Energy program shut down after questions raised about politics, effectiveness
A program funded by a $3 million government grant to market home energy retrofits in Maine abruptly shut down its operation late last week.
Records show that almost six months into its first year of the no-bid contract under the grant, the Maine Green Energy Alliance had signed up only 50 households for energy retrofits, but had promised in its contract to have 1,000 signed up in 12 months.
An investigation by the Maine Center for Public Interest Reporting into Maine Green Energy Alliance’s operation and performance revealed that Efficiency Maine, a state agency charged with identifying ways to save on energy costs, was asked in 2009 by a top aide to former Gov. John Baldacci to include a funding request by Maine Green Energy Alliance in a larger grant proposal to the U.S. Department of Energy, despite misgivings by some agency officials.
During the grant process, the Sierra Club questioned MGEA’s inclusion in the master grant, and according to an Efficiency Maine e-mail, MGEA set aside $250,000 in its first-year budget to make community donations to quiet objections.
MGEA founder Thomas Federle, a former counsel to Baldacci, said politics and influence played no part in his organization being included in the state’s grant and subsequently getting the no-bid contract.
Interviewed on Thursday about the Center’s findings, Adam Lee, board chairman of Efficiency Maine, said, “We are looking very, very carefully at what they’re doing, because we have a fiscal responsibility to make sure the money is being spent efficiently.”
That same day — and just a few days before the next meeting of the board — the Alliance board killed the project.
The Efficiency Maine board had approved funding up to $1.25 million of the $3 million grant with an option for two more years, although the final one-year contract was for $1.1 million. As of the last accounting given to the Center, the Alliance had spent $356,000 on retrofitting projects since the contract was signed last year. MGEA has agreed to return unspent funds to the state to be used for rebates to Maine homeowners who are retrofitting their homes through a program run directly by Efficiency Maine. The money is expected to fund more than 1,000 home-energy savings programs, Efficiency Maine Executive Director Michael Stoddard said.
Federle worked as chief legal counsel for Baldacci from June 2005 to December 2006. In October 2008, Federle and Michael Mahoney, who succeeded him as Baldacci’s top lawyer, joined forces to open a law and lobbying firm in Hallowell. In late summer 2009, Federle was asked to work with a task force formed by Baldacci to forge a solution to the long-standing conflict over a trash incinerator in Biddeford owned by Casella Waste Systems.
Federle said he was asked to handle regulatory and financing issues to upgrade the incinerator to provide low-cost heat and power to consumers, construct a recycling facility in Westbrook, and offer weatherization services to local residents.
A “huge challenge,” said Federle, was “how are we going to pay for all of this.”
Enter the federal government.
In September 2009, U.S. Energy Secretary Steven Chu announced a $454 million stimulus program called “Retrofit Ramp-Up,“ that Chu said would “open new energy efficiency opportunities to whole neighborhoods, towns and, eventually, entire states.”
“When I read it, I couldn’t believe it. It looked like it was written for this task force,” said Federle.
But there was heavy competition for the federal money: The state also planned to apply for the grant.
The state’s proposal focused on making loans for residential upgrades.
In mid-November 2009, Federle contacted John Brautigam, director of the energy programs at the state Public Utilities Commission, about having Biddeford’s proposal adopted into the state’s.
Brautigam wasn’t convinced. The next day, he wrote an e-mail to Maine State Housing Authority head Dale McCormick:
“I am not seeing how their overall project fits with this,” wrote Brautigam, “but I see some connection with their idea of residential neighborhoods.”
Federle said the state “didn’t want a competing application.” He said he told state officials, “We have no intention of standing down.”
The DOE’s proposal deadline was Dec. 14. Over the next several weeks, staff at state agencies debated the merits of including the Biddeford proposal versus the strength of one unified proposal.
Ian Burnes, a PUC program manager, reviewed Federle’s proposal and wrote in a Dec. 7 e-mail to state officials, “It seems too late to consider” the Westbrook recycling facility work “as part of our grant.” Burnes also had written in an earlier e-mail to Brautigam that the Westbrook facility “will eat the entire grant.”
Nevertheless, when the $75 million state grant proposal was sent off on Dec. 14 to the Department of Energy, it included $6.6 million for the Maine Green Energy Alliance.
Karin Tilberg, a staff member in Baldacci’s office, had intervened.
In a Dec. 11 e-mail from Brautigam to the Public Utilities commissioners — Jack Cashman, Sharon Reishus and Vendean Vafiades (all Baldacci appointees) — Brautigam wrote:
“Yesterday we received a specific request from the Governor to find a way to include the Biddeford/MERC task force package in the proposal. … Last night and this morning we have adjusted the $75 million proposal to include a sub-grant of $6.6 million to support the work recommend (sic) by the task force. We have been working closely with Tom Federle on this. … Although it strays a bit from the core mission of building retrofits, I think this sub-grant will be fairly considered by the DOE.”
Tilberg said last week that she didn’t have a precise memory of the conversation.
“I am fairly certain I communicated with him in some manner about the desire to seek funding for this project if it had merit,” said Tilberg. But Tilberg said, “It was not a hard ask.”
“I’m sure it was bigger for them than it was for me,” she continued. “In any message I made, any communication I had with Mr. Brautigam, it’s standard practice to make sure that the person understood that it would need to, that they could use their discretion and judgment that there was merit and justification for including it.”
Baldacci, who left office on Jan. 4, has not established a public office and does not have a published number. Attempts to reach him through the state Democratic Party and his former spokesman and others were not successful.
Brautigam said he already had warmed to the idea of including the Alliance proposal.
“I went from being sort of like kind of protective of our own concept to having an open mind about it, listening to different people’s input on what this concept could bring,” he said. “The governor’s request was certainly something we took very seriously. Obviously, when you work for state government, when the governor says you need to do something, you pay attention.”
Federle then wrote the text for the governor’s letter of support for the entire state proposal, which was reviewed and approved by Tilberg.
The letter heaped praise on the Alliance portion of the proposal, even though it represented less than 10 percent of the total amount requested.
There was only one problem: In January, the Biddeford project fell apart.
“The whole thing blew up,” said state Sen. Barry Hobbins, who was a task force member. Biddeford Mayor Joanne Twomey had pulled out of the project, saying the entire plan was “putting lipstick on a pig” and accusing the Alliance of greenwashing what essentially was a project to get Casella stimulus money for its trouble-some incinerator.
In late February, Sue Inches of the State Planning Office wrote Brautigam that she was getting questions about the grant. “I understand … the Green Energy Alliance piece is falling apart and will be withdrawn from our proposal. … We should touch base about this.”
Brautigam shot back an e-mail saying, “Please do refer people to me, and I will handle it. And please don’t tell people that the MGEA proposal has fallen apart and will be withdrawn. Who told you that?”
In April the feds announced Maine had been awarded $30 million of the $75 million it requested. The feds had included the Alliance in the grant.
Brautigam left his state job in early March, when the program he ran officially was reincarnated as “The Efficiency Maine Trust” and Portland attorney Michael Stoddard was hired to run it. So it was Stoddard’s job to figure out what to do about the Alliance part of the grant.
It wasn’t an easy thing to do. Staff at Efficiency Maine largely had concluded that Federle and the Alliance had no concrete plan at that point.
“Do they think they’re just free to design any program they want in 4 towns that they pick?” wrote Stoddard in a May 16 e-mail to Efficiency Maine staffer Andrew Meyer. “(A) Would that be a good thing? (B) Is that what we said in the proposal to DOE?”
Meyer responded, “I didn’t get the impression that they had a plan with players, roles, action items, or budget.”
Stoddard, in turn, got tough with Federle in a subsequent e-mail:
“What I am concerned about, generally, is that beyond the basic concept of working closely with towns/communities, you guys are making this up as you go along. … And meanwhile, I immediately have to submit a revised proposal and budgets to reflect what you are going to do with a $3 million no bid sub-grant.”
Despite his reservations, Stoddard kept Federle and the Alliance in the grant, cutting their take down to $3 million from the original $6.6 million.
In June, the Alliance hired Seth Murray as executive director. But Federle continued to represent it in public, for example at a late October board meeting of the Efficiency Maine Trust.
The plan was that the Alliance would complement Efficiency Maine’s loan program by working with towns — Buckfield, Scarborough, Old Town, Hampden, Belfast, Yarmouth, Cumberland and Topsham — to get them to adopt the ordinances to participate in the program and by convincing homeowners to do upgrades.
The Alliance, said Stoddard, would “hold customers’ hands through the process.”
But documents show that Stoddard still had problems to deal with.
One was that members of his staff and the public were beginning to question why the Alliance was getting so much money to do work that the agency itself was already doing, as were other groups, including an effort of environmental and religious groups called “Green Sneakers.”
In a presentation to staff, Meyer questioned the Alliance’s qualifications, stressed the “awkward appearances” of hiring “Gov. Baldacci’s former counsel” and argued that the agency’s outreach money could be more effectively spent through a competitive bidding process.
Ann Goggins, chairwoman of Falmouth’s energy commission, said she told Stoddard she believed the Alliance was diverting money that should be spent on winterizing homes.
“The MGEA didn’t seem to fill an essential role in getting it there. It looked like it was an entity in search of money.”
Stoddard’s solution, written in an e-mail to staffers Meyer and Elizabeth Crabtree, was to have the Alliance pay off critics such as the Sierra Club: “Confidentially, we’ve gotten them to put about $250k into their Year 1 budget which they will use for sub-granting to community organizing/outreach program. This should take Opportunity Maine and Sierra Club off our backs …” Sierra Club officials in Maine said they never got any money from the Alliance.
Stoddard then asked the Efficiency Maine Trust board — all Baldacci appointees — to authorize the no-bid contract with the Alliance. The board insisted that the Alliance be given a one-year, $1.25 million contract with an option for the other two years and additional $2 million.
It’s that contract that the Alliance will now abandon.
Is Lee concerned that it appears that political favoritism may have pushed the state to use taxpayers’ money unwisely?
Lee said that while he doesn’t believe politics was behind the state’s contract with Federle and the Maine Green Energy Alliance, “I think the way politics works often doesn’t look good from the outside.”
Naomi Schalit is executive director and senior reporter for the Maine Center for Public Interest Reporting.