AUGUSTA — A bill that moves Maine toward ending its so-called “oil poverty” passed into law late Wednesday after the state Senate unanimously rejected Gov. Paul LePage’s veto.

The measure is aimed at expanding New England’s natural gas infrastructure, boosting funding for energy efficiency, directly lowering businesses’ electricity costs and making it more affordable for residents to abandon oil heat.

And while the Senate voted 35-0 to override the veto, another bill that passed early in the night led to LePage’s support of the omnibus bill, which he shared in a letter to lawmakers prior to the veto override vote.

The second bill, LD 1472, would allow the University of Maine to bid on an offshore wind power demonstration project. LePage had argued that if ratepayers in Maine were going to fund offshore wind development through higher electric rates, then the University of Maine should be allowed to compete.

But opponents to that bill, including key Democratic leaders, said the process for selecting a bidder, in this case Norwegian energy giant, StatOil, was complete and to reopen the process would send a negative message to companies looking to invest in Maine.  

Moreover, some Democrats said, the move could jeopardize the $200 million StatOil is looking to invest and the hundreds of jobs their project could lead to for Mainers.

The new measure still requires the Maine Public Utilities Commission to have the final say on which contracts are awarded, but it gives the university a foot in the door and the opportunity to seek federal funding for offshore wind development, supporters of the second bill said.  

Under the legislation the university would be able to bid on the offshore demonstration project, previously awarded to StatOil, but they must complete their bid by September 1, 2013.

Those who supported the measure as a way to gain the support of LePage and a handful of Senate Republican who supported the governor described the law allowing the university in on the bid process, “innocuous.”

Sen. John Cleveland, D-Auburn, one of the co-author of the overall energy bill, said the concession to LePage on the university would create only a small delay for StatOil. Cleveland who supported the second bill from the Senate floor said failing to do so would place all the other positive things the bill did for Maine’s energy future in jeopardy.

“The challenge was persuading the Democrats that (the new language) likely did little harm to the existing off-shore wind proposal,” Cleveland said. 

But in an attempt to fend off any ill-will toward Maine from StatOil, Democratic leaders reached out to company executives first thing Thursday.

“Today, we had a responsibility to reassure StatOil that what happened last night is not indicative of how Mainers do business,” Senate President Justin Alfond, D-Portland said. “In our conversation today, we reassured StatOil that we stand ready to work with them to ensure their success in Maine.”

LePage wrote that the second bill “would accomplish what the chairs (of the Energy Committee) and I agreed upon: allowing an equal playing field for our university to compete for offshore wind development.”

Thursday LePage fired back.

“Senator Alfond and other Democrats are fighting to give preference to a multi-international (sic) corporation, which has not guaranteed it will provide long-term jobs for Mainers,” LePage said. “Prior to moving forward with a $200 million contract I would prefer to consider the economic opportunity to our own university system, right here in Maine.”

Senate Majority Leader Seth Goodall, D-Richmond, said LePage’s stance was puzzling at best and disingenuous at worst. Goodall said Thursday the governor has been speaking for two years about attracting investment to the state and often says,  “capital goes where its wanted and stays where it’s appreciated.”

Goodall said StatOil was already spending money in Maine doing research and outreach as part of the PUC process. StatOil’s term sheet with the PUC also requires the company to invest in Maine and hire Maine workers with an up front investment of $120 million. 

“The problem is it sends a terrible business signal to the rest of the country and the globe in this matter,” said Goodall. “Because this is a worldwide industry that not only are states competing but we are directly competing with Scotland.”

Goodall said Democrats were equally willing to support research and development in offshore energy by the University of Maine but Republicans were unwilling to help them find ways to further fund the university and instead chose to pit the school against StatOil. 

He said allegations by LePage and other Republicans that Democrats were not supporting the university system were false and that it was Democrats who fought off more than $40 million in cuts to the system offered by LePage in his budget proposal.

Lawmakers who supported the energy bill, despite the concessions on deep-water off-shore wind, said it means the beginning of the end to Maine’s deep dependence on heating oil and moves toward eliminating the state’s so-called “oil poverty.”

“Maine is showing a real leadership role in New England,” Rep. Ken Fredette, R-Newport, said. He praised LePage’s efforts to gain a foothold for the University of Maine, which for more than a decade has been working on composite technologies related to offshore wind.

“This is a historic moment in the future of Maine that took a real bipartisan team effort from the sponsor of the bill to the governor’s office to the committee,” said Rep. Barry Hobbins, D-Saco, House chairman of the Legislature’s Energy, Utilities and Technology Committee.

LePage first vetoed the bill June 19 just minutes before a midnight deadline to act on it. The House, which has overridden several of LePage’s vetoes this legislative session, took up the veto within an hour and overrode it in a 121-11 vote.

The energy bill is the product of months of work over the past few months by the Legislature’s Energy Committee, which assembled elements from more than 12 pieces of legislation into a comprehensive bill that contained some policies favored by Republicans and others by Democrats. Some of the elements originated in legislation proposed by LePage.

But LePage objected throughout the process to individual parts of the legislation, including a provision that would allow the Maine Public Utilities Commission, rather than the Legislature, to set the systems benefit charge that’s added to nearly all electric bills to fund conservation and efficiency programs.

He pushed lawmakers to add other provisions, such as a slate of changes to Maine’s Wind Energy Act that would erase the state’s wind energy generation goals from state law.

LePage said he wouldn’t support the legislation unless lawmakers passed the law  requiring the PUC to reopen its review process for offshore wind energy projects and consider an offshore wind energy pilot project developed at the University of Maine for support from electric ratepayers.

LePage has strongly opposed a PUC decision made earlier this year that awards ratepayer support to Statoil North America, a Norwegian company, for a pilot offshore wind energy project in which the company would moor four floating turbines in federal waters off the Maine coast.

Still Wednesday’s votes were being praised by most involved in the negotiations,  including Patrick Woodcock, director of the governor’s energy office.

Woodcock said the lawmakers who worked on the bill, including Fredette, Hobbins and Cleveland set a tone of focusing on policy and not politics.

There are still issues in the bill that LePage finds objectionable, but he was willing to compromise to move the state forward on the other areas including natural gas expansion, Woodcock said. 

But Woodcock was viewing the new laws as a step in an on-going process of reforming Maine energy policy in a way that ultimately reduces costs for families and businesses.

“We are going to need to build on it,” Woodcock said late Wednesday. “The challenges our state face are enormous when it comes to energy and we are going to have to redouble our efforts to implement it, as a Legislature and as an administration.”

Rep. Diane Russell, D-Portland, a member of the committee, also praised the compromise.

“The cheapest form of energy is the energy never used,” Russell said. “This bill gets us to a place where homeowners and Maine residents are going to see lower electricity rates and more importantly, lower home heating costs.”

She said, “Heat should not be a luxury item.”

She pointed out that Fredette first coined the phrase “oil poverty” because so many Mainers spend large portions of their income on keeping their homes barely warm enough in the winter.

“That’s what this is about,” Russell said. “It’s not about bipartisanship; it’s not about compromise. It’s about people,” Russell said. “The reason we all came together is because this is the biggest issue facing Maine. It is actually a crisis and we have actually dealt with it, or have started to.”

“It is hard to overstate the importance of this bill for increasing energy efficiency and reducing pollution from energy consumption,” said Dylan Vorhees, clean energy director for the Natural Resources Council of Maine. “It will increase investment in efficiency, take the politics out of decision-making on future efficiency investments and save hundreds of millions of dollars.”

The NRCM had backed the bill and voiced disappointment when LePage first vetoed it.

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Matthew Stone of the Bangor Daily News contributed to this report.