this report is the result of the Governor’s Executive Order of November 16, 2007 and the Governor’s subsequent Directive of June 11, 2008 assigning the Task Force the responsibility to investigate the escalating heating oil, gasoline and diesel prices in the State of Maine. The purpose and duties of the Task Force are as follows:

General Findings:

The following Draft Report lays out a number of initial findings, conceptual frameworks for financing and preliminary recommendations of the Task Force that pertain to the immediate and long-term energy needs of the state as provided by each sub-committee including the Emergency Management; Emergency Transportation; (Passenger and Freight Transportation); Finance, Emergency Shelter and Housing; Keep Me Warm Fundraising; Energy Industry Markets and Infrastructure; Energy Efficiency and Conservation; Emergency Communications and Intergovernmental Relations. Individual sub-committee reports are included in the appendices.

There are two main causes for an energy emergency. The first is a supply problem caused by a disruption or curtailment in the energy supply chain, typically initiated by a storm, an accident or some other unforeseen event. The second is when the high cost of energy disrupts the consumers’ ability to purchase fuel. Due to the rapid increase in energy costs, many Mainers are currently experiencing the second type of energy emergency, since they are no longer able to afford the high cost of fossil fuels. Heating and transportation fuel costs have increased 100% in the last five years, now constituting between 10% - 20% of many Mainer’s monthly incomes; this is up from 5% just a few years ago.

Since Maine families and businesses are spending nearly 8 billion dollars on fossil fuels, are 99.9% dependent on petroleum products to fuel their transportation vehicles and are 80% dependent on oil to heat their homes; the state and private industry must be ready to assist those in need as more and more Mainers are no longer able to afford the fossil fuels that have traditionally been more affordable and readily available.

Federal, State and local governments must assume a leadership role and be ready to act immediately to form public/private partnership with energy industry and private-not-for-profits to address the unprecedented escalation in the prices of heating oil and transportation fuels. All levels of government, in conjunction with the private sector, will need to increase and accelerate educational programs to inform Maine citizens to use our energy resources more efficiently.

In addition, these public/private partnerships will need to provide the people of Maine with the educational tools, technologies and financial mechanisms that will enable them to weatherize their homes and businesses, upgrade or fuel-switch their heating systems, invest in energy efficiency of all forms, become an energy technician and to start or invest in a new energy enterprise.

Due to the magnitude and scope of this rapidly escalating energy, environmental and economic crisis, the acute impacts on individuals, families and businesses are increasingly apparent to public officials and private citizens. To address this critical situation, the Governor’s Pre-Emergency Energy Task Force will undertake a highly visible public education and outreach program supported by an energy “internet web portal” on Maine.gov and a 24 hour/day, 7 day-a-week emergency “safety net”. This integrated informational and emergency response system is currently being developed and will be implemented by the Governor’s Task Force in conjunction with state, local and private sector officials.

Due to the high cost of centrally managed shelters and limited state financial and personnel resources, the best response to keep vulnerable Maine citizens safe, secure and warm in their own homes is to initiate a decentralized energy emergency response system. The Governor’s Office of Energy Independence (OEIS), in conjunction with the Maine Emergency Management Agency (MEMA), Maine Housing (MSHA) and other state and private organizations has been coordinating an effort to identify individuals or organizations in each community to keep people warm in their own homes.

In accordance with the State Energy Emergency Plan, the OEIS has been working with the Maine Municipal Association and other local organizations to encourage each county and municipality to develop an “Energy Emergency Plan” to assist in addressing an energy crisis in their local communities or region. Our preliminary findings indicate there is a need to develop or enhance regional energy emergency infrastructures and to establish clear protocols to foster integration and cooperation of energy emergency response efforts at the state and local levels. These efforts would be greatly advanced if individuals and organizations can be identified as “local volunteers” in a coordinated safety net system to personally assist their neighbors during an energy emergency.

As in other years, OEIS, in conjunction with MSHA and other state agencies, will continue to advocate for increased funding for weatherization and LIHEAP funding at the Federal level of government.

While the Maine Emergency Management Agency (MEMA) will not take a direct role in responding to an energy crisis that is caused by a rapid increase energy prices, it is prepared to respond to a severe supply disruption or disaster that may lead to a breakdown in public conveniences or necessities. If necessary and in accordance with the State Energy Emergency Plan, MEMA will initiate a Energy Emergency Task Force to provide information and advice on how to address an energy emergency through its customary continuum of phases of Emergency Management: Mitigation, Preparation and Response.

In accordance with the Comprehensive State Energy Plan, the Governor’s Office of Energy Independence is continuing to advance policies and programs that advance the development of clean, renewable energy resources, while reducing the State of Maine’s dependence on foreign petroleum products. It is clear that the citizens of Maine will remain vulnerable to the price fluctuations in the international petroleum and natural gas energy markets for decades to come if we do not heavily invest in energy efficiency and develop the innovative technologies and transportation/transmission infrastructures to accommodate clean renewable energy.

Subcommittee Initial Reports:

Keep Maine Warm Fundraising:

Findings:

There is a critical need to increase federal LIHEAP funding.

There is a need to supplement the federal LIHEAP funding with state and private donations.

Preliminary Recommendations:

The Governor and appropriate state and local officials contact the President and the congressional delegation advocating an increase in LIHEAP funding.

In collaboration with the United Ways and other charitable organizations, the Task Force will seek private funds for the Keep Me Warm fund from individuals, businesses,

individuals and philanthropic foundations.

Finance:

Preliminary Findings:

There are numerous public and private financial mechanism and programs available to assist individuals and businesses that wish to invest in energy efficiency. Unfortunately, there are many policy, informational, fiscal and regulatory barriers that preclude the adequate use of these programs, funds or financial mechanisms.

Preliminary Recommendations:

1. Develop an energy and financial information clearing house to direct

2. consumers to the appropriate resource;

3. Energy audits should be required of all borrowers and energy savings documented;

4. The state should consider amending any statutory or regulatory limitation that may inhibit providing financial assistance with energy costs;

5. Financial assistance should be provided to the poor and the middle class;

6. Significant investments should focus on long-term, sustainable energy savings;

7. Capital from Bonds and other financial mechanisms may be raised as long as there are acceptable revenue streams to pay for the borrowed funds;

8. Fame, the Maine Bond Bank, Maine Housing, DECD and other state and private financial institutions should work together on various projects;

9. Proceeds from state financial instruments and programs should be used to seed private investment funds for energy conservation and efficiency;

10. Implement financial and underwriting criteria used by MHEFFA/Maine Bond Bank/Maine Power Options for energy efficiency projects;

11. Use state generated funds to leverage creative financing mechanisms from the New Market Tax credit Projects through Coastal Enterprises, Inc.;

12. Use state/federal funds to insure, subsidize or buy-down interest rates for energy efficiency projects;

13. If bonding capacity is available, focus some funds on energy efficiency R&D;

14. Work closely with the DECD Environmental and Energy Technology Council (E-Tech);

15. Strengthen R&D and the commercialization of renewable technologies;

16. Provide increased financial assistance and energy support to Maine small businesses;

17. Create energy “Clusters” to stimulate energy related jobs and industries;

18. Create “Centers of Excellence” focused on energy;

19. Coordinate innovative projects with seed money from the Maine Technology Institute;

20. Coordinate R&D and innovative energy technologies with the various faculties of the University of Maine System;

21. Utilize Federal Community Development Block Grant (CDBG) funds for municipally and state initiated energy conservation and weatherization projects;

22. Train DECD regional directors and other local and state economic development directors to conduct energy audits and facilitate energy conservation and efficiency programs;

23. Work with the Maine Community College System, MSHA, Efficiency Maine and other energy experts to train a cadre of energy auditors and financial facilitators to assist businesses in Maine to conserve energy.

Transportation:

Preliminary Findings:

Access to transportation resources in Maine is a significant and ever-present challenge. This challenge is exacerbated by fiscal restraints, urban sprawl and the rural nature of the state.

Preliminary Recommendations:

A. Passenger Transportation:

1. Expand the existing GO Maine Program;

2. Increase the Go Maine data base available for rideshare;

3. Increase commuter vanpool participation;

4. Increase Park & Ride opportunities and education;

5. Increase the awareness of transit commuter benefits;

6. Utilize Variable Message Signs (VMS) to increase commuter awareness to conserve energy;

7. Increase options for telecommuting;

8. Increase Go Maine Staffing;

9. Conduct consumer surveys;

10. Provide fuel wise tips for the public;

11. Educate children about energy conservation;

12. Provide transportation demand management programs;

13. Consider four day work weeks to reduce transportation;

14. Create telecommuting and flex-time resource centers;

15. Allow Pay-as-you-drive insurance policies;

16. Create public/private partnerships with local bus companies;

17. Promote public transportation with free ride days;

18. Encourage participation in the passenger rail system;

19. Purchase more passenger buses;

20. Rebuild passenger rail infrastructure;

21. Promote public transit-oriented development;

22. Develop regional approaches to transportation;

23. Explore local funding mechanisms for regional transportation systems;

24. Develop an alternative fuel infrastructure;

25. Develop greater fuel diversity for public transit systems;

26. Train more mechanics for public transit systems;

27. Promote no-idling and educational outreach programs;

28. Require smart growth policies are in place before large transportation investments are made;

29. Amend State parking requirements for siting state facilities to encourage public transportation;

30. Amend or enforce siting policies to recognize the qualitative benefits of rehabilitating neighborhood schools to reduce increases in transportation needs;

31. Utilize Transportation Management Associations (TMA’s) regionally to pool resources dedicated to Transportation Demand Management services;

32. Consider local or regional option taxes that allow municipalities or regions to enact sales tax add-ons to fund local transportation projects and pay operating costs of transit;

33. Encourage the use of alternative fuels such as compressed natural gas (CNG), liquid propane gas (LPG) and biodiesel;

34. Encourage local utilities and (CNG) refueling providers to expand the demand for and utilization of the CNG refueling infrastructure;

35. Work with the State and municipalities to increase the fleet of alternative fuel vehicles (AFV) and dual-fuel vehicles (DFV) and the infrastructure to support such vehicles;

36. Utilize CMAQ, CDBG and other financial resources to fund the incremental costs of (AFV);

37. Educate School Districts and other public entities to the value and availability of (AVF), especially school buses;

38. Develop greater fuel diversity for all state and municipal fleets;

39. Expand the training programs in Community Colleges and High 40. Schools to increase the number of qualified mechanics to work on (AFV);

41. Consider the reinstatement of the exemption from the sale or lease tax on the incremental cost of a clean fuel vehicle (CFV);

42. Expand the use of bicycles and the infrastructure to utilize them in urban areas;

43. Reduce vehicle miles traveled and increase vehicle occupancy:

Freight Transportation:

1. Provide relief to businesses that wish to connect to the railway system;

2. Provide a revolving loan fund to promote business connections to local rail systems;

3. Provide a truck efficiency tax incentives program to enhance energy efficiency for motor carriers;

4. Expand the DOT Industrial Rail Access Program;

5. Promote intermodal – freight/rail interconnections;

6. Expand rail roads into industrial parks;

7. Expand the use of anti-idling technologies and programs;

8. Promote Maine inter-modal ports such as Searsport, Bangor and Portland;

9. Promote a robust rail and intermodal transportation system in the state.

10. Locate new energy supplies in Maine seaports;

11. Expand container traffic at IMT-Portland;

Energy Efficiency and Conservation:

Preliminary Findings:

In order to create a more energy sustainable culture and in accordance with the State of Maine Comprehensive Energy Plan, it is imperative that the state form public/private partnerships to strengthen energy efficiency and conservation throughout the state.

Preliminary Recommendations:

1. Develop principles and programs that make energy efficiency measures available to all:

2. Make all energy efficiency programs available to all customers, regardless of energy type (natural gas, propane, oil etc.);

3. Promote energy efficiency programs for all customer classes i.e., low-income and middle-class; residential, commercial and industrial sectors;

4. Set a state-wide goal to reduce the energy consumption in the residential sector of 18%-30%;

5. Set a state-wide goal to reduce energy consumption in the commercial and industrial sectors by 10%;

6. Set a state-wide goal to reduce overall state energy consumption by 2%;

7. Develop long-term goals to implement substantial energy efficiency and weatherization programs throughout the state;

8. Create a more equitable distribution of financial resources for energy efficiency programs among the natural gas, electricity, heating oil and transportation sectors;

9. Create energy efficiency job clusters;

10. Provide financial assistance to the Maine Oil Dealers Association (MODA) for mom and pop oil dealerships;

11. Provide programs to keep all Maine citizens safe, secure and warm;

12. Provide broad-based educational programs to assist people with the technical and financial details of the existing energy efficiency programs;

13. Identify barriers for implementing energy efficiency programs in Maine;

14. Expand the cadre of trained energy efficiency experts in the State;

15. Explore the potential sources of funding of energy efficiency programs such as: GO Bonds; NORA Funds; RGGI Funds; System Benefit Charges from oil, natural gas and electricity; Gross Receipt Taxes; Community Development Block Grant Funds (CBDG); general fund monies; Federal appropriations; State Rainy Day Funds; review the availability of existing tax revenues from sales to commercial oil customers and the possibility of directing some gross receipt taxes to energy efficiency programs;

16. Review the energy efficiency program’s funding structures in the Eastern Canadian Provinces and other NE States;

17. Expand Federal Funding from the LIHEAP Program;

18. Develop a comprehensive, state-wide energy efficiency administrative entity to like Efficiency Maine, the Energy Carbon Savings Trust (RGGI Trust) similar to the ones established to administer or implement electricity and natural gas efficiency programs;

19. Develop an entity to oversee and integrate the planning, design, RFP procedures, evaluation and coordination of efficiency programs for all fuels;

20. Coordinate and conform the development of the integrated energy efficiency plans and programs with the Governor’s Office of Energy Independence Comprehensive State Energy Plan;

Emergency Management and Emergency Communications:

Preliminary Findings:

There is a need to increase communications and information regarding energy and energy emergencies to the general public and to local public officials.

There is a need to develop regional and local energy emergency action plans.

There is a need to increase communications between state and local officials regarding the coordination of actions during an energy emergency.

Preliminary Recommendations:

Since we are dealing with an energy crisis that has been caused by escalating energy prices, the Maine Emergency Management Agency will be monitoring the developments in conjunction with the Governor’s Office of Energy Independence and the other members of the Energy Resources Council. The support structure of the Federal Emergency Management Agency (FEMA) and the Maine Emergency Management Agency (MEMA) upon which we rely in times of emergency or natural disaster, are not designed to address an energy crisis of this kind. Should an energy emergency be declared by the Governor, or should supply disruptions occur causing major changes in normal civic operations, then the Governor’s Office of Energy Independence, in conformity with the State Energy Emergency Plan, would shift the responsibility for coordinating the emergency response to MEMA.

It is recommended that Emergency Communications be provided by local public and private officials to the maximum degree possible. It is believed that local charitable organizations working with the energy industry and local municipal and county officials are best suited to address local concerns, especially with the isolated elderly and poor families living in rural areas. As social service funds are constrained and the energy and financial crises increase, it will be imperative that a public education plan be devised to address the needs of the isolated elderly and sick. In addition, our experience suggests that long-term sheltering is expensive, counter to the independent cultural and character of Maine people and should be a solution of last resort. On the other hand, every town should consider designating a “Warming Shelter” to keep people warm and fed while affording temporary relief from the crisis.

In remote areas, where fossil fuel prices are often higher, weather is severe and travel difficult, transportation to and from the Warming Shelters could be provided by volunteers and emergency responders. It is recommended that local communities designate warming shelters and propose staffing patterns. Information regarding the warming shelters could be forwarded to 211 and public information and referrals regarding warming shelters and ancillary services could be addressed by 211.

It is recommended that the Attorney General’s Office be brought into the evaluation of the current situation and to discuss the various responsibilities and authorities regarding price gauging and what authority the Governor has under a declared emergency to influence prices or delivery protocols of fuel companies.

MEMA, in conjunction with the Governor’s Office of Energy Independence, the PUC and the other members of the Energy Resources Council, will continue to monitor the international, national and regional energy situation. In addition, MEMA will continue to make its facilities available to the Task Force for meetings and is prepared to suspend all normal functions to perform its Emergency Operations Center (EOC) functions in times of severe distress.

Housing and Emergency Shelter:

Preliminary Findings:

Currently, the federal and state governments are not adequately prepared to address the magnitude and scope of this very complex and pervasive energy emergency. In the short-term, the federal government, in conjunction with the states and private industry, has not provided the leadership and adequate fiscal resources (in a public/private partnership) to address the heating fuel and weatherization needs of the poor, the elderly, working families, small businesses and industry. In the long-term, the federal government, in collaboration with the states and private industry, will need to provide the leadership and the necessary funding (in a public/private partnership) and policy frameworks to address the needs of the poor, working families, small businesses and industry.

Preliminary Recommendations:

The primary goal of the Housing and Emergency Shelter Subcommittee is to keep people warm in their homes. Maine people are hard-working, independent, self-sufficient and proud of their traditional way of living on and close to the land. In years past, many Mainers, especially in rural areas, heated their homes and farms with wood. In recent years, most Maine residents and small businesses have become very dependent of expensive and insecure foreign petroleum products, with 80% heating with #2 heating oil and kerosene. Escalating heating, transportation and food costs have increased the economic vulnerability of many Maine citizens, especially the poor, the elderly, people living in rural areas and the sick. In response, the Housing and Emergency Shelter Subcommittee of the Task Force has recommended both a short-term and long-term solution to the escalating energy crisis.

Building upon the Governor’s Pre-Emergency Task Force Housing Subcommittee’s original decentralized response plan to an energy emergency, “Keeping People Warm at Home” and the emergency fuel assistance program “Keep Me Warm”, this winter teams in local communities will assess local resources and needs, create an action plan for response and inform (2-1-1) Maine and VolunteerMaine.org of local resources to meet energy emergency needs throughout all regions of the state. Education and communication through local and statewide media venues will direct people to help through (2-1-1) Maine. Keep Maine Warm will provide energy conservation tips and information on how to avoid energy emergencies.

A. Short-Term Plan Highlights: Winterize 2008-2009

Facilitated and coordinated through local helping agencies, each municipality or region will mobilize local teams to help people winterize their homes and connect needy neighbors with the resources they need. “Warm Kits” will be made available to neighborhood teams with the goal of winterizing up to 5,000 Maine homes in 2008. United Ways, senior community centers, municipal offices, community action agencies, faith-based organizations and civic groups such as Rotary and Kiwanis, among other will be engaged in this statewide mobilization and installation project. Local teams involved in these winterization efforts will also serve as neighborhood watch and support teams throughout the winter.

Winterize homes and check on neighbors
What: Form Neighborhood Teams
When: Summer and Fall 2008-2009
How: Organize teams via local and state clubs, charities, and faith-based organizations; individual teams sign-up at VolunteerMaine.org
Who: Neighbors taking care of Neighbors

6. What: Winterize 5,000 homes

7. When: Summer and Fall of 2008

8. How: Organize teams via local and state clubs, charities and faith-based organizations. Individuals and teams will sign-up with VolunteerMaine.org

9 Who: Neighbors will form local teams.

10. Costs: 5,000 Kits @ $60.00 = $300,000

B. Long-Term Plan: Weatherize all single and Multifamily Dwellings in Maine:

As gasoline and heating oil prices continue to escalate in the nation, region and state; it is imperative that the state form public/private partnerships with local municipalities, businesses and industry to make Maine more energy independent, while keeping our most vulnerable citizens safe, secure and warm. The nearly 500,000 home owners and renters in the State of Maine spend billions of dollars of their hard-earned money on heating their residences and driving to work. It has been estimated that the individuals and businesses in the State of Maine spend nearly 8 billion dollars on petroleum products, most of which are exported out of the state, costing the state additional revenues, economic development and jobs. In addition to undermining the State’s economic security, Maine’s dependence on foreign petroleum products contributes to Global Warming and Climate Change.

It has been estimated that weatherizing all 477,000 single-family homes and the more than 7,000 apartment buildings throughout Maine, over a ten year period, would reduce housing energy consumption by 18% and save Maine more than $1.7 billion. Prior to any winterization, energy audits will be conducted and financial analyses will be performed. In addition, the MSHA, in conjunction with Efficiency Maine, the CAPs and other energy-oriented educational institutions, will expand energy audit and energy efficiency training programs. This will enhance and build upon the pool of qualified energy efficiency installers and contractors. The Task Force is exploring various forms of financing to fund the short and long-term weatherization programs.

Long-Term Plan Highlights: Weatherizing 477,000 SingleFamilyHomes:

What: Weatherize 477,000 single-family homes

When: 2008-2018

Who: 500 Weatherization Crews

How: Grants and below market rate loans

Savings:

Average savings from weatherization of home is 18% (LIHEAP)

Average Household will save $712/year on oil at $4.60/BBL

and using 860 gallons/year

Total energy dollars saved on oil after weatherization of all single family homes in Maine = $1.6 billion.

Costs:

$4,200/ single family dwelling for weatherization

Explore revenue bond @ $2.4 billion

Subsidy required for grants and interest rate buy-down to 3.5% = $569 M

Total Cost of (bonds and subsidy) = $3 billion

Long-Term Plan Highlights: Multi-Family Buildings

Maine has over 50,000 multi-family housing units in 7,1000 properties with more than 4 units. At an average cost of $441/unit, to weatherize all multifamily housing of greater than 4 units in Maine would cost approximately $18Million, which would yield an estimated investment return of $113 Million in energy savings.

What: Weatherize 7,100 multi-family units

When: 2008-2009

Who: 4 weatherization crews

Savings:

Average savings = $441/unit

Total energy dollars saved on oil over 10 years assuming $4.60/gal = $113 M

Program Costs:

Revenue bonds = $3,000 per unit or $153M

Subsidy required = $360/unit

$18M needed to buy down the interest rate 3.5% on all units

Conclusion:

The nation, state and region are experiencing an affordability energy emergency caused by the complex international energy commodities and financial markets. Since the causes of the dramatic increases in the price of fossil fuels are international in scope and beyond our control, the findings and recommendations referenced in this report focuses the State’s attention on those areas we can reasonably identify and respond to with the fiscal, technical and personnel resources available to us. As these preliminary findings suggest, the state is inordinately dependent on expensive, insecure and dirty fossil fuels. The combustion of these fossil fuels not only reduces the State’s economic security by the export of nearly 8 billion dollars a year to foreign oil producers and refiners, it contributes to climate change, damages the environment, threatens the public health and undermines our economic vitality.

The Task Force Report is consistent with the vision of the State of Maine Comprehensive Energy Plan and the provisions of the recently adopted State of Maine Energy Emergency Management Plan. The Task Force, through a robust public/private partnership and dialogue, has conducted a situational assessment of the emerging energy emergency and has adequately fulfilled the purpose and duties enumerated in the Governor’s November 16, 2007 Executive Order and June 11, 2008 Executive Directive, which notes in part:

In conclusion, I would like to thank the Governor, his staff and all the members of the Governor’s Pre-Emergency Task Force for their cooperation and support during this critical 30 day study period.

Respectfully,

John M. Kerry,

Chair,

Governor’s Pre-Emergency Energy Task Force