A federal law designed to ease electricity transmission bottlenecks and improve power reliability could hit Maine ratepayers in the pocketbooks, twice.
The measure could force the construction of transmission lines to move Maine’s surplus power south. Not only could the loss of the surplus increase the price of electricity in the state, but Maine consumers would also have to pay part of the cost of building the lines.
State regulators say they are fighting to make sure the law doesn’t hurt Maine ratepayers or take away the right of Maine agencies to decide where, or if, a transmission line should be built.
Because siting and building new transmission lines is a lengthy process, any impact is likely to be years away. Regulators say, however, that key decisions will be made in the next 18 months.
Even as utilities and regulators wait to see how the law will be implemented, some companies are anticipating significant changes in the way Maine’s power is distributed.
A Massachusetts company has proposed building an underwater power line between Wiscasset and Boston.
The president of that company said he believes the project will bolster Maine’s growing renewable energy industry without hurting ratepayers.
The underwater power line may be only the first of several proposals to build new transmission capacity.
The Energy Policy Act of 2005 gives the federal government the power to preempt state and local government agencies in order to encourage the construction of new transmission lines in areas where bottlenecks exist or are projected.
According to a study by the Department of Energy released in August, one area with transmission congestion is Maine’s border with New Hampshire.
Under the new law, if the federal government decides there is a need for new transmission, it could force the construction of power lines, overruling objections from state and local agencies, including planning boards and utility regulators.
Kurt Adams, chairman of the Maine Public Utility Commission, said the new lines could drive electricity rates up for Maine consumers by essentially draining the power surplus that keeps rates in Maine lower than the average in New England and sending that power to Boston.
Under the Energy Policy Act, the Department of Energy has to designate an area a “national interest electricity transmission corridor” before it can force the construction of transmission lines.
The agency moved a big step closer to designating a corridor in Maine when it identified “congestion area of concern” on the Maine -New Hampshire border in a study released in August.
Mark Whitenton, deputy director for permitting siting and analysis at the Department of Energy, said that while it is possible that a transmission corridor will be designated in Maine, no decision has been made.
If a corridor is deemed necessary, there will be a full opportunity for public comment before the proposal is finalized, said Whitenton.
He said there is no schedule for when the proposal will be made.
Adams said the Maine Public Utilities Commission is working hard to make sure that such a corridor is not identified in Maine. He said the commission has also identified serious errors in the study that led to the identification of the Maine-New Hampshire bottleneck.
Adams said the designation of a national interest electricity transmission corridor in Maine would take away the rights of Maine citizens to fight the siting of the transmission line by appealing to their state and local governments.
It could also allow a transmission line to be sited in violation of Maine’s environmental laws and local zoning requirements, according to Adams.
But perhaps the most widespread impact would be the effect the law could have on ratepayers. Maine now has about 3,300 megawatts of generating capacity, although it uses only about 2,400 megawatts at peak – most days Maine residents use between 1,300 and 1,800 megawatts.
That surplus of power means that the least efficient and most expensive power plants are only used when electricity usage climbs toward peak. If the surplus were to disappear, electricity would become more expensive.
Adams said that Maine has been a net exporter of power for the past two decades.
With the current interest in wind power, Maine could export even more power in the future, he said.
State officials have estimated that there are about 1,000 megawatts of wind power projects either under construction or on the drawing board in Maine. Adams said there is a legitimate argument that the constraint in transmission capacity causes Maine’s surplus.
The issue for Maine, however, is how to address that problem and whether Maine consumers should be required to subsidize consumers in Massachusetts, where siting a power plant is much more difficult, he said.
The president of a company that has proposed building a new transmission line to address the imbalance said he believes the project need not drive Maine electricity costs higher.
Ed Krapels, chairman of the New England Independent Transmission Co., said his company’s proposal to build a 660-megawatt underwater transmission line between Wiscasset and Boston will help solve Boston’s lack of capacity without the need to preempt Maine environmental laws.
Krapels said building the line – which his company has dubbed the “green line”– under water is the most environmentally friendly way to deal with the transmission bottleneck. It also avoids conflicts with property owners associated with building on land.
And Krapels said the project would also provide a way to transmit energy from renewable power projects in Maine to southern New England, where there is a tremendous appetite for green power.
The lack of transmission capacity to get green power to markets that offer a premium for it is a real problem facing potential investors in Maine wind or biomass energy projects, he said.
By providing a sort of highway to move renewable power south, Krapels said his company believes the new transmission line will encourage the investment of “millions and millions” of dollars in Maine.
If that happens, he said Maine’s power capacity may grow quickly enough to prevent a price increase even as the state ships more electricity south.
BY Alan Crowell
Kennebec Journal & Morning Sentinel
474-9534, Ext. 342
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