Maine’s future with power grid unclear

Posted Jan. 02, 2009, at 10:27 p.m.

PORTLAND, Maine — The Maine Public Utilities Commission staff recommends that the state’s largest electric utilities seek more favorable agreements with the New England power grid. But the recommendation stops short of immediate steps to pull out of the grid.

The commission already concluded that Maine ratepayers don’t get enough in return for participating in ISO New England. Alternatives include going it alone, partnering with neighboring New Brunswick or following the staff recommendation of seeking reforms from ISO New England.

The full Public Utilities Commission is due to take up the staff recommendation next week and will report its recommendations to the Maine Legislature by Jan. 15.

Neither Central Maine Power and Bangor Hydro-Electric Co. advocate leaving the grid. Their current agreements with ISO New England will expire in February 2010.

Maine regulators contend the state’s residents shoulder an unfair burden of the expense of regional power grid improvements. They also contend that Maine consumers are left out of the decision-making process, which is increasingly happening at the regional and federal level.

Public Advocate Richard Davies said ISO New England’s mandate is ensuring the reliability of the regional power grid, but the organization isn’t required to consider costs.

“They tend to gold-plate transmission projects. It means they achieve a greater reliability than what’s necessary to provide sufficient reliability,” Davies said.

Furthermore, the way the system is set up, utilities tend to favor electric transmission projects instead of other alternatives for addressing electricity supply problems because of the reimbursements from ISO New England, Davies said.

Ellen Foley, an ISO New England spokeswoman, said stakeholder discussions are already under way to address concerns surrounding cost allocations and cost controls. Additional discussions will kick off this month to address the issue of governance, she said.

“We respect Maine’s need to evaluate and decide its future options, but ISO believes there’s a logical and beneficial relationship that exists between Maine and the rest of the New England states,” Foley said Friday from her office in Holyoke, Mass.

In his recommendation, Charles Cohen, a hearing examiner for Maine’s PUC, suggests that Central Maine Power and Bangor Hydro-Electric Co. negotiate with ISO New England in the coming months to make changes to their transmission-owner agreements with the power consortium.

Cohen recommends that the CMP and Bangor Hydro report back on March 31 and June 15. That would give the Maine Public Utilities Commission and the Legislature time to act before a deadline for notifying ISO New England if it plans to leave the grid.

ISO New England requires utilities to provide a notice of intentions 180 days before the current transmission-owner agreements expire on Feb. 1, 2010.

Maine’s exploration of alternatives to the existing power grid comes as CMP and Bangor Hydro are planning nearly $2 billion worth of electric infrastructure improvements to ensure reliability as well as to connect northern Maine to the regional grid for the first time.

The projects would accommodate existing and proposed northern Maine wind-power projects, but they would face funding obstacles without ISO New England’s assistance.

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