Last April, Maine’s largest wind energy developer, First Wind, trumpeted a multimillion-dollar deal that would pay for the company’s ambitious plans to erect more wind turbines throughout Maine and the Northeast.
But the Maine Public Utilities Commission dealt a potentially fatal blow to the deal last week.
PUC staff, faced with what opponents of the deal have called the first serious challenge to the state’s landmark 2000 electricity deregulation law, recommended on Jan. 13 that the agency give the thumbs-down to the deal.
“We deny approval of the ‘proposed Transactions’ as we find that the risk of harm to ratepayers exceeds the benefits,” the draft decision reads, “even if conditions intended to mitigate the risk of harm to ratepayers were imposed.”
The recommendation, which will be considered and voted on by the three agency commissioners on Jan. 31, caps a nine-month struggle over a deal that’s described in legal filings as being worth, “at the high end,” $880 million. The capital infusion to First Wind alone would amount to $333 million.
First Wind, Ontario-based Algonquin Power and Utilities Corp. and Emera Inc., the Nova Scotia-based parent company of Bangor Hydro and Maine Public Service, propose to jointly build and operate wind energy projects in Maine and elsewhere in the Northeast. After a failed bid to go public in 2010, which left First Wind cash-hungry, the deal is a way for the Boston-based company to continue building wind towers across Maine and the region and a way for Emera and Algonquin to reach new energy consumers in the U.S.
At last count, there were 312 legal filings with the PUC in the case, a brigade of lawyers from Maine’s top law firms and state agencies, briefs, motions and documents that reference Hemingway, Shakespeare and Lady Gaga, and a subpoena served on an Emera official by a retired Canadian Mountie.
The case before the PUC centered on two legal issues: Was the proposal in the interest of ratepayers and would the deal violate Maine’s Electric Restructuring Act.
The Electric Restructuring Act, which took effect on March 1, 2000, prohibits utilities from owning both transmission and generation of electricity, which forced the Maine’s utilities to sell off dams and power plants. After the restructuring, utilities were responsible only for delivering power while other companies produced it — all in an attempt to create more competition and lower electricity rates.
Parties to the First Wind deal asserted in filings that it would benefit ratepayers by providing “a substantial benefit in achieving the State’s aggressive wind energy targets,” lowering the price of electricity in the regional market and strengthening the finances of both Bangor Hydro and Maine Public Service. Proponents said the Electric Restructuring Act would not be violated because Bangor Hydro and Maine Public Service, the two regulated Maine utilities in the deal, would not actually own or “have any measure of control” over generation assets or hold a “financial interest” in them.
But Eric Bryant, an attorney for the Maine Public Advocate’s Office, which represents the interest of the state’s utility customers, said last week that his office opposed the First Wind deal because it could result in higher utility prices, thus violating a law that required a deal to do no harm to the interests of ratepayers.
Bryant said the plan also would violate the Electric Restructuring Act. Its complex corporate structure, he said, would amount to just what the law forbids — a utility controlling a power generator.
“It’s a virtual vertical utility,” said Bryant. “If we’re going to actually honor the restructuring act, you can’t allow this restructuring to happen.”
Anthony Buxton, lead attorney for industrial energy users including Verso, Huhtamaki and Madison Paper, who are opposed to the deal, said, “Maine is being asked to change its energy policy, dramatically. The interpretation of this part of the statute is incredibly important in keeping a competitive market for electricity prices in Maine.
“The question is whether the restructuring act will be kept whole,” he said, “or whether someone will drive a big hole in it.”
The PUC staff’s draft decision rejected arguments made by the deal’s opponents that the Electric Restructuring Act would be violated because an affiliate of the utility, not the utility itself, would own the generation assets.
The staff concluded, “The utilities will not have any equity interest or voting securities that will allow them to exercise any direct or indirect management control over the development or operation of generation assets within the meaning of the statute.”
Nevertheless, staff wrote that the proposed affiliation of Bangor Hydro and Maine Public Service with companies that will “develop, own and operate generation assets” raises “substantial concerns regarding the possible exercise of preferential treatment by a utility to its competitive affiliates.” That, in turn, could produce higher transmission rates and higher electricity prices.
“We firmly believe that the joint venture with Northeast Wind will bring significant benefits to Maine ratepayers and will lead to as much as $3 billion in investment in the Maine economy and its communities,” First Wind spokesman John Lamontagne said Thursday. “That will create hundreds of related jobs and generate more competitively priced clean, renewable energy for Maine homes and businesses.”
Emera spokeswoman Sasha Irving declined to comment.
The Maine Center for Public Interest Reporting is a nonprofit, nonpartisan news service based in Hallowell. Email mainecenter@gmail.com or visit pinetreewatcdog.org.
Anyone remember when Maine Yankee was applying for permits from the PUC they promissed power “too cheap to meter” ?
Try nuclear – just not on a fault, in a tsunami-prone area, or any other area of likely harmful weather or geotectonic activity, which, fortunately, Maine has experienced little of in comparison to much of the rest of the world. Maybe, even, we have something marketable – lack of catastrophic weather or other natural phenomena, though I don’t want to tempt fate.
It is clear that the Nation’s energy future and the world’s environment health is being held hostage
by the don’t change anything, ever, politics of the “no compromise” , Neo-Know Nothing right wing,… financed by filthy, dirty, greedy, polluting “corporate persons “.
Ya that what made the USA #1…now we will be 3RD WORLD COUNTRY with thinking like you do and our unAmerican president
Maybe we should just quit working and go fishing.
Enviro-Whackos and their entitlement society.Maine the way life should be. Wheres my check.
Don’t the wealthy live in their own entitlement society ?
yes and they pay their own bills .
Than why did Romney pay a 10% lower effecvtive income tax rate them I did even though he made over ten times as much as I did, and why did the federal government spend more on tax subsidies for wealthy corporations than it did on welfare in 2011 ?
Do you have investments? would you like to pay more for your investments? Should we start means testing investments? Should we really punish success? What does romneys sucess have to do with your taxes? Obama has been praising mediocracy the american way is to be as successful as possible.Everyone has that oppurtunity.It is all about the choices we make in life.Siding payroll taxes against investment taxes is just campaign rhetoric to get the great divider elected.
I have two investment accounts, one at Morningstar and one with Fidelity. I own two properties in Maine and two investment properties in Connecticut. I would never want to punish succes, and Romneys success has nothing to do with my taxes. I don’t think you know what I was posting about, I am talking about the money Romney earned in speaking fees, not his investment income that he pays no taxes on, his investment money is invested in the Caymen Islands in a tax shelter.
The tax codes are written to give the wealthy an effective tax rate that is
much less than what hard working middle class Americans pay in income tax.
Do you really believe this is
fair taxation ? If you do, please explain to me your reasoning.
Romney pays the same rate on dividends that any investor enjoys. Income from speeches etc are not at the same rate because it’s called ‘income’. As far as offshore investments go, even the national news says that it appears (before tax return release) it’s only part of his portfolio.
I’m sure your portfolio is as diversified as his (my Fidelity is!).
Romney pay nothing on his investments they are hidden in tax shelters in the Caymen Islands.
Romney pays 10% less on his income than I do because the tax codes favor the wealthy
If you have capital gains, you are taxed in the same manner and rate as Romney is.
You just have to save some money!
Capital gains have nothing to do with the amount Romney paid in taxes on income from speaking fees.
Ha Ha , the wealthy? Most in the County would call someone with investments and 4 properties quite wealthy in their own right. May I suggest that at some point that person might sell some of them at a profit and send it to Cayman for the same haven as well?
It’s open to anyone.
Like I said, I’ll wait for his taxes to be released to see if “his investments they are hidden in the Caymen Islands.” I have a strong belief that not ‘all’ of it’s there. I’ll wait for the info before I talk in extreme generalities….
You make a lot of sense. I think I will take your advice immediately.
Congratulations!
You’re on your way to being the 1%.
Isn’t it great that the tax laws (loopholes) are available for ALL to take advantage of?
Capitalism isn’t necessarily greed, it’s the American (and now the Chinese) way!
huh
And don’t forget that great big steaming plate of “quality of place” that you bought while being paid the big bucks for working in that “creative economy”.
GADDS!
Where do these moonbats come from and how did we allow them to take over our state?????
Environmentalterrorism will kill Maine and the nation.
Ask First Wind for a check(bribe), they
will help you by handing back to you someone else’s money, and laugh
all the way to the next bribe.
First Wind has never paid a bribe with their own money, it is always the taxpayers!
I work in Bingham where First Wind has been working on establishing new transmission lines and doing site work for a wind farm. All the work, so far is being done by an out of state contractor (Michaels). They are using their own workers (from Wisconsin mostly) and their own equipment. There is not a single local worker on the project. They are renting down in Skowhegan. There are plenty of woods workers, construction workers and laborers to be had locally and many need the work and would be willing. Instead, First Wind has imported a union out of state contractor, that needs to be transported and housed (30 miles each way). This is not, what I call, creating jobs and helping the local economy. First Wind and the other wind generation outfits have promised big things to the locals and all of the people of Maine but if this preliminary work here in Bingham, that I’ve observed, is an indication of the trustworthiness an integrety of these people, boy, are we in for big people. As a side thought:
how is wind generation going to help the state of Maine meet its goal of 20% electric self sufficiency if the wind generated electricity goes out of state?
Nice work. Finally, some persons in Augusta managed to push back on those living large in Boston that had drawn a bead on the dumb hicks in Maine to bleed them dry. Fortunately, it was caught in time along with the scamming solar panal cabal. Now for some serious business.. Revive Maine Yankee with a modern 3rd generation nuclear plant.. efficient, effective, low-footprint, eco friendly, reliable and will provide inexpensive power to Maine homes and industry.
I agree, Coolfusion. And “dumb hicks in Maine” is exactly what they think of us. I remember in 2010 when First Wind’s Neil Kiely told a roomful of Carroll residents that the Bowers project, in their backyard, will help reduce Carroll’s above-average cancer rate! The meeting was being recorded by a resident, I only wish I could find that tape. Wouldn’t that make a great TV ad?
Once the brakes are put on and First Wind doesn’t have clear sailing for their grand plan, we will see them pull out and fast. Wind power is NOT free. It will cost us all ALOT!!!!!…There is only 1 reason why a company does something…More MONEY……
An investment would have capital from private parties looking to make a profit. However, this is not the case. This “investment” is our tax dollars being doled out by the federal government to finance an industry which has no way of be being even self sustaining let alone profitable without the infusion of tax dollars. As a country we would be well on our way if every hair brain business model was financed by our federal tax dollars.
How does PUC consider the future energy benefit of a source without any fuel costs? We all know that wind and other renewable energy resources will not have to consider the impacts of an ever escalating cost of fossil fuel since the source of energy (e.g., wind) is free. A reasonable mix of fuel independent energy resources will ensure a cost-stable supply for future generations. By allowing the establishment of a nearly fixed return for the purchase of renewable energy resources which might be higher than current rates for electricity during the first few years of operation will ensure a relatively cheaper source of electricity in the future under the realistic assumption that fossil fuel will continue to increase as supplies become limited. How does PUC consider the benefits of introducing sources without environmental impacts into the electrical mix? Obviously some imaginative and creative regulations have to be formulated to address future needs.
While wind energy has low variable cost they have extremely high fixed cost (financing) to their generation output (cost per megawatt hour). Wind energy projects are very high risk ventures which require premium rates of return for investors and lenders. Wind turbines are also very costly to purchase relative to their low capacity factors. The expiration of the 30% investment tax credit and government loan guarantees means that wind project financing costs will now increase by a factor of 2 or 3 times. As far as environmental impact considerations, while wind energy dosesn’t create emissions the offline backup generation does so its a wash. What the PUC also considers is that Maine does not have the transmission capacity to move more power than currently generated without significant grid expansion at a cost of billions of dollars.
The free fuel is touted much, implying a benefit, but only to the company. They do not have to pass the savings on to the consumer.
But fossil fuel is abundant now-and
for for decades , at competitive costs, and demand is down, and
recovery will be years, and we can’t pay the derivatives manipulators
for their errors with tax payer money forever.
Truthfully be transparent , tell all that 50 cents a KW/H for electrons is at hand
if not stopped, and Mainers will give you the answer to this
all.
The PUC has.
Wind is only considered free because the high cost of development is foisted on us, and we get little with too much cost .
Abutters lose their property value, environment and
potential health to them as well. .
Do you want a barrel of oil, or a barrel of wind.., to power modernity.?
Is something of value worth more than something worth next to nothing?
.Low density sources cannot ever power modernity, with
dense sources on hand .
By the time these wind assets make some money, they will be rusting hulks, because you cant defy the laws of thermodynamics for power produced.
And as we all learned, we can’t go to the moon every week on a profitable basis.
The whole concept in today’s economy of wind is hot air, even Europe recognizes
it,
now that it is going broke.
This is an extraordinary victory for the citizens of Maine. Additionally, the Oakfield First Wind project is a disgrace to the DEP as it ignores hundreds of citizen petitions and fails to assess the incredibly weak financial case for First Wind. Wind Power is not financially viable in Maine! Only massive federal subsidies keep it alive – monies we don’t have!! Adding to the deficit. Natural gas and hydro have hundreds of years of supply – wind power is absolutely a sham in Maine. Let’s see one, repeat one, successful and profitable wind application – they don’t and won’t exist in Maine – even with federal subsidies (aka bailout) DEP should hold public hearings. Where is the clamor for public hearings?
Dr. Peter Connelly Island Falls, Maine
How about a citizens initiative.Seems like one gets started about every week for something.
From my discussions with family and friends that are still in Oakfield, they still narrow-mindedly believe that this is their Golden Goose. Heck, It’s my aunt (by marriage) that’s providing the family farm and Sam Drew’s Mountain for this future junk pile. Nobody will get any backers for a petition against it (my belief).
Weren’t the Oakfield residents promised their property taxes would be paid if they voted for the Oakfield windsprawl? think that is illegal according to the state TIF regs. They may not be direct payments, but paid for under the community benefits package, which amounts to the same thing. No thanks to the legislators , who were once again napping when they should have studied the proposal before voting it in. The Carrol residents were bribed in a similar fashion, with their elec. bills paid too. I guess that is what environmental lawyers do, orchestrate a bribe package and mislead legislators with glib BS.
From what I understand, they thought their taxes wouldn’t go up for the years that the Goose laid the Golden Eggs. The electricity is going to Canada and Cape Cod, but they think it will stabilize their rates.
Don’t blame the lawyers. there were none really involved except the ones doing Obama’s bidding and the consequence of promising the states money for this debacle of “being green”. Of course the states took advantage of the federal money without thinking it through any more than Obama did. It was rushed through like TARP. Blame it on a naive rush for the money from a desperate “Hope and Change” idealistic gov’t that plays on every desperate sucker’s belief that the Feds will take care of us (sadly, with their trusting and naive blinders firmly in place and not to be looked outside of). I’ll bet you 10-1 that there is no ‘clawback’ provisions included in the contracts in case they go belly up before completion, nor when the rusted hulks need removal at the end of their lifespan. Beware the carpetbaggers that just want to make the money and run, never to be seen or sued again! No one thinks of that.
Thanks for listening to my rambling diatribe….
It cost .37 cents PKH to produce electricity from wind. People in Maine pay less than.18 cents PKH presently. We have trouble paying our existing electrical cost now, and wind energy will simply brake our backs. Another OBAMA & Baldacci deliberate screw up. OBAMA said we would see our electrical cost double. Unbelievable!
I do not disagree with JustAGnome since the points made in the response to my comments make a great deal of sense. A wind project is highly dependent on location since energy derivable from wind and also from hydro-kinetic sources is proportional to velocity to the third power which means that you obtain eight times more energy for a 20 mph wind as compared to a 10 mph wind. The other problem with large wind projects is the need to include a mechanism in the design to rotate the turbine towards prevailing wind conditions which greatly increases costs while increasing susceptibility to noise generation and mechanical malfunctions. Historically, wind projects do not have net energy production since the cost of manufacturing, operation, and maintenance will exceed the energy produced during its limited lifetime. The increase in the number of wind turbine installations was also due to the design of longer blades which still have not passed the long term test of fatigue and creep. Off-shore wind off the coast of Maine is expected to generate eight times the energy during winter when compared to summer conditions which represents a major problem for integration into the utility. Off-shore wind projects are more expensive than on-land wind due to higher costs for construction, maintenance, and energy transmission. The feasibility of off-shore wind will depend on the availability of longer blades which will increase susceptibility to fatigue, stress corrosion, and creep failure. Wind energy is not the perfect resource; however, regulators need to expand their standards to recognize the positive benefits of renewable energy resources while properly considering engineering and scientific data on project assessment. We should not forget than small is beautiful and more manageable.
Yes accountnow!
We need some”‘accounting and tracking” here, as DE Shaw’s derivative
manipulations are going to break this state.”feasibility of
offshore wind projects are more expensive…..”, and guess what,
citizens of Maine are wakening to the fact of the scam, and
you can pay for your own stinkin’ turbines at 50 cents a KW/H!!!!
I wish there was a natural gas line close buy, and I might start
another business and hire 10 workers, but from what I see, if Maine
does not act to stop this scam, there will be no businesses who want to be here.
RGGI should be killed, and Maine should work to leave ISO if the
governor really hopes to lower costs for electrons.
Bring on the Natural Gas ,and release the H2O in Maine please.
I am thinking of the Enron debacle in California. Smaller is better. L.A. owned its own generators and Enron did not control them. When the “gamers ” started shuttling energy out of state to drive prices up, L.A. was not affected. The rest of Ca. got whalloped with a 30 billion dollar donation to Enron. You mention no net energy production, the same applies to the carbon. It takes more C02 to build wind turbines than they can ever save, especially when replacinghrydro for ZERO savings. Do you have a link to the negative net energy production?
Finally! I am tired of people making decisions for us that continually raise the cost of living in this great state!
As others have (repeatedly) stated throughout this venture, without the “stimulus” (paid for BY the taxpayers) money providing the funding, these machines could not be affordably built and installed.
In their estimated 20-year lifetime they will not generate enough electricity to even pay for themselves, let alone turn a profit – and – they are not an alternative to cowardly, treasonous government: the lowly corporate pirates – who have taken America hostage.
It seems that the Maine PUC has defended Maine’s people against some of them.
======
My new “signature” motto:
ANY politician – even down to towns’ “select” persons – who will not actively encourage and support
monetary reform – through VALID education – is not worth the paper their election ballot is printed on.
the only good these turbines do for maine is the construction jobs to install them.We should be thankful for the work over the last few years.Now shut them down and dry our undies on them.
timjy, as I said in the very first post, they are providing absolutely no local jobs up here in Bingham, nor will they. It is being done by a union contractor and his workers all come from Wisconsin. They are working today (Saturday)….time and a half, room and board, travel expenses. Sweet deal for someone but it sure as hell isn’t for anyone local.
They hired a few here in Lincoln, but the same deal …lots of out of state license plates.
How about the jobs to remove them and restore the landscape and allow the trees to grow back ? Let’s get started…
Big OIL says NO to wind power !!! Our Republican Gov just went public urging everyone to vote against wind power…..I’m so glad we have LePage to help us decide…..after all….we KNOW we can trust HIM ! Right ? Aren’t special interests great ? Have fun with those high oil/electric prices…..I am quite happy with my personal “OFF GRID” windmill : )
Good idea, I will bet it is not 500 ft tall.
Thats the best news for Maine !!
Keeps our energy rates low!!
However in California where there is a lot of wind power the rates are very low for wind powered electrictial power..Guess WHY… The state is providing funding..
WHERE DOES THE STATE GET THE MONEY??? YOU!!
so much for low cost wind power
Thank goodness the only investigative journalists left in Maine developed this story and BDN published it. The media in this state have been complicit with the wind industry as it continues it’s relentless destruction of the uplands of Maine to reap in the subsidies while they last.
The PUC staff and the Public Advocate need to scrutinize the wind industry. What now thrives on subsidies will end up gouging ratepayers. When mandates for the most costly and least effective source of electricty force us to include wind in our electricty bills and the subsidies are gone, there will be a huge impact on ratepayers. We have been hit by stranded costs before and the wind scam will make the others seem dwarfed by comparison. We need to get out of RGGI and defeat the proposal gathering signatures now to mandate 20% new renewables being forced into our electricity generation mix.
Lastly, notice that First Wind spokesman is using the tired old line of the temporary construction jobs and the investment figures to respond. He will never comment on the criticism of First Wind finances nor will you ever see them touting the output of these useless turbines which never reach 25% capacity factor (output). It is pathetic that we are allowing the destruction of miles of ridgelines and setting ourselves up for economic disadvantage by foolishly embracing the folly of wind.
Ken Fletcher, Governor LaPage and now the Maine PUC are absolutely right.
Renewable mandate manipulation , and the attempted subversion of Maine Energy Law which demands separation of generation from transmission authority for the concept of competition in the energy arena for Mainers,has been under attack for years now.
It is under attack by DE Shaw’s scoundrel, well attached First Wind , (also known as Enron’s bastard son) who would do nothing but make electricity more expensive for Maine’s ratepayers. Already, Endure , a new shell company, is ready to go. DE Shaw , a major contributor to Obama’s reelection, is not going to stand still. Maines energy shills are already planning a response.
Wind toys only reward Maine’s power elite , who subsidy suck on the teat of Obama’s failed subsidization of renewable energy scams, such as Solyndra.
First Wind is another Solyndra.
Well done Maine PUC! Now, lets see if this sticks!
Well done Maine businesses involved, if nothing else so that your energy and financial survival may be preserved in this electrically high cost state.
To Kurt Adams et al , Angus King and son, and other subsidy suckers, “if you can’t make it there, you can’t it make it anywhere”. Your failed IPO on Wall Street, of the scoundrel First Wind LLC shell game by DE Shaw ,can only scam so far.
They may have been able to shove LD-2283 down a naive legislatures throat in 2008 with a dim bulb governor lighting the way named Baldacci, but this attempted underhanded energy coup is a bit too far for even some in power positions in Maine.
Finally , an agency of Maine, the PUC, (the “P” standing for public), does its job.
KUDOS to you, Maine PUC.
The reality is the Baldacci administration was either incompetent, naive, drunk on green Koo-aid or heavily involved in cronyism to get involved with First Wind– and because of this, this lunacy has pervaded our state.
We elected a new administration and a new legislature to stop this wastefulness and to put the people first.
I hope the LePage administration really helps to start to control Maine’s high ELECTRICAL RATES!
LePage has to stick to his guns.
The “Powers Of Nature “(Renewable Subsidy Suckers) are not happy now!
Now let us hope the rest of the legislature does their job concerning the reigning- in of this and other scoundrel , subsidy sucking wind companies , such as First Wind , (Enron’s Bastard Son).
Be still my heart cause maybe the PUC will not allow another consumer rip-off by money hungry CEO’s to trash our state with their lies and greed. Do we all remember when we asked the PUC not allow Fairpoint taking over Verizon yet they voted and yes and what did that get us? Do you remember the lies told to the people of Mars Hill about the benefits of putting all those wind mills on Mars Hill Mountain and how they would reap benefits back with lower electricity costs? Instead Mars Hill residents are left with an ugly mountain, noise levels that cause hearing problems, irate neighbors and their electricity going to Canada and not to them. And the list goes on and on … Please continue to listen to the people and not these hair-brain ideas that are only good for them and not the residents they say will reap the benefits and remember if it walks like a duck, quacks like a duck it is not a swan.
Well said Lauri!
But they can sell Rec credits to the coal industry so they can keep spewing pollutants and not conform to new emisson regs.. how is windsprawl “clean and green”?
Thank you, BDN, for running this story, and thanks to both Naomi Schalit and John Christie for their excellent investigative journalism. Mainers need to be privvy to what’s going on behind closed doors in the wind industry here in Maine. Thank you, PUC, for protecting Maine’s business and residential rate payers. My question, is Iberdrola (building industrial wind turbine generators on Maine’s mountains) who owns CMP (transmission of electricity to Maine rate payers), also in danger of violating Maine’s Electric Restructuring Act?