The Center Square | by Christian Wade | March 15, 2022
(The Center Square) – Rising energy costs fueled by record high inflation and a tight labor market has Maine lawmakers pitching plans to ease the pain on the state’s consumers.
One proposal, filed by Senate President Troy Jackson, D-Allagash, would create a $1,000 tax rebate for residential utility customers and a $2,500 tax rebate for businesses with “high energy usage.”
Jackson said skyrocketing energy costs are “making it much more difficult for working families, older Mainers and small businesses to keep their lights on and heat their homes or businesses.” He said the state government needs to provide relief for inflation-wary residents.
“Maine people shouldn’t have to make decisions about whether to confront sub-zero temperatures or risk an energy bill, whether for electricity or oil, so high that it might prevent them from paying for other essentials like food and medication,” he told members of the Legislature’s Taxation Committee during a hearing on the bill Tuesday.
Jackson’s proposal has the support of the state’s two largest utilities, Versant and Central Maine Power, which both testified in support of the bill during Tuesday’s hearing.
Kathleen Newman, CMP’s director of government affairs, said the company supports the plan “because it covers both residential and commercial customers and will not have an adverse effect on other ratepayers.”
“Delivering meaningful relief for customers impacted by increased standard offer energy costs is important,” Newman told the panel. “Targeting that relief equitably to those who are disproportionately impacted by the increases, as this bill proposes to do, is an improvement over flat, ratepayer-funded payments.”
Business groups also support the proposal, which they say will help alleviate the inflationary squeeze on Main Street retailers and others who are feeling the pain.
“Electricity rates are increasing alongside payroll, salary, and benefits plus workers’ compensation and insurance increases, on top of delivery surcharges and increased fuel costs,” said a joint statement in support of the bill from the Maine Grocers & Food Producers Association and the Retail Association of Maine. “These businesses are at a loss; they’re struggling to absorb the costs while being sensitive to how much additional price increases can be absorbed by the customers.”
Jackson didn’t identify a source of funding for the tax rebates, but notes that the state is flush with surplus tax revenue that could help offset the costs of the new program.
The price for natural gas and home heating oil is soaring amid supply chain issues and the highest inflation in 40 years, which is putting a squeeze on New England energy consumers amid a colder-than-normal winter. Russia’s invasion of Ukraine has made the problem worse, pushing fuel prices to record levels.
Consumer advocates warn that the increased gas and heating oil prices will have a major impact on low-income households that already have trouble keeping up with expenses.
Gov. Janet Mills, a Democrat, says her administration is also offering relief to residents with proposals to provide $750 direct payment checks and property tax relief in a supplemental budget plan.
Michael Allen, associate commissioner of Tax Policy at the Department of Administrative and Financial Services, told the Taxation Committee that the Mills administration is “focused on providing relief to Maine residents and businesses who are faced with ongoing pandemic costs, inflation, and increased energy costs – including high electricity prices.”