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Bill seeks compensation if power grid raises costs

Posted March 05, 2009, at 9:59 p.m.
Last modified Jan. 27, 2011, at 9:02 a.m.

AUGUSTA, Maine — Utilities in northern Maine want guarantees that their customers would receive some form of compensation if connecting to New England’s power grid results in higher rates locally.

But opponents of a bill heard by a legislative committee Thursday predicted the measure will actually harm northern Maine residents by discouraging enormous investment in wind power and undermining efforts to build more stability into the state’s electric grid.

“Having rebates or compensation in northern Maine doesn’t mean a thing if the lights are off,” said David Allen, a representative for Central Maine Power.

The Maine Public Utilities Commission recently dismissed an application by Maine Public Service Co. to build a new transmission line critical to massive wind energy projects proposed for Aroostook County.

Maine Public Service is expected to try again at some point. So backers of the bill heard Thursday want to make sure local customers are protected from rate hikes for transmission line projects some contend will benefit primarily southern New England and energy companies.

“We the northern Maine ratepayers should not be subsidizing the profits of others,” Scott Hallowell with Eastern Maine Electric Cooperative told members of the Legislature’s Utilities and Energy Committee.

Sen. Roger Sherman’s bill, LD 608, would require the PUC to ensure that northern Maine electricity customers receive a rebate or discounts if connecting to the larger grid would increase rates. The rebates would be necessary before the PUC could approve any transmission line projects that would eliminate or modify the Northern Maine Independent System Administrator.

John Clark, general manager of Houlton Water Co., said that contrary to what many believe, customers of Northern Maine ISA consistently have paid lower rates than their counterparts in the New England grid. Clark predicted transmission fees would dramatically increase for northern Maine utilities while eliminating local control.

“The bottom line is don’t put us into ISO. It’s a mess,” Clark said. “But if it does happen, we ask you to compensate us for that.”

But Jim Cohen, an attorney representing Maine Public Service Co., said the bill as written is too broad and takes away the discretion of the PUC to evaluate the public benefit of projects.

Paulina McCarter Collins, a lobbyist with the PUC, said the commission is officially neither supportive nor opposed to the legislation. But Collins expressed concerns the measure was too restrictive.

She also questioned the necessity of the bill, explaining that the PUC already has the authority to require discounted rates or other mitigation of any impacts on consumers before approving a project.

And under Central Maine Power’s reading of the legislation, utilities would be prevented from building new transmission lines unless they can guarantee that rates would go down, Allen told lawmakers.

Committee members will take up the bill during a work session at a later date.

While Maine Public Service’s $625 million transmission line project has been put on hold by the PUC, Central Maine Power is hoping to move forward with a separate plan for a new line stretching from New Hampshire to Orrington.

On Thursday, CMP officials released a report by economist Charles Colgan predicting that the $1.5 billion project could support 2,100 jobs annually during the four years of construction.

Utility officials claim the transmission line upgrades are necessary to prevent blackouts and to accommodate new sources of renewable power. But the project is not popular with some homeowners living along the transmission line route.

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