AUGUSTA – The Maine Department of Environmental Protection is asking First Wind, Maine’s largest wind power developer, to prove that it has enough money to build four major projects that are in different stages of construction and permitting.
The request follows a Maine Supreme Judicial Court ruling last month that the state’s Public Utilities Commission erred when it approved a joint venture between First Wind and Emera Inc. of Nova Scotia, the energy company that owns two utilities in northern and eastern Maine. The projects that the DEP is scrutinizing had millions of dollars in financing from Emera, money that First Wind now can’t use.
The PUC is holding meetings to decide how to comply with the court’s ruling.
The DEP’s request affects four wind-energy projects: Oakfield Wind in Aroostook County, Hancock Wind in Hancock County, Bingham Wind in Somerset County, and Bowers Wind in Penobscot and Washington counties. Taken together, the projects could cost about $1 billion to build.
“The Law Court’s decision on First Wind and Emera’s relationship throws into question the validity of financial capacity documents relating to four wind projects,” Jessie Logan, a DEP spokeswoman, told the Portland Press Herald on Tuesday. “The department is committed to working aggressively with First Wind to ensure all license conditions are met.”
The DEP is scheduled to release a statement Wednesday about its request to First Wind, she said.
The department is asking First Wind for the information because applicants for wind-energy projects must show that they have enough money for construction and maintenance, and for restoring sites after wind farms go off line. The proof can be in the form of a performance bond, a surety bond, a letter of credit or other financial assurance acceptable to the DEP.
Late last month, First Wind announced that it was seeking to raise $75 million through a bond offering to institutional investors. The company’s spokesman, John Lamontagne, said Tuesday that the deal has closed and the company received the money last week.
He would not say whether another bond offering is in the works, but he noted that Emera isn’t the only source of capital available to the company.
“First Wind has an outstanding track record of raising funds over the last eight years,” he said. “Since 2006, First Wind has raised more than $7 billion in capital to develop, build and operate renewable energy projects across the country. We’ve invested nearly $1 billion in Maine to date, and plan on investing more than that in the coming years.”
Each of the four projects is in a different phase of permitting or construction.
The Oakfield Wind project is under way, with land being cleared for roads and turbine pads. The $400 million venture calls for 50 turbines and a capacity of 148 megawatts. It would be among the largest in Maine, able to power 50,000 homes. The project is expected to go on line next year, Lamontagne said.
Hancock Wind, near Ellsworth, has DEP approval but construction has not started. It would be rated at 51 megawatts and have 17 turbines able to power 17,500 homes.
Bingham Wind’s application materials are now being reviewed. Rated at 186 megawatts, it would be larger than Oakfield Wind and have an estimated cost of $400 million. It would produce enough power for 70,000 homes.
The Bowers Wind project was initially denied by the DEP, but First Wind has appealed to the Board of Environmental Protection. It’s rated at 48 megawatts and has 16 turbines with the capacity to power 22,000 homes.
The DEP made its request to First Wind in letters dated March 12 and 13, pertaining to the Oakfield, Hancock and Bingham wind projects. The department gave First Wind 60 days to describe how it will now meet its financial capacity requirements.
The request for Bowers Wind will wait until after the appeal process runs its course, the DEP said.
A condition of the DEP’s approval of Oakfield Wind in 2012 required First Wind to submit final financing materials before construction. First Wind complied on Sept. 6. A condition compliance order was granted Oct. 7, 2013.
The financing package included contributions from Emera. In its letters last month, the DEP requested that First Wind provide alternative financing documents that describe how the project’s construction would be financed without potential contributions from Emera.
First Wind also posted a restoration letter of credit to the DEP. That letter commits the developer to fully restoring the site if the project isn’t completed.
Friends of Maine’s Mountains, a citizens group that opposes large wind farms along the state’s rural ridges, applauded the DEP’s request.
“We are pleased that DEP is watching this threat,” said Chris O’Neil, a spokesman for the group. “There would certainly be an environmental impact if partly constructed wind turbines end up being abandoned. That said, we are far more wary of First Wind abandoning their present wind turbines, which could result in thousands of tons of junk spattered all over our mountains.”
Gov. Paul LePage has been highly critical of wind power, saying that it’s too costly and that public money would be better invested in developing natural gas or other forms of energy that would give more immediate relief to Maine residents, who pay high rates for electricity. He has pushed legislation that would slow the development of wind farms.
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