Utilities Seek to End Isolation of Northern Maine's Power Grid

Mar 1, 2007 NGI's Power Market Today

In an effort to create a more competitive electricity market in Maine, officials at Maine & Maritimes Corp. confirmed Thursday that its subsidiary Maine Public Service Co. (MPS), and Central Maine Power (CMP) have agreed to study the feasibility of a new power transmission line that would directly connect the Aroostook County power grid to the rest of the state.

Maine & Maritimes Corp. CEO Brent M. Boyles said CMP and MPS signed a memorandum of understanding Tuesday formalizing the agreement, which sets up a four- to six-month study period to evaluate the proposed transmission line. Currently, the Aroostook grid is connected to the rest of Maine and New England only indirectly through transmission lines in Canada.

The company noted that isolation of the northern Maine power grid is a barrier to competition. In December 2006, the Maine Public Utilities Commission's (PUC) standard offer solicitation attracted only one bidder.

As a subsidiary of Energy East Corp., CMP serves an estimated 596,000 customer accounts in an 11,000-square-mile service area in central and southern Maine. MPS is a regulated electric and transmission utility serving Northern Maine with approximately 36,000 customer accounts.

"The new transmission line has the potential to accomplish a number of important goals," Maine Gov. John Baldacci said. "It will connect Aroostook to the rest of the state, making it possible for a more competitive electricity market there and hopefully restraining prices. Both the Aroostook grid and the grid that serves the rest of the state would be strengthened."

In addition, Baldacci said the line also would reinforce a memorandum of understanding signed Feb. 9 between Maine and New Brunswick for greater cooperation on energy issues (see Power Market Today, Feb. 14). "We are serious about our commitment to work more closely with Canada and take advantage of the opportunities that exist for clean energy supplies and renewable resources," he added.

Baldacci has said Maine consumers are shouldering the burden of transmission and capacity costs for other states in New England, which has prompted him to join the state legislature in requesting that the PUC study alternatives to benefit Maine.

In January, the PUC released the results of an interim report that laid out possible alternatives if the state decided to withdraw from the New England Independent System Operator (ISO-NE). It also offered scenarios about Maine's continuing participation. PUC Chairman Kurt Adams said the report found that Maine consumers could pay as much as $616 million over the next five years for continued participation in ISO-NE. Commissioners said they were considering their options, which include forming a statewide independent transmission company (ITC) or partnering with neighboring Canadian provinces in a regional transmission organization (RTO). A final report will be sent to the state legislature in January 2008 (see Power Market Today, Jan. 19).

Since 2002, Maine has been exploring the possible formation of an RTO with Canada's Maritime provinces (see Power Market Today, June 5, 2002). The state is a net power exporter and closer ties with other large net importing states in the region and more efficient transmission integration has led to a smaller amount of surplus power in Maine and higher power costs.

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