Energy panel eyes corridor lease rules

Posted Nov. 18, 2009, at 9:53 p.m.

AUGUSTA, Maine — Members of a task force struggled Wednesday to come up with rules governing potentially lucrative energy corridors in Maine amid concerns about Canadian companies’ plans to feed energy-hungry markets to the south.

Earlier this year, state officials announced plans to explore leasing the right-of-way along Interstate 95 and other highways to companies interested in building electricity transmission lines and energy pipelines to southern New England.

Proceeds from those leases — which could be in the tens of millions of dollars annually — would then be used to make Maine homes and businesses more energy efficient and to encourage the expansion of homegrown renewable energy sources.

But discussion of the “energy corridors” has been dogged by tensions over Canadian opposition to liquefied natural gas facilities proposed for Washington County as well as mistrust, in general, of the multibillion dollar energy firms across the border.

On Wednesday, members of an energy corridor task force struggled to find a way to ensure that any corridors help lower the high energy costs paid by Maine homeowners and businesses. At the same time, members said, Maine must be able to tap into those corridors to export homegrown energy.

Group members, who are developing proposed legislation, said the ultimate failure would be to enable Canadian energy companies to reap huge profits while squelching development of renewable energy in Maine from winds, tides and forests.

“I do not want to get out of here unless we have some control over the power that is coming from Canada,” said Rep. John Martin, D-Eagle Lake. “That is critical for where I come from. And for other legislators in my area, that is the bottom line.”

The debate over energy corridors in Maine is taking place against a backdrop of tumultuous change in the energy industry.

To the north, Canadian power companies are jockeying for position to sell cheap power to the enormously lucrative markets in the northeastern U.S.

That appears to be a driving force behind provincial-owned Hydro-Quebec’s move to purchase New Brunswick Power — a proposal that has fanned political tensions in Canada and raised concerns among New England’s producers of renewable power. At the same time, power producers in the Midwest also are eyeing the north-eastern markets.

“This is probably one of the defining moments in Maine history: for once, we are in the right place with the right assets,” said Rep. Kenneth Fletcher, R-Winslow.

Sen. Peter Mills, R-Skowhegan, suggested language that he said would give the proposed energy corridors legislation the teeth it needs to protect Maine’s interests.

Mills’ proposal, which appeared to have strong support among the group, would require state regulators to deny any corridor project that does not “enhance opportunities for energy generation within the state” and “significantly and measurably reduce electricity rates and energy costs for Maine ratepayers.”

“If we don’t put our eyes on the target and stick to it and play the same game that the Province of Quebec is playing, then we are going to be losers,” said Mills.

As they did earlier this year, supporters of bringing an LNG terminal to eastern Maine are attempting to use the corridors as leverage in their fight with Canadian officials over tankers in Passamaquoddy Bay.

New Brunswick officials maintain it would be unsafe for the massive LNG tankers to attempt to navigate the narrow passage, with its powerful tides and numerous hazards, in order to reach the proposed sites in Calais or Robbinston.

But supporters, who contend that an LNG terminal could dramatically lower energy costs in Maine, allege that provincial officials are merely trying to protect a newly opened LNG facility in St. John that is partly owned by New Brunswick-based Irving Oil.

Task force member Keith Van Scotter of Lincoln Pulp and Tissue, an LNG supporter, and the Industrial Energy Consumer Group are proposing to extend a moratorium on corridor projects until more study is done on the corridors’ potential impacts in Maine. In a straw poll on Wednesday, most members opposed the extension, however.

The current moratorium would end either when an energy corridors law takes effect, or, absent such a law, sometime next summer 90 days after the 124th Legislature adjourns.

Washington County Commissioner Chris Gardner, a member of the task force, acknowledged that the current moratorium on corridor projects has not softened New Brunswick’s position. But Gardner said something must be done to change what he described as Canada’s “obstruction” to a project that would benefit not just Washington County but all of Maine.

“I’m not saying a moratorium is the answer. I don’t know the answer,” Gardner said. “I’m saying we are at a very, very critical juncture right now.”

The task force plans to hold one additional meeting on Dec. 2. The group’s suggested legislation will then be submitted to the Utilities and Energy Committee for consideration.

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