More than four years ago, Maine utility regulators approved a contract that was essential to the development of an offshore wind project that has the potential to lower the state’s energy costs and to create much-needed jobs.
But, in January, the Maine Public Utilities Commission balked at the contract’s terms, which include higher than market electricity rates during the project’s demonstration phase. The utilities commission will soon consider whether to reopen the contract.
For one, doing so would jeopardize more than a decade’s worth of research and development at the University of Maine in Orono. It also puts at risk Maine’s potential to pioneer floating offshore wind turbines, allowing other states and countries to reap benefits that should remain in the Pine Tree State. Last month, U.S. Interior Secretary Ryan Zinke touted the “enormous potential” of offshore wind power to move the country toward energy independence. Other states are already hard at work on offshore wind project of their own, but they are not as far along as Maine’s.
Reopening the contract would also send the message that Maine is not an honest broker when it comes to business negotiations and agreements.
Maine, unfortunately, has been down this road before. Because he is not a fan of wind power and other alternative energy sources, Gov. Paul LePage succeeded in quashing a Norwegian company’s plans for $70 million investment in wind energy development here. In exchange, he threw his support behind UMaine offshore wind project.
Now, the utilities commission, whose members were appointed by LePage, is threatening to delay, and possibly upend, the university project, putting at risk $40 million in federal money that is destined for Maine.
In 2014, the commission approved an agreement between Central Maine Power Co. and the Maine Aqua Ventus project, the name of UMaine’s test project, under which CMP would buy power generated by the project for 20 years.
The university plans to install two test turbines in waters off Monhegan Island. It would be the first test of floating turbines in North America. If the test of a UMaine-patented technology is successful, it could propel the state to a leadership role in offshore wind energy, which could mean more investment and much-needed jobs.
In 2016, the U.S. Department of Energy picked the UMaine project as one of two — out of 70 — slated to receive $40 million in federal funding. The university is continuing to conduct environmental impact studies and is working toward obtaining state and federal permits for the project.
Voters, in 2010, approved a $26.5 million bond that included money for an offshore wind demonstration site and private industry, including Cianbro, has invested millions of dollars in the project, which aims to develop a source of electricity that doesn’t emit greenhouse gases that contribute to climate change.
Now, this is all in jeopardy, as the commission considers reopening the 2014 contract. Commissioners have argued that much has changed in the energy world since 2014, such as lower natural gas prices and declining solar energy costs. These are valid concerns, but the UMaine project will have only a small effect on electricity rates — about 73 cents a month for an average customer during the testing phase. If the project is fully developed, electricity rates are expected to be well below what Maine ratepayers are currently paying, and it will be a cleaner source of power.
The university’s Aqua Ventus project has been vetted by state, local and federal officials for years. Reopening the contract not only adds unneeded delay, but also allows the project’s opponents to fight battles that have already been resolved.
It would, again, show that Maine is not an honest broker when it comes to business negotiations, especially if a project is controversial or doesn’t align with the governor’s whims. “It damages the prospects for future private investment in Maine if a state government develops a reputation for repudiating or nullifying its agreements,” David Flanagan, the former president of CMP, said in comments filed with the commission asking it not to reopen the contract.
A contract is a business agreement that shouldn’t be changed without urgent reason. There are urgent reasons — climate change, high electricity rates, UMaine’s wind power leadership — for Maine to move ahead with Aqua Ventus. There is no reason to delay it.
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