April 28, 2016
Maine

Cianbro says CMP fees threaten solar, offshore wind projects

By Darren Fishell, BDN Staff | Bangor Daily News | April 27, 2016 | bangordailynews.com

PORTLAND, Maine – Cianbro Development Corp. has told state regulators that a $26 million Pittsfield solar project and the offshore wind farm it is developing with the University of Maine are at “serious financial risk” because of charges Central Maine Power Co. proposed to connect the projects to the grid.

Cianbro and biomass plant developer Georges River Energy LLC want the Maine Public Utilities Commission to step in and decide how CMP should bill the power generators.

Georges River on April 13 asked the PUC to step in and resolve a dispute over whether CMP can charge it an “operations and maintenance” fee for generation units deemed “special facilities.”

The dispute arises from a discrepancy in CMP’s terms and conditions for small power generators and PUC interconnection rules.

Peter Vigue, Cianbro’s president and CEO, said Wednesday that the company is not at odds with the utility but is “asking for a correct assessment of the situation” and of which rules apply.

Gail Rice, spokeswoman for CMP, said the utility agrees regulators should step in to determine how costs for connecting those projects to the grid should be allocated.

“We agree that the PUC is the appropriate party to clarify exactly how this should be done,” Rice said.

She said that upon reviewing the projects, the utility’s staff found the fee structures for “special facilities” were the closest fit.

“These costs will need to be paid by somebody, and it will either be the developer or it will be the entire customer base,” Rice said. “We feel that the entities that cause the cost to occur should be the ones who pay [those costs].”

Rice said CMP and its parent company, Avangrid, support development of community-based renewable energy projects and noted a decision on the fees has implications for other projects, such as UMaine’s offshore wind proposal.

The projects from Cianbro and Georges River were the two largest approved by the PUC for 20-year power contracts, under a pilot program for small renewable energy projects with in-state ownership.

Georges River Energy LLC, held by members of the family that owns Robbins Lumber in Searsmont, plans to build a 7.5 megawatt biomass generator that would use wood waste from the lumber yard.

The company told regulators that fee would amount to an annual payment of $343,680 for 49 years, or more than $16.8 million over the lifetime of the project.

PUC staff described the disputed fee as an impasse in negotiations between the utility and Georges River in an April 19 notice and request for comments.

“[Georges River] informs the Commission that discussions around the Interconnection Study for the project have progressed well but are now stalled while [Georges River] and CMP seek the direction of the Commission as to the [operations and maintenance] charges,” the filing states.

Cianbro on Monday expressed support for PUC intervention to settle the dispute. It has a 70 percent stake in a 9.9 megawatt project originally planned for the town of Monroe but now proposed for a parcel in Pittsfield. Solar developer Clear Energy LLC holds the other 30 percent of that project.

The UMaine-led offshore wind project, called Maine Aqua Ventus, is still developing a project to demonstrate that its design for floating wind turbines can work and it is in the running for federal money to build such a project.

In a letter to regulators Monday, Cianbro Vice President Ernest Kilbride wrote about the solar project that “[i]t is pretty clear that a project of this type cannot absorb this type of annual expense and still move forward.”

“If the [operations and maintenance] charges are assessed as currently represented by CMP, both the Pittsfield Solar Project and the [Maine Aqua Ventus] project are at serious financial risk and would be in danger of not moving forward,” Kilbride wrote.

For the solar project, Kilbride wrote the CMP fee would amount to an annual fee of about $1 million, against an estimated $4 million upgrade to connect the project, which would be paid by the developers.

“In summary, it is difficult to believe that the PUC intended that the $26 million Pittsfield solar project incur an annual fee from CMP of $1 million (for a $4 million upgrade) over a period of 40 years (or longer), particularly when the developer pays for all the system upgrade costs,” Kilbride wrote.

The solar project won its 20-year contract with a proposed price of less than 8.5 cents per kilowatt-hour and the Georges River biomass plant with a price of 9.9 cents per kilowatt-hour.

The PUC also approved a combined solar and hydropower system near the American Woolen Mill in Dover-Foxcroft, with a combined capacity of 396 kilowatts, the smallest of the group, at 10 cents per kilowatt hour, and a wind project in Limestone at 8.3 cents per kilowatt-hour.