Maine’s largest-ever procurement of renewable-power contracts was hailed in September as a historic step on a path to reaching ambitious climate change goals. But today, those contracts are under fire from two dissatisfied developers.
The developers question whether the selection process was flawed, whether customers will get the lowest possible rates and whether some of the winning projects could be delayed or never built.
Boston-based Longroad Energy is asking the Maine Public Utilities Commission, which granted the awards after an eight-month evaluation process, to confirm that the selected projects have the wherewithal to proceed, and to require winners to set aside funds, presumably to be paid to the state, if they fail to achieve commercial operation. It’s also questioning the award of a long-term contract to the Three Rivers Solar project in Hancock County, which Longroad says already has an existing contract.
“The omission of any assessment of project viability casts in doubt whether Maine ratepayers and the state’s economy will actually realize the benefits promised by at least some of the winning bidders and touted as part of the announcement of the winners, as the benefits will only be realized if the projects are actually completed, and completed on time,” Longroad said in its request.
Longroad is a major renewable-energy developer that, through former companies, developed most of Maine’s large-scale wind power projects. It had hoped to win a first-round contract for a $190 million solar project in the Benton area called Three Corners Solar.
The second developer, Clearway Renew LLC, is challenging how the PUC scored the projects. It maintains that its entry, called County Wind, had a superior price and climate impact and should have won a contract. Clearway also has filed a broad Freedom of Access Act request in an effort to see confidential pricing information and learn how projects were scored, among other things.
Clearway wants to build what would be New England’s largest wind project, which would have a value of roughly $1 billion. Rated at 400 megawatts of capacity, it would be located on commercial forestland around Sherman, in southern Aroostook County.
Three Rivers said it disagreed with the arguments made by Longroad and Clearway, and it encouraged the commission to finalize the contracts and help the state meet its renewable energy goals.
The PUC is set to take up the matter Tuesday.
The request for reconsideration, as it is called, has gained the support of the state Office of Public Advocate, which represents consumers in utility matters.
In written comments, the public advocate’s office said it supports the PUC’s effort to get the best price through a competitive bid process. In fact, the average contract rate for the winning bidders was 3.5 cents per kilowatt-hour, near the historic market price for energy in New England and on par with natural gas-fired plants.
“However, in evaluating projects for the potential award of a long-term contract, it is necessary to consider both the cost and benefits of such contracts and the viability of the projects for which the contracts are being offered,” the office said. “Essentially, it appears that the commission may have used a process for selecting winning bids that failed to adequately consider viability.”
An influential trade group that represents paper mills and other large power users also is supporting the Longroad and Clearway requests.
Bob Dorko, president of the Industrial Energy Consumer Group, said he was surprised to see allegations that one of the projects was selected even though it hadn’t secured a commitment allowing it to connect to New England’s electric grid.
“Successful interconnection can take over four years, and the attrition rate of queued projects is a staggering 70 percent,” Dorko wrote, “in part because the amount of upgrade costs imposed on developers is seemingly unknowable until it is too late.”
The dispute has caused a rift in Maine’s growing clean-energy industry, which has this year announced a string of multimillion-dollar projects to help meet Maine’s aggressive goal of reducing emissions linked to climate change by 80 percent by 2050. The Maine Renewable Energy Association, which counts some of the bidders as members, declined to comment on the matter before the PUC.
But several companies have weighed in on the issue in public comments filed with the PUC.
A solar developer that was selected to build two projects, BNRG Maine/Dirigo Solar, said that while the details of the Longroad and Clearway bids are confidential, they apparently weren’t competitive. BNRG/Dirigo is an Ireland-Maine partnership that’s investing more than $290 million in Maine solar projects.
“Unable to deliver a price to Maine ratepayers that is superior to the winning bids, they seek to rewrite the terms of the RFP by asking the commission to impose new and different security requirements,” BNRG commented.
The clean-energy contract awards stem from a law enacted last year in the Legislature and supported by Gov. Janet Mills. It increased the amount of renewable power utilities must buy for their customers from 40 percent today to 80 percent in 2030, with a goal of 100 percent in 2050.
In September, Mills hailed the contracts as making Maine a national clean-energy leader.
“Today’s announcement is a historic step forward in Maine’s effort to embrace renewable energy, create good paying green-collar jobs, diversify and expand our economy, and combat the threat of climate change,” she said at the time.
Taken together, the winning projects are estimated to spur $145 million in spending and create 450 jobs during construction.
More than 70 renewable-energy developers from across the country presented proposals to the PUC, which drew up a short list. In the end, 17 projects were selected, most of them solar. Wind, biomass and hydroelectric bidders each won one project.
A second round of bids is expected to be submitted for additional contracts in January.
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