Industrial Energy Consumer Group v. Public Utilities Commission

The Maine Supreme Judicial Court upheld a Maine Public Utilities Commission (PUC) order regarding the allocation to ratepayers of utilities’ costs related to power supply obligations and State energy programs, including “net energy billing” (NEB), a renewable energy incentive program. The PUC determined costs should be allocated to each class (residential, commercial, industrial) according to the class’s overall load share and that NEB costs should be recovered within each rate class through a fixed customer charge that did not change based on power usage. The PUC concluded that a fixed customer charge for NEB cost recovery was appropriate because everyone benefits from climate change mitigation policies, and a usage-based charge would result in some NEB program participants paying nothing. The court found that the PUC rationally concluded that NEB costs were not a component of traditional transmission and distribution service for which costs are allocated based on cost of service. The court also rejected the argument that rate design could not be based on the principle that all users benefit from climate change policies. The court found that the Maine Legislature “expressly requires the Commission to consider policies to reduce greenhouse gas emissions.” The court also concluded that the appeal was timely and not barred by collateral estoppel and that the allocation and rate design did not violate State statutes. The court declined to consider the argument that the Federal Power Act preempted the order because this issue was not raised before the PUC.