A Hallowell lawyer who was once Gov. John Baldacci’s counsel set up a “green” nonprofit organization that got a three-year, $3 million no-bid contract in 2010 through a state agency with the help of the governor.

That contract, designed to help Maine residents sign up for energy audits and retrofits, is not coming close to delivering on the results it promised.

Late Friday, Jan. 28, the state agency that awarded the contract and the group founded by the Hallowell lawyer jointly announced the program was being shut down and the unspent money returned to the state agency, Efficiency Maine Trust.

That announcement came after the Maine Center for Public Interest Reporting had completed interviews on an expose of the program that it had planned to publish Tuesday, Feb. 1.

The Center had interviewed the lawyer, Thomas Federle, a former counsel to former Gov. John Baldacci, and officials of the state agency overseeing the program between Friday, Jan. 21 and Wednesday, Jan. 26.

Thursday, Jan. 27, the board of Federle’s group, called Maine Green Energy Alliance, voted to end the grant and return unused funds to the state agency.

Friday, Jan. 28 at 10:30 p.m., the state agency and the Alliance sent out a joint press release announcing that decision. (The text of the press release is at the end of this story).

The Center had spent weeks examining documents, email and grant proposals related to the contract to a “green” nonprofit set up by Federle and was to publish its findings Tuesday, Feb. 1.

Among the Center’s findings were the state agency that gave the contract, Efficiency Maine, was requested by a top Baldacci aide to include Federle’s group in a larger grant proposal to the federal Department of Energy, despite misgivings by some agency officials.

Federle said politics and influence played no part in his organization getting included in the state’s grant and subsequently getting the award. “I don’t think that had any direct bearing on the Maine Green Energy Alliance getting the grant,” said Federle. “We had worked like dogs to be partners in that application. We won the day on it, people agreed we added value.”

The Center also found that, almost six months into its first year of the contract, the Alliance had signed up 50 households for energy retrofits; it had promised in its contract to have 1,000 signed up in 12 months.

At that rate, the Alliance itself said it would cost $2,700 per household to get homeowners to the point of signing up for a retrofit, which then can cost thousands of dollars.

Interviewed on Thursday, Jan. 27 about the Center’s findings, Adam Lee, the 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 — a few days before the next meeting of the board — the Alliance board killed the project.

Its press release said the Alliance board had voted Thursday “to wind down the activities of MGEA under a contract with the Efficiency Maine Trust.”

The press release quoted the executive director of Efficiency Maine, Michael Stoddard: “MGEA’s decision to end its project is a hard one, but it is the right one …”

The money the Alliance will return to state agency will be used for rebates to Maine homeowners retrofitting their homes through a program run directly by Efficiency Maine.

The press release stated the rebate program was running out of money and the unspent funds from the Alliance that are being returned will fund more than 1,000 “home energy savings programs.”

The release did not specify how much of the contract will be returned. The Efficiency Maine trust had approved funding up to $1.25 million for the first year of the $3 million, three-year contract, although the final contract was for $1.1 million. As of the last accounting given to the Center, the Alliance had spent $356,000.

Governor’s staffer intervenes

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 of 2009, Federle was asked to work with a task force formed by Baldacci to forge a solution to the longstanding 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.

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, 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 email to Maine State Housing Agency 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 various 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 email to state officials that “it seems too late to consider” the Westbrook recycling facility work “as part of our grant.” Burnes had also written in an earlier email to Brautigam that the Westbrook facility “will eat the entire grant.”

Nevertheless, when the $75 million state grant proposal was sent Dec. 14 to the Department of Energy, it included $6.6 million for the Maine Green Energy Alliance.

Karin Tilberg, a staff member in Gov. John Baldacci’s office, had intervened.

In a Dec. 11 email 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 said. “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 left office Jan. 4 and 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 says he had already 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, which represented less than 10 percent of the total amount requested.

There was only one problem: In January, the Biddeford project fell apart.

‘Greenwashing’

“The whole thing blew up,” said Sen. Barry Hobbins, 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 was essentially a project to get Casella stimulus money for its troublesome 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 email saying, “Please do refer people to me and I will handle it. And please don’t tell people that the MEGEA 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 was officially 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 had largely 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 email 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 that “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 email:

“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 the take down to $3 million from the original $6.6 million.

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.”

Documents indicate Stoddard still had problems.

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 that the agency itself was already doing, as were other groups, including a effort of environmental and religious groups called “Green Sneakers.”

‘Awkward appearances’

In a presentation to staff, Meyer questioned the Alliance’s qualifications, stressed the “awkward appearances” of hiring “Gov. Baldacci’s former counsel” and argued 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 thought 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 executive committee member Becky Bartovics of North Haven said the Club never got any money from the Alliance.

In June, the Alliance hired Seth Murray as executive director. Federle continued to represent it in public, including for example at a late October board meeting of the Efficiency Maine Trust.

Stoddard then asked the Efficiency Maine Trust board – all Baldacci appointees – to authorize the no-bid contract with the Alliance. The board insisted the Alliance be given a one-year contract of up to $1.25 million, with an option for the other two years and additional $2 million.

It’s that contract the Alliance will now abandon.

Is Lee concerned it appears 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, a nonprofit, nonpartisan journalism organization based in Hallowell. Its email is mainecenter@gmail.com and the website is pinetreewatchdog.org

Following is the press release that Efficiency Maine and Maine Green Energy Alliance sent Friday evening, Jan. 28:

Maine Green Energy Alliance Board Votes to Wind Down Operations;
Potential Solution for Home Energy Rebate Program Funding

January 28, 2011 — The Maine Green Energy Alliance (MGEA) Board of Directors voted yesterday to wind down the activities of the MGEA under a contract with the Efficiency Maine Trust. The MGEA Board authorized its Executive Director, Seth Murray, to work with the Executive Director of the Efficiency Maine Trust, Michael Stoddard, on a wind down plan. Under funding from the American Recovery and Reinvestment Act and US Department of Energy (DOE), MGEA has been working with eight partner communities to assist homeowners in making energy efficiency improvements to their homes.

“When we first began our efforts, one of the key advantages for Maine homeowners was the Efficiency Maine rebates for making energy efficiency home improvements,” said Seth Murray.

“Due to the overwhelming success of Efficiency Maine’s rebate program, the funds for these rebates are nearly exhausted. Using the funds currently allocated to MGEA for Efficiency Maine’s rebate program will secure funding for over 1,000 additional home energy-saving projects.”

“MGEA’s decision to end its project is a hard one, but it is the right one, and will enable us to keep up the momentum for home energy upgrades at the exact moment that heating prices are climbing and Mainers have the greatest need for energy savings,” said Michael Stoddard, executive director of Efficiency Maine. “From the outset of our collaboration, MGEA has employed an innovative and analytical approach while consistently focusing on maximizing the number of home energy efficiency retrofits.”

The MGEA partnered with Efficiency Maine and MaineHousing when applying for the DOE grant in December of 2009. Their joint grant application received one of the three largest awards in the nation in a highly competitive grant process. The MGEA played a pivotal role in passing enabling Property Assessed Clean Energy (PACE) energy financing legislation that was called for in the grant application, and worked with the first six communities in Maine that adopted the PACE ordinances.

Through its coordinated community efforts over the last five months, the MGEA has scheduled more than 200 home energy audits and has already completed more than 50 home energy efficiency retrofits with many more in the pipeline. The already completed energy efficiency retrofits are projected to save homeowners over $500,000 over the next 10 years. The MGEA also generated roughly $500,000 in local economic activity from the energy audits and retrofits completed or in process to date.

MGEA FACT SHEET

About the Maine Green Energy Alliance

• Our mission is to help Maine move forward to a more sustainable energy future. Today, we are focused on helping our partner communities dramatically improve the energy efficiency of their residential housing stock.

Department of Energy Retrofit Ramp-up Grant Proposal

• In December of 2009, Maine State Housing, Efficiency Maine, and the Maine Green Energy Alliance submitted a joint grant proposal to the Department of Energy in response to the Topic 1 of the Retrofit Ramp-up Funding Opportunity Announcement (FOA)

• The Maine Green Energy Alliance comprised $6.4 million of the $70 million budget proposed.

• This grant proposal was the only grant proposal submitted by any Maine organizations or governmental bodies in response to Topic 1 of the FOA

Department of Energy Retrofit Ramp-up Grant Award

• In April 2010, the Department of Energy announced that this joint grant proposal won a $30 million grant award

• This was one of the largest awards both in total amount and on a per-capita basis

• As part of the descoping from the original $70 million proposal to the $30 million award, the Maine Green Energy Alliance’s portion of the award was similarly descoped to $3 million over three years

• The Department of Energy approved this descoped budget and work scope in May 2010

Efficiency Maine Administrative Contract

• As the administrator of the $30 million award, on Aug. 3, 2010, Efficiency Maine Trust entered into a contract with the Maine Green Energy Alliance for the first year of effort under this grant proposal.

• The first year budget for the activities of the Maine Green Energy Alliance under this contract is $1,104,361

• This contract includes a right-to-terminate the contract at any time

Contract Activities

• The Maine Green Energy Alliance began significant community outreach efforts after receiving funding from Efficiency Maine in mid-August. Since that time, the Maine Green Energy Alliance has

• Helped homeowners schedule over 200 home energy audits

• Helped homeowners move forward with over 50 energy efficiency home retrofits (and many more are in the pipeline). These retrofits are projected to save these homeowners over $500,000 over the next 10 years.

• Generated over $470,000 in economic activity from the energy audits and retrofits completed or in process to-date.

• Spent $355,836 through Dec. 31, 2010.

Efficiency Maine Home Energy Savings Program Results as of Dec. 31, 2010

Energy Audits: 2,900

Whole House Energy Upgrades: 1,688 homes

Average Heating Savings: 36 percent = $1,000/yr per homeowner

Total Program Energy Savings: 600,000 gallons/yr permanently

Average Incentive: $3,299

Average Project Cost (including incentives): $9,655/home

Total Investments in Maine’s Building Trade: $16M (during one of the slowest periods ever)