Maine finds no insurmountable obstacles to leaving
regional grid
Jan
19, 2007 David Sharp, Associated Press
PORTLAND, Maine --
Maine ratepayers
don't get enough in return for participating in
the regional power grid and there are "no insurmountable
legal, economic or technical barriers" to leaving
it, according to a preliminary report by the Maine
Public Utilities Commission.
The 39-page report delivered to the Maine Legislature
this week says "reasonable alternatives" to participation
in the grid include creating an independent transmission
company and establishing power-swapping arrangements
with neighboring Canadian provinces.
The cost to Maine ratepayers for staying in the
grid managed by ISO New England will be as much
as $616 million over the next five years, said PUC
Chairman Kurt Adams.
"Our findings outline the current inequities that
exist for Maine within the ISO-NE system as compared
to the other New England states," Adams said.
Sen. Philip Bartlett, co-chairman of the Legislature's
Utilities and Energy Committee, said the study suggests
the state may be better off finding an alternative
"instead of standing back and paying for mistakes
that we feel were made in southern New England."
"It sends a strong message that we're serious about
needing to protect Maine consumers, and there are
options available to us," Bartlett, a Democrat from
Gorham, said Friday.
The Maine Public Utilities Commission voted to
explore alternatives last summer after the Federal
Energy Regulatory Commission approved surcharges
as part of an effort to increase the region's power
supply by encouraging construction of new generating
plants.
Maine officials protested that the decision aimed
at reducing energy bottlenecks in southwestern Connecticut
and northeastern Massachusetts will result in higher
energy prices for Mainers at a time when the state
has a surplus of power.
In addition to pursuing the option of leaving the
regional power grid, the state also is fighting
FERC's decision in court. Connecticut and Massachusetts
also have gone to court to fight FERC's approval
of the surcharges.
ISO New England said Friday it was not ready to
address any of the specifics in the Maine report.
But it took exception to the notion that Maine gets
nothing in return for its participation in the regional
grid.
"We believe that the current New England regional
structure provides benefits to Maine ratepayers
including both reliability and economic benefits,"
spokesman Ken McDonnell said from ISO New England's
headquarters in Holyoke, Mass.
No other states have threatened to bail out of
the grid, but New Hampshire regulators and lawmakers
have been watching developments in Maine with great
interest, said Meredith Hatfield, the state's consumer
advocate on utility issues.
New Hampshire is another state where more power
is generated than consumed. In October 2006, New
Hampshire customers used 11.2 million megawatt hours
of electricity, while power plants in the state
generated 23.7 million megawatt hours, according
to federal statistics.
Hatfield's office and New Hampshire utility regulators,
like those in the other New England states, were
involved in drawing up the so-called "Forward Capacity
Market" to ensure the region's growing power needs
will be met.
"There are so many issues with our generation future
in terms of our needs," she said. "One of the challenges
is, because you can't store electricity, we end
up building to our peak needs ... and that peak
just keeps growing and growing."
New sources of power are clearly needed close to
where consumption is highest, but the incentives
to build are insufficient, said Martin Murray, of
Public Service Company of New Hampshire.
"In the past, regulators required regulated utilities
to plan for the future and build new power plants,"
he said. "For the independent marketplace, the best
situation is to have a tight energy market, so prices
are higher."
As part of electric deregulation a decade ago,
Public Service was supposed to divest itself of
all its power plants, but later was allowed to keep
some when the market price of power skyrocketed.
Now the utility has the lowest power costs in the
state and wants to build new, medium-sized renewable
energy plants, but is forbidden to do so under deregulation.
In Maine, there are several factors driving the
talk of a power-swapping arrangement betwen the
state and the Maritime Provinces.
Both Maine and New Brunswick are net exporters
of energy. Maine's demand peaks in the summer; New
Brunswick's peaks in the winter. There's already
a transmission line connecting Maine and New Brunswick.
One obstacle is that the state has no authority
to force privately owned utilities Central Maine
Power Co. and Bangor Hydro-Electric Co. to pull
out of the grid, the report said. Bangor Hydro is
owned by Emera, which is based in Nova Scotia. CMP
is part of Energy East, which has operations in New York, Connecticut,
Massachusetts, Maine and New Hampshire.
On the flip side, ISO New England has no authority
to force CMP and Bangor Hydro to remain part of
the regional power grid, the report said.
A final report by the Maine Public Utilities Commission
is due next year.
In the meantime, the PUC will continue to negotiate
with the Maritime Provinces, look into creating
an independent transmission company and ask the
New England Conference of Public Utilities Commissioners
to review inequities in the current system.
"The commission intends to continue this inquiry
and aggressively pursue alternatives to the ISO-NE
status quo," the report said
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