April 11, 2012
Maine

Maine PUC OKs Maine-Nova Scotia consortium investment in First Wind

Reported By: Tom Porter, The Maine Public Broadcasting Network, www.mpbn.net 11 April 2012

State energy regulators have gone against the recommendations of their own staff and approved a deal worth several hundred million dollars that could see a quadrupling in the number of wind turbines in the region.

The three members of the Public Utilities Commission gave the verbal go-ahead yesterday for a couple of Canadian utility companies, Emera of Nova Scotia, and Ontario-based Algonquin Power and Utilities, to invest $300 million in Massachusetts-based First Wind.

The deal, which still needs written approval from the PUC, would involve the creation of a joint venture to be 51% owned by First Wind. Three quarters of the remaining stake would be owned by Emera, parent company of Bangor Hydro and Maine Public Service company, which between them serve more than 150,000 customers in Maine.

“It basically provides some capital for First Wind to develop additional projects but also to keep the projects that it now has on its plate operating,” said PUC Chairman Tom Welch.

First Wind currently generates nearly 400 megawatts of electricity in Maine, Vermont and New York State. About half of that comes from the 3 wind farms it operates in Maine – at Mars Hill, Stetson, and Rollins. The company has 2 more here under development.

Adam Horvitz is a planning director at First Wind who worked on the new joint venture.

“It’s a great transaction, a great opportunity for our company, and we think it’s a great transaction for the state of Maine,” said Horvitz. “This deal will likely result in significant investment in future wind projects in the state.”

PUC Chair Tom Welch said the deal has the potential to have a significant economic impact on the state.
“If, and this is a significant if, if there is significant additional development, in the hundreds of megawatts of wind, which I think will be facilitated but not guaranteed by this transaction, then I think you could looking at hundreds if not thousands of jobs,” Welch said.

The PUC also welcomed the deal for helping the state towards meeting the aims of the 2008 Maine Wind Energy Act, which sets a goal to have 2,000 megawatts of wind capacity by 2015 – that’s about 5 times the current level.

In approving the venture, the three commission members went against the recommendations of the PUC staff, who had expressed concerns about the potential loss of market competition.

They argued that the deal violates the Restructuring Act of 2000, which aimed to help consumers by preventing companies from owning both the means of generation, and the means of transmission and distribution, something which critics believe could lead to rate increases.

These concerns are shared by Tony Buxton, an attorney for the industrial energy users who opposed the deal.

“When a utility acquires generation through an affiliate, it has a tendency to favor that affiliate in making decision about who gets to sell power where and when and how much it costs and many other decisions that really negatively effect the competitive market,” Buxton said.

The deal’s opponents are not reassured by the arguments of of PUC chair Tom Welch. He said the commission would prevent such anti-competitive behavior by scrutinizing any investment decision made by the utilities involved.

While Buxton said he’s not opposed to the principle of wind power development, the same cannot be said of Chris O’Neil.

“This transaction has the potential to throw open the door to a blitzkrieg of wind power in Maine unlike any land-use change in Maine’s history,” O’Neil said.

He’s a spokesman for Friends of Maine’s Mountains, a group opposing the development of large-scale wind power projects.

Wind power, he argues, is an expensive and inefficient form of producing electricity that relies on government subsidies to be viable.

Supporters however argue that these subsidies are needed to attract investment and develop the industry so that one day it can be independently viable.