PUC staff: No go for energy firms’ wind deal

Published on Friday, Jan 20, 2012 at 12:12 am | Last updated on Friday, Jan 20, 2012 at 12:12 am

But in just the past week, the Maine Public Utilities Commission dealt a potentially fatal blow to the deal.

Faced with what opponents have called the first serious challenge to the state’s landmark electricity deregulation law, which went into effect in 2000, PUC staff on Jan. 13 recommended that the agency give a 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 PUC commissioners 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, Emera Inc. (the Nova Scotia-based parent company of Bangor Hydro and Maine Public Service) and Ontario-based Algonquin Power and Utilities Corp. 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, as well as a way for Emera and Algonquin to reach new energy consumers in the U.S.

At last count, there were 312 legal filings in the case, a brigade of lawyers from Maine’s top law firms and state agencies, briefs, motions and documents that referenced Hemingway, Shakespeare and Lady Gaga and a subpoena served on an Emera official by a retired Canadian Mountie.

The case centered on two legal issues: Was the proposal in the interest of ratepayers, and would the deal violate the state’s “Electric Restructuring Act?” That act, which took effect on March 1, 2000, prohibits utilities from owning both transmission and generation, which forced the state’s utilities to sell off their dams and power plants. After what came to be called “restructuring,” utilities were responsible only for delivering power, while other companies produced it — all in the hopes that it would lead to more competition and lower electricity rates.

Parties to the 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. And they said that the Restructuring Act would not be violated because Bangor Hydro and Maine Public Utility, 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 utility customers, said last week that his office opposed the deal because it could result in “higher utility prices,” thus violating the law that required a deal to do no harm to the interests of ratepayers.

Bryant said the plan would violate the Restructuring Act, too. 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,” Bryant said. “If we’re going to actually honor the Restructuring Act, you can’t allow this restructuring to happen.”

Anthony Buxton, the lead attorney for industrial energy users such as 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 draft decision rejected the opponents’ arguments that the Restructuring Act would be violated, because it would be a utility affiliate that owned generation, not the utility itself.

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.”

Read the rest of the article here:

http://www.sunjournal.com/news/state/2012/01/20/puc-staff-no-go-ene...

The Maine Center for Public Interest Reporting is a nonprofit, nonpartisan news service based in Hallowell. Email: mainecenter@gmail.com. Web: pinetreewatcdog.org.


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Comment by Donna Amrita Davidge on January 20, 2012 at 11:53am

thanks Harry- my fingers are all crossed and my prayers out there...

Comment by Harrison Roper on January 20, 2012 at 11:19am

  Donna - I don't think they ever had sufficient funding in the first place.  It was pie in the sky.

  Kudos to Naomi S. and John C. and their organization, and to the PUC. It's about time a bureaucracy stood up to the moneyed Establishment.

  I hope First Wind folds up their tents and fades quietly into the night.  If those turbines that are already erected actually make enough power to justify themselves, they should work for 20 years, and the lawyers can have a ball collecting the TIF payments, etc.  And (maybe) some towns will get their fire trucks and playgrounds. Then, after 20 years, we will all learn how much those "pre-financed decommissioning funds" were actually worth.  And if the turbines are not working, they still are required by the Federal Government to have those blinking lights operating until they come down. 

H. Roper  Houlton, ME

Comment by Donna Amrita Davidge on January 20, 2012 at 7:35am

does this mean FW is losing funding? 

Hannah Pingree on the Maine expedited wind law

Hannah Pingree - Director of Maine's Office of Innovation and the Future

"Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine."

https://pinetreewatch.org/wind-power-bandwagon-hits-bumps-in-the-road-3/

 

Maine as Third World Country:

CMP Transmission Rate Skyrockets 19.6% Due to Wind Power

 

Click here to read how the Maine ratepayer has been sold down the river by the Angus King cabal.

Maine Center For Public Interest Reporting – Three Part Series: A CRITICAL LOOK AT MAINE’S WIND ACT

******** IF LINKS BELOW DON'T WORK, GOOGLE THEM*********

(excerpts) From Part 1 – On Maine’s Wind Law “Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine if the law’s goals were met." . – Maine Center for Public Interest Reporting, August 2010 https://www.pinetreewatchdog.org/wind-power-bandwagon-hits-bumps-in-the-road-3/From Part 2 – On Wind and Oil Yet using wind energy doesn’t lower dependence on imported foreign oil. That’s because the majority of imported oil in Maine is used for heating and transportation. And switching our dependence from foreign oil to Maine-produced electricity isn’t likely to happen very soon, says Bartlett. “Right now, people can’t switch to electric cars and heating – if they did, we’d be in trouble.” So was one of the fundamental premises of the task force false, or at least misleading?" https://www.pinetreewatchdog.org/wind-swept-task-force-set-the-rules/From Part 3 – On Wind-Required New Transmission Lines Finally, the building of enormous, high-voltage transmission lines that the regional electricity system operator says are required to move substantial amounts of wind power to markets south of Maine was never even discussed by the task force – an omission that Mills said will come to haunt the state.“If you try to put 2,500 or 3,000 megawatts in northern or eastern Maine – oh, my god, try to build the transmission!” said Mills. “It’s not just the towers, it’s the lines – that’s when I begin to think that the goal is a little farfetched.” https://www.pinetreewatchdog.org/flaws-in-bill-like-skating-with-dull-skates/

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