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The Maine Department of Environmental Protection wants wind power developer “First Wind” to prove that it can still finance three of its projects in Maine. Last month, the state’s highest court ruled that the Maine Public Utilities Commission erred when it approved a joint venture between the company and the utility Emera Maine. Emera had pledged to invest $333 million into the venture, which would have given it a nearly 50 percent stake in First Wind’s developments. Jay Field has more.
When the Maine Supreme Judicial Court made its ruling, officials at the Department of Environmental Protection immediately began a review of First Wind’s projects in the state. They include the Oakfield development in Aroostook County, the Hancock project in Hancock County and Bingham Wind in Somerset County.
Permission for a fourth project, Bowers Wind in Washington and Penobscot Counties, was denied by the department, a decision that’s now being reviewed by the state Board of Environmental Protection.
“Applicants for wind energy projects must demonstrate financial capacity for construction, maintenance and decommissioning costs,” says Jessamine Logan, communications director at the Maine DEP.
Logan says there are a number of ways a company can do this. “This can be in the form of a performance bond, surety bond, letter of credit or other financial assurance acceptable to the department – like cash,” she says.
Logan says the Oakfield wind project – where construction is already underway – and the Hancock and Bingham developments – which are in the planning stages – were all depending on the $333 million that Emera planned to invest into JV Holdco.
But the high court said the Maine Public Utilities Commission erred in appoving this joint venture. Shortly after the ruling, Logan says the DEP sent letters to officials at First Wind, “stating out the department’s concern that the project financing has been effected by the law court’s decision,” Logan says. “And the department requested that revised material be submitted to describe how our financial capacity requirements will be met.”
“We are going to have a meeting with the DEP very soon,” says John LaMontagne, a spokesperson for First Wind. “With them, we’re going to share our long track record of raising funds over the life of our company. Since 2006, First Wind has raised more than $7 billion in capital to develop and operate and build renewable energy projects across the country, including $1 billion in Maine to date.”
The joint venture with Emera, LaMontagne notes, wasn’t the only source of funding for First Wind’s projects in the Northeast. “Last week, we closed on a $75 million bond that had been in the works for several months,” he says. “So, I think that offering is further evidence of First Wind’s ability to raise capital from a variety of sources.”
As the company consults with officials at the DEP, the Maine Public Utilities Commission has its own work to do. In the year 2000, the state adopted a law requiring that utilities either generate or transmit power, but not do both. In its ruling, the Supreme Judicial Court argued that the PUC’s decision to approve the the First Wind-Emera partnership was at odds with that law.
Tom Welch is chairman of the PUC. “The court did not say that there’s no possibility this transaction can continue. What the court said was that the commission had used the wrong standard when it previously looked at the question,” Welch says. “So now, we have to determine whether, under the standard as it’s now been articulated by the court, the transaction can still go forward.”
Welch says the PUC hopes to issue a new decision on the First Wind-Emera venture in the coming weeks.
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