Problematic project labor agreement legislation becomes law without Governor’s signature

In early May, Governor Janet Mills allowed LD 1969, An Act Concerning Equity in Renewable Energy Projects and Workforce Development, sponsored by Rep. Scott Cuddy (D-Winterport), to become law without her signature. The Maine State Chamber of Commerce joined a coalition of other business advocacy groups in both strongly opposing the bill during the legislative process, as well as urging Governor Mills to veto LD 1969. Despite these efforts, the bill still became law.

This law will be problematic, as it requires the Public Utilities Commission, when evaluating a procurement, to require the payment of “prevailing wages” on all projects, and to consider and give preference for a project labor agreement (PLA) for renewable energy generation over two megawatts. A project labor agreement traditionally hires unionized shops or workers, instead of open or non-unionized shops or workers. The bill’s language creates new labor standards, which are disruptive, burdensome, and unnecessary. LD 1969 was the third bill in the 130th Legislature that legislates unionization using project labor agreement language. As a result, the vast majority of Maine’s construction workforce will now be locked out of offshore wind projects, a portion of work for affordable housing. In addition, Maine is now challenged to find a pathway on all future renewable energy projects.

The new law puts limitations on the ability of both general contractors and their sub-contractors to effectively compete for these projects. While the law does not specifically mandate project labor agreements, the bidding process gives weighted preference for union workers. So, while it is possible for an open shop contractor or sub-contractor to bid successfully for these projects, the likelihood that such a project would wind up in court because the preferred union bidder did not get it is significant.

Even more troubling is the impact this law will have on large Maine contractors and small businesses. Approximately 5% of Maine’s construction contractors are unionized, but they have the advantage over the other 95% – especially small businesses – when it comes to competing for these vital projects. Boxing out the vast number of smaller sub-contractors means two things: the work will go to bigger businesses, and those bigger businesses will be from out of state – and so will their employees. This proposal does not help Maine workers.

Issues with the bill extend to job training as well. The bill abandons the concept that Maine companies have and will continue to educate and train workers outside of a government-regulated and approved program by requiring pre-apprenticeship training and certification. While the business community supports registered apprenticeships, to outline the path forward for the model presented in the law is shortsighted and ignores centuries of history in our state where workers have learned a skill outside of government’s oversight.

In fact, some of Maine’s most prominent firms have established and well-respected education programs that recruit, train, and place skilled workers in the field without the assistance of the state or federal government. The language in LD 1969 assumes the company will require apprentices for the specific job. Many of the firms that work onsite will have trained skilled labor already prepared to perform the work. This law ignores that and prevents those companies from bidding if this credit is utilized. The result will be fewer bidders, with less competition and more regulations. Worst of all, higher prices are certain – and these higher prices will be passed down to the consumer in the form of higher electricity costs.

Renewable energy projects are critical to reaching the climate goals put forward by the State of Maine. There are already qualified employers, employees, contractors, and subcontractors in Maine. Despite repeatedly making this argument before the Joint Standing Committee on Labor and Housing, the full legislature, and to Governor Janet Mills, this bill has become law.

During the 129th Legislature, Maine updated its Renewable Portfolio Standard. One of the issues now facing us, and not necessarily a bad one, is the need to develop the workforce to meet the demands for these projects. Rather than enacting a policy that will limit who can participate in the renewable energy field, as LD 1969 does, the Maine State Chamber and others believe that Maine should be developing policies that look at expanding and encouraging the attraction of more people into this field. Unfortunately, LD 1969 takes the state in the wrong direction in trying to meet the workforce demand for the renewable energy development and will result in the unintended consequence of bringing in out-of-state workers when Maine workers do not meet the requirements outlined in LD 1969, thereby increasing the costs of these projects.

The passage of LD 1969, and the subsequent decision to allow it to become law, is one of the few dark spots for the business community this session. Despite the warnings from the construction industry and the denials from organized labor regarding the consequences of the bill, it has become clear that only time will tell the full story. For more information, please contact Peter Gore by calling (207) 623-4568, ext. 107, or by emailing pgore@mainechamber.org, or Ben Lucas by calling (207) 623-4568, ext. 111, or by emailing blucas@mainechamber.org.