A new study of the legalities and logistics of an electrical utility partnership involving Maine and New Brunswick shows no significant barriers to such a cross-border collaboration.
It also shows “significant economic and environmental benefits” are possible on both sides of the border through closer coordination in the production and transmission of electricity.
“We’ve been looking at how to best develop cross-border operating agreements that address control and common operating provisions,” said Dick Davies, Maine’s public advocate. “It appears from this study that there aren’t any insurmountable obstacles to moving forward.
“We are dealing with governments that have much in common, but include governmental entities that are not perfectly matched up in terms of regulatory agencies.”
Davies is serving as the state’s point man in pursuing the goals of a memorandum of understanding signed in February by Governor John Baldacci and Shawn Graham, the premier of the province of New Brunswick.
That memo notes that the Northeastern United States needs new supplies of electricity, especially power produced by renewable sources such as hydroelectric dams, wind farms and tidal generation. As a matter of geography, Maine and New Brunswick represent gateways for moving new sources of electricity from Atlantic Canada into the Northeastern United States.
The report on electricity cooperation recently released during a conference of New England governors and Eastern Canadian premiers notes there are several thousand megawatts of new, renewable and low-carbon resources potentially available in Maine and Atlantic Canada.
“New Brunswick and Maine sit at the edge of the Boston-Washington, D.C., megalopolis, a region of intense economic activity and corresponding demand for energy,” the report says. “Looking forward, demand will be particularly strong for renewable and low-carbon resources.”
The report notes that all the New England states have joined the Regional Greenhouse Gas Initiative (RGGI), as have New York, New Jersey, Delaware and Maryland. RGGI will cap carbon dioxide emissions from power plants at current levels in 2009 and then ratchet down emissions by 10 percent, beginning in 2015. New England states also have renewable portfolio requirements that specify amounts of renewable supply, with those requirements increasing over time in most states.
“At the same time demand for low-carbon and renewable power is growing, it is increasingly more difficult and expensive to site new facilities in the Boston-Washington region, and the availability of certain types of renewable resources, e.g. hydro, is particularly limited,” the report says. “New Brunswick and Maine, as well as the other Atlantic Provinces, appear uniquely positioned for new resource development to supply these markets due to our regional advantages in terms of resource availability, siting and cost.”
Davies said the Maine Public Utilities Commission continues to study the regulatory structure now in place as part of a coordination agreement between Manitoba Hydro and utilities in 15 cross-border Midwestern states. That system works without requiring identical market structures in both countries or altering regulatory oversight in the respective national jurisdictions.
Ultimately, Davies said, consumers in Maine could benefit from a cross-border collaboration in the form of lower electricity rates.
“We believe there is good potential for that,” he said. “We’re not absolutely, 100 percent sure yet, but there is a high level of confidence.”
Given what Maine residents are paying for electricity, that’s good news. At the end of last year, Maine ranked 46th among all states and the District of Columbia for having the highest electricity rates across all sectors of the economy. At 13.32 cents per kilowatt hour, Maine was well above the national average of 8.49 cents. Rates in New Hampshire, Massachusetts and Connecticut were even higher than rates in Maine.
By Tom Walsh
5 July 2007
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