Trends in Labour, Employment and Energy Policy in the State of Maine

The State of Maine is experiencing significant shifts in both labour and employment practices, as well as energy policy. In the realm of labour and employment, the pandemic-induced transition to remote work has become a permanent fixture, affecting the dynamics of the workforce in Maine and beyond. Moreover, there is a notable trend towards employee-friendly workplace cultures, policies and laws in the state. Simultaneously, Maine is grappling with critical energy policy updates. This article examines the key trends and legislative initiatives shaping labour, employment and energy policy in the State of Maine.

Labour and employment

Between post-pandemic workplace behaviours and current legislation, there are two noteworthy trends in the legal landscape for labour and employment in the State of Maine.

Temporary remote work is now permanent

One of the largest impacts of COVID-19 on employment was the transition to remote work. While the pandemic has been declared over, it has become clear that remote work, whether on a full-time or hybrid basis, is here to stay. Many employers in Maine are now allowing employees to work remotely as a matter of course, while other employers are allowing employees with disabilities to work remotely as a reasonable accommodation. A 2022 McKinsey & Company survey found that 80 million Americans are now engaged in remote work across all kinds of jobs, including traditionally “blue collar” jobs that formerly were expected to demand on-site labour, and that a flexible work environment is a top-three motivator for finding a new job. 

This trend, which has been felt nationwide, has had a particularly large impact in Maine and New England, where the concentration of smaller states makes it easier for employees to work in a different state than where the employer is located. In addition, in a tight labour market, some Maine employers are able to attract talent they otherwise could not by allowing employees to work remotely anywhere in the US, particularly during the cold winter months.

As a result of the increase in remote work, many Maine employers, sometimes unintentionally, have become multi-state employers. Because much of employment law is controlled by the law of the state where the employee works, this means Maine employers need to make sure that they are mindful of state laws relating to, for example, payroll taxes, workers’ compensation, unemployment benefits, leave laws, state anti-discrimination, harassment, and retaliation laws, pay transparency laws, and wage and hours laws. Conversely, employers with employees working in Maine need to make sure that they are mindful of, for example, the Maine Human Rights Act’s broad definition of protected categories for purposes of the anti-discrimination laws, Maine’s Equal Pay Act, Maine’s Whistleblowers’ Protection Act and Maine’s Earned Paid Leave law, which is one of the most progressive paid leave laws in the US. Employers that do not recognise and comply with applicable state laws may become subject to penalties and fines, which can be significant, as well as lawsuits.

General trend towards employee-friendly workplace cultures, policies and laws

In Maine, we are seeing a move towards employee-friendly workplace cultures and policies, as well as laws. With respect to cultures and policies, for example, we are seeing employers implementing policies allowing employees paid parental leave not required by law, signing onto benefit plans that include coverage for gender-affirming surgery and in vitro fertilisation, and agreeing to voluntarily recognise employee unions.

With respect to specific laws, beginning 1 January 2021, Maine employers must provide eligible employees with up to 40 hours of paid leave each year to be used by the employee for whatever reason, including vacation, illness or other personal obligations. In addition, beginning 1 January 2023, employers must pay employees all unused paid vacation time they have accrued upon employment termination – something that was previously controlled by employer policy.

Also, there are four bills currently pending in the Maine legislature that are worth noting.

• An Act to Increase the Limits on Awards for Compensatory and Punitive Damages Under the Maine Human Rights Act. This Act would significantly increase the statutory caps on awards for compensatory and punitive damages under the Act, which currently range from USD50,000 to USD500,000 depending on the size of the employer to USD100,000 to USD1 million depending on the size of the employer. This increase may lead to larger jury verdicts and/or larger settlement demands from plaintiff’s counsel. The Judiciary Committee was divided along party lines as to whether the Act should pass. A vote by the House and Senate is expected in June 2023.
• An Act to Ensure a Fair Workweek by Requiring Notice of Work Schedules. This Act would require that large employers with 250 or more employees worldwide provide advance notice to employees of work schedules and changes in work schedules, including providing new employees with a good faith estimate in writing of the employee’s expected minimum number of scheduled shifts per month to allow the employee to request a modification and providing current employees with two weeks’ notice of work schedules. While employers can subsequently change an employee’s schedule after the initial notification, they must compensate the employee for that change, with the amount of compensation depending on the amount of notice provided to the employee. The Committee on Labour and Housing was divided along party lines as to whether the Act should pass. A vote by the Maine Legislature is expected in June 2023.
• An Act to Amend the Maine Equal Pay Law by Prohibiting Pay Discrimination Based on Race. This Act expands the state’s equal pay law to prevent pay discrimination based on race as well as sex. The Act has been passed by both chambers of the Maine Legislature and is now heading to the Governor for potential signature.
• An Act to Implement the Recommendations of the Commission to Develop a Paid Family and Medical Leave Benefits Program. This Act would implement a paid family and medical leave benefits programme based on the recommendations of the Commission to Develop a Paid Family and Medical Leave Benefits Program established by the prior Maine Legislature. The programme would provide up to 12 weeks of family leave and up to 12 weeks of medical leave to eligible covered individuals, with the maximum weekly benefit amount capped at 120% of the state average weekly wage and 90% of the individual’s average weekly wage. The Act would require payroll contributions by employers to begin on 1 January 2025, with benefit claims to be processed beginning 1 January 2026. The Committee on Labour and Housing was divided along party lines as to whether the Act should pass. A vote by the Maine Legislature is expected in June 2023.

While remote work has transformed the employment landscape in Maine, compliance with state-specific employment laws is crucial. Meanwhile, as Maine moves towards employee-friendly workplace cultures, policies and laws, employers must stay informed and adapt to maintain compliance. By remaining in compliance with remote work and navigating the legal landscape effectively, Maine employers can attract and retain top talent while reaping the benefits of this new era of work.

Energy policy updates

The legislative and regulatory arenas are quite active as Maine advances its renewable energy goals and contends with tectonic shifts in the energy landscape. Current debate has focused on managing the influx of renewables onto the grid and deciding how these resources will be integrated into the existing regulatory and legal frameworks. Because Maine is one of the first states to grapple with many of these issues, decisions here will impact how other states shape energy policy going forward. Here is an overview of Maine energy policy updates in the State of Maine.

Net energy billing 2.0

In 2019, the Maine Legislature enacted a Net Energy Billing (NEB) programme designed to incentivise renewable energy projects by expanding eligibility to projects with up to 5 MW nameplate capacity. The resulting proliferation of solar projects rendered the NEB programme expensive to administer, and because utilities have been permitted to recover NEB expenditures through stranded costs (which ultimately flow to the ratepayers), there is a concerted effort to modify the programme to bring costs down.

The Maine Legislature is debating changes to the NEB programme and crafting legislation for the next iteration of the programme. There are currently two proposals that will be debated on the floor in the coming weeks.

• The first proposal, an Act Relating to Net Energy Billing and Distributed Solar and Energy Storage Systems (LD 1986), which received an “Ought to Pass” from the Energy, Utilities and Technology Legislative Committee (“EUT Committee”) on 7 June 2023, would:
1. for projects with a commercial operation date after 31 December 2024, limit participation in the kWH credit and tariff rate NEB programme to projects less than or equal to 1 MW;
2. require projects between 1-2 MW to reach commercial operation on or before 31 December 2024, and exclude entirely projects above 2 MW;
3. after 31 December 2023, limit participation in the tariff rate NEB programme to projects where generation resources are collocated with the NEB customers, and those customers are subscribed to 100% of the facility’s output;
4. require the Maine Public Utilities Commission (the “Commission”) to annually calculate cost and benefits of the programme and allocate each utility’s pro rata share of costs for the previous year based on total retail kilowatt-hour energy sales to ratepayers that pay net energy billing costs;
5. establish parameters for the Commission to competitively solicit and procure energy or renewable energy credits from resources that meet NEB eligibility criteria; and
6. direct the Commission to explore and analyse designs for programmes to reduce NEB costs and provide a report of its activities by 31 March 2024.

• The second proposal, an Act to Eliminate the Current Net Energy Billing Policy in Maine (LD 1347), which also received an “Ought to Pass” from the EUT Committee on 7 June 2023, would:
1. make the following changes to the kWh NEB programme beginning 1 September 2023:
1. limit to ten the number of customers with shared financial interest in a project who may participate and require that the resource be located on the same side of the meter as one of the ten customers; and at least 50% of associated RECs are allocated to that customer; and
2. place a 660 kW nameplate capacity limit on participating resources. Municipalities may participate with resources in excess of that limit as long as no more than 660 kW is used for NEB;
2. make the following changes to the kWh NEB and tariff rate NEB programmes:
1. allow the PUC to “periodically” review or alter the compensation that a customer with a financial interest in a DG resource may receive under the programme; and
2. allow the PUC to modify the requirements of the kWh and tariff rate NEB programmes to maintain eligibility for federal grants or subsidies that “benefit Maine ratepayers”; and
3. make the following changes to the tariff rate NEB programme beginning 1 September 2023:
1. limit participation in the programme to projects with less than 660 kW nameplate capacity; and
2. limit the number of customers who may share a financial interest in a project to ten and require that the project be located on the same side of the meter as one of the ten customers; and at least 50% of the associated RECs are allocated to that customer.

Offshore wind procurement

Offshore wind energy development is a top legislative energy priority for Governor Janet Mills and her administration. LD 1895 (the “Offshore Wind Bill”) aims to encourage the development of offshore wind in the Gulf of Maine and is currently working its way through the Legislature.

The proposed legislation establishes an offshore wind development programme within the Maine Public Utilities Commission and directs the Commission to:

• conduct one or more competitive solicitations for floating offshore wind projects beginning no later than 1 June 2026. Each solicitation must seek proposals for a minimum of 600 MW or “sufficient size to enable cost-competitive commercial-scale development”. Solicitations developed in co-ordination with other states or entities can be for less than 600 MW provided that the co-ordinated solicitation in the aggregate is sufficient to enable cost-competitive commercial-scale development. The proposed legislation requires selecting projects by attaching a weight of 80% to benefits to ratepayers and 20% to economic development, community benefits, and environmental and wildlife protection.; and
• conduct one or more competitive solicitations for proposals to develop and construct transmission projects or other electric infrastructure projects to facilitate offshore wind development.

The proposed legislation would establish The Fishing Community Protection and Low-Income Ratepayer Fund, which would be funded through “Submerged lands leasing operating fee payments” and other funds as appropriated. 80% of the fund’s disbursements would be used to provide grants to “developers, manufacturers of component parts and operators of floating offshore wind facilities” that have met certain criteria related to mitigating impacts on the fishing and lobstering industry. The remaining 20% would be used to aid low-income households.

There is still some uncertainty regarding the final terms of the legislation, particularly with respect to bid selection and weighting and protections for tribal resources, though the Bill is widely expected to pass when put to vote sometime in June.

This bill goes further than other renewable procurement on socially progressive issues, which has led to discussions around affordability.

Government-controlled power

An initiative to create a quasi-governmental electric transmission and distribution utility will appear on the ballot on 7 November 2023. This is part of a larger effort to facilitate a government takeover of Maine’s investor-owned transmission and distribution (T&D) utilities. The question that will appear on the ballot is: “Do you want to create a new power company governed by an elected board to acquire and operate existing for-profit electricity transmission and distribution facilities in Maine?”

The initiative would create the Pine Tree Power Company, which would replace the Central Maine Power (CMP) Company and Versant Power, Maine’s two primary electric T&D utilities. The Company would be governed by a 13-member board; seven members would be elected by voters, and six would be nominated by the elected board members.

The Pine Tree Power Company would be empowered to acquire CMP and Versant’s assets through exercise of its eminent domain authority, rather than a competitive bidding process. The costs associated with a public takeover of privately held electric utilities are unknown and would likely involve costly and lengthy litigation to determine just value, among other things.

“No blank checks” ballot initiative

A current measure that will likely appear on the ballot in November 2023 would require voter approval for state entities to take on more than USD1 billion of debt.

LD 1772 would require voter approval for certain state entities, municipal electric districts, electrification co-operatives or consumer-owned transmission utilities to incur a total outstanding debt that exceeds USD1 billion and require a statement from the State Treasurer to accompany the ballot question regarding the estimated cost of the increased debt.

The effect of the measure would be to require voter approval for the Pine Tree Power Company (discussed above) to issue debt to acquire the assets of the existing investor-owned T&D utilities.

Energy storage

Proposed legislation sets a goal for the development of at least 300 MW of storage capacity by the end of 2025 and at least 400 MW by the end of 2030.

There is current legislative and regulatory focus on how energy storage supports Maine’s renewable energy goals. Energy storage may be a cost-effective tool for managing grid reliability, especially with more intermittent resources (wind, solar) coming online.

Unlike generation assets, it is not statutorily prohibited for utilities to own and operate energy storage facilities, though the level of future utility involvement in storage is the subject of current debate.

Maine’s T&D utilities, Versant Power and CMP, have both proposed energy storage projects, though exactly how these projects will be owned and regulated remains to be seen.

In conclusion, Maine's energy policy updates reflect challenges in the energy landscape. As one of the first states to work through these issues, Maine’s decisions are poised to impact energy policies in other states, making it a crucial state to watch in shaping the future of energy regulation.