Money from New England grid operator could be used to promote electric vehicle subsidies in Maine

Yahoo

07-03-2025

Mar. 6—Maine could gain more than $2 million from New England's electricity grid operator to help pay for electric vehicle subsidies through a proposal in the state Legislature.
The measure would allow Maine to use funding from one of several electricity markets operated by ISO-New England, the region's grid operator based in Massachusetts. It is part of a larger effort to expand the use of zero-emissions transportation. Businesses that buy and sell electricity and are accepted as bidders in ISO's marketplace auction can promote energy efficiency measures to help reduce demand for power.
Efficiency Maine, the state's quasi-state agency that promotes energy efficiency, taps the ISO's market and other funding sources to offer rebates to buyers of electric heat pumps. Legislation sponsored by Democratic Sen. Henry Ingwersen of York would extend that to EVs.
Funding for EV rebates has already been budgeted at $2 million and ISO-New England would provide another $2 million or more in a 50-50 split between EV and electric heat pump funding of $4 million to $5 million a year, Michael Stoddard, executive director of Efficiency Maine Trust, said Thursday.
Efficiency Maine Trust had spent about $4.4 million before the program was suspended last November when funding was exhausted, he said.
Since the start in 2019 of the EV rebate program, funding has come from settlements in a lawsuit with Volkswagen and the New England Clean Energy Connect transmission line and a one-time appropriation from the state's general fund. Over the course of this program, Efficiency Maine says it has provided rebates for more than 6,000 vehicles.
EV rebates are still available for low-income applicants with money from the NECEC settlement, Stoddard told members of the Legislature's Energy, Utilities and Technology Committee at a public hearing.
Low-income Mainers — those who receive heating assistance; Supplemental Nutrition Assistance, or food stamps; Temporary Assistance for Needy Families; or MaineCare medical assistance — are eligible for EV incentives of between $2,500 and $7,500, depending on whether they're buying a battery EV, a plug-in hybrid EV or a used vehicle.
If the legislation succeeds, Efficiency Maine Trust programs will increasingly focus on low- and moderate-income residents, businesses and government agencies that face barriers paying the higher upfront costs of EVs, Stoddard said. "The rebates really do make a difference," he said.
The transportation sector accounts for about half of the carbon emissions in Maine, according to the state climate plan, and reaching emission reductions targets without expanding EV use will be a stretch, environmentalists say. Maine law requires the state to reduce greenhouse gas emissions by 45% by 2030 and by at least 80% by 2050.
Stoddard and Ingwersen said EVs can reduce electricity rates because the increased electricity use can spread fixed costs over a larger volume of sales, modestly reducing per kilowatt-hour rates.
EVs, with fewer mechanical parts than gasoline-powered vehicles, are less costly to operate "and we are confident the marketplace is moving in this direction over the next decade," Stoddard said.
"This is not a regulatory approach. This is not a stick," he said. "This is a carrot."
Nearly 17,500 battery electric vehicles and plug-in hybrid electric vehicles are on the road in Maine, according to an analysis by Atlas Public Policy. That's about 12% of the state's goal of putting 150,000 light-duty battery electric and plug-in hybrid vehicles on the road in Maine by 2030.
Maine's Climate plan says the state needs to more quickly increase the number of electric vehicles and plug-in hybrids, and improve public transportation and land use planning for new development that helps Mainers avoid or reduce driving.
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