AUGUSTA, Maine — In the final moments of the 2010 legislative session, after the debate over state borrowing had finally settled, lawmakers approved a bill that its supporters hope could help transform Maine’s energy economy.
There was little discussion of the bill, which sets up a process for reviewing and approving potentially lucrative lease deals on “energy corridors” through Maine from Canada to southern New England and beyond.
The question now is will these hypothetical corridors — and the massive lease payments they could generate for the state — ever become a reality?
“There will be applications coming in at some point,” said John Kerry, director of the state’s Office of Energy Independence and Security. “I’m confident about that.”
The bill, LD 1786, is one of two major pieces of energy legislation that passed the Legislature this year. Both bills attempted to better position Maine for an energy future that has yet to arrive.
The second bill, LD 1810, sets up a regulatory framework for reviewing applications for ocean-based energy and sets a lofty goal of generating 5,000 megawatts of wind energy from offshore turbines by 2030.
Beth Nagusky, director of the Office of Innovation and Assistance at the Maine Department of Environmental Protection, said the potential for massive wind power facilities located in the Gulf of Maine received most of the attention. But she said the ocean-energy bill is about much more than commercial offshore wind farms, which experts agree are likely a decade or more away.
“It’s about tidal and potentially wave energy as well. Maine is open for business for multiple technologies,” Nagusky said. “Wind is the largest resource, but with tidal energy, they are testing equipment in Eastport right now.”
The “energy corridor” bill also was intended to send a positive message to potential developers, not to mention Canadian officials who are threatening to block energy projects in Down East Maine.
The bill sets up a process under which companies can apply to build pipelines, transmission lines or other energy infrastructure along Interstate 95 or other statutory corridors owned by the state. In return, the state would receive lease payments — potentially in the tens of millions of dollars annually — for reinvestment in energy efficiency.
Eighty percent of the lease revenues will go to the Efficiency Maine Trust for dispersal in the form of loans, grants or other incentives largely for energy efficiency, weatherization and fuel conversion projects. The remaining 20 percent will go into a new transportation efficiency fund.
“In the long term, it sets up a framework where developers have a clear path forward and, at the same time, provides protection for the natural resources of the state,” Kerry said.
An “Interagency Review Panel” consisting of both state officials and four members of the public will review any application to determine whether it is in the long-term interest of the state.
Two key criteria that an applicant will have to meet are demonstrating that their project “is reasonably likely to reduce electric rates or other relevant energy prices” in Maine and that the project will not harm Maine’s own energy production industry.
Some observers had suggested that Canadian energy firms could undercut Maine’s hopes of becoming a major exporter of renewable energy by using the corridors to supply cheaper energy to southern New England.
“Anything that happens with the corridor must not hurt Maine’s own ability to produce and to provide to the world its own form of homegrown, green, renewable energy,” said Rep. Herb Adams, a Portland Democrat who served on the Utilities and Energy Committee.
One of the companies that has already expressed interest in the corridor idea is Irving Oil.
Daniel Goodwin, spokesman for Fort Reliance, Irving’s parent company, said Thursday that the company is reviewing the legislation but that Irving remains interested in working with Maine. Fort Reliance also is talking with other companies and governments, both in Canada and the U.S., on more collaborative approaches to expanding the regional transmission system.
“In general, we think the bill is good for Maine because it removes one of the big barriers to Maine entering into the larger conversation taking place in the region right now about energy infrastructure development,” Goodwin said.
The bill also lifts a moratorium on approval of energy corridor applications. That moratorium was put in place by lawmakers and groups frustrated with Canadian opposition to liquefied natural gas terminals proposed for Passamaquoddy Bay.
Citing safety and environmental concerns, Canadian officials have threatened to block LNG tankers from passing through Head Harbour Passage en route to the terminals proposed for Robbinston and Calais. But supporters of the LNG project contend that Canadian officials are merely trying to protect the interests of a new LNG terminal in Saint John, New Brunswick, that is co-owned by Irving.
Lifting of the moratorium has not softened the Canadian position, however. A spokesman for Prime Minister Stephen Harper told the Portland Press Herald this week that officials remain opposed to allowing LNG tankers through Head Harbour Passage.
That angers Sen. Kevin Raye, R-Perry, who accuses Canadian officials of blocking economic development opportunities in Washington County while aggressively expanding the energy-based economy just across the border.
Raye supported the corridors bill but said he and others will be watching closely.
“If it turns out to be ineffective at protecting Maine’s interests, we should revisit it,” said Raye, the Senate minority leader. “I remain gravely concerned about the belligerence of the Canadian government.”
Both the corridor bill and the ocean energy bill were the products of more than a year’s worth of work, largely done by work groups or special committees.
The bills then were handled almost exclusively by members of the Utilities and Energy Committee, who were under considerable time pressure to understand — much less improve — the large and complex measures. The bills then breezed through the full Legislature without debate.
Some lawmakers expressed frustration with the time crunch. For instance, the committee had less than a month to consider the 36-page ocean energy bill.
“Certainly, they got a thorough working,” said Adams. “It would have helped and been healthier if we had had the bills for the full session because of their content.”