A Maine Public Utilities Commission staff recommendation to reject what could be an $880 million partnership between First Wind and two other companies would deny “a massive boost to Maine’s economy” while hindering First Wind’s ability to help the state meet its aggressive wind energy goals, the company said Tuesday.
First Wind said in a 13-page legal opinion that the PUC staff position is inconsistent with state law, wrongly suggests that First Wind would discriminate against state utility companies, and would — if adopted by the commission — hamper future investments in Maine by First Wind, the state’s largest wind developer.
“First Wind is not confident that it can aggressively pursue future wind power development in Maine if the First Wind Transaction is rejected,” the opinion states. “At best a rejection will cause a significant multi-year hiatus in most of First Wind’s Northeast development work as it pursues new sources of capital.”
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.
Tony Buxton, an attorney representing Industrial Energy Consumer Group, a 25-year-old trade association representing large energy consumers that opposes the joint deal, said he found it surprising that First Wind would claim that financing is a driving force behind its push.
Buxton pointed to a transcript of a PUC hearing on Oct. 6 in which First Wind President Michael Alvarez said that while Emera’s financial involvement in the deal is welcome, First Wind’s ability to attract future financing does not depend on that company’s participation.
“We are inclined to continue to believe Mr. Alvarez’s testimony given under oath,” Buxton said Tuesday. “It is pretty clear that there are other investors who are not utilities who will provide capital to First Wind projects.”
“First Wind just completed a $50 million financing in Hawaii. That shows that they can raise money for wind projects that does not come from an affiliate of a regulated utility in Maine,” Buxton added.
The PUC staff recommendation announced Friday opposes the joint venture because of fears that it would lead to higher electricity rates for ratepayers and give a utility control over a power generator, which the state’s Electric Restructuring Act expressly prohibits.
Enacted in 2000, the act forced Maine’s utilities to sell off dams and power plants to avoid what effectively would have been a monopolizing practice.
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, the 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.
First Wind disagreed.
“First Wind is committed to open, competitive markets and neither seeks nor expects any competitive advantage through the First Wind Transaction,” its opinion states. “The suggestion that First Wind will engage in discriminatory or preferential dealings in its relationship with Bangor Hydro or Maine Public is simply unfounded. First Wind has been successful in wind energy development in Maine and across the country and maintains an excellent reputation.”
Information from a previous article written by The Maine Center for Public Interest Reporting is included in this report. The center is a nonprofit, nonpartisan news service based in Hallowell. Email firstname.lastname@example.org or visit pinetreewatchdog.org.