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Former official not optimistic on proposed electricity alliance

Among the options under consideration to keep a lid on the runaway cost of electricity in Maine is a cross-border alliance with New Brunswick and other provinces of Atlantic Canada, where affordable and renewable energy is abundant. One vocal critic of the status quo says that approach won't be enough to undo the damage done by "restructuring" through deregulation. ...While Canada may be a source of renewable energy that would reduce reliance on fossil fuels, Lee said affordability could remain an issue. "The fact is that many renewables require massive subsidies to entice investment," he said. "These subsidies ultimately must be paid either in electric rates or in taxes. Large investments in transmission are needed, and these costs must also be paid.

Among the options under consideration to keep a lid on the runaway cost of electricity in Maine is a cross-border alliance with New Brunswick and other provinces of Atlantic Canada, where affordable and renewable energy is abundant.

One vocal critic of the status quo says that approach won't be enough to undo the damage done by "restructuring" through deregulation.

Since 1990, restructuring requirements have not allowed Maine utilities to generate the electricity they deliver to the homes and businesses of their customers. Instead, they are required to buy electricity from independent generators that sell energy at prices determined by auction.

"My view is that any new alliance with Canada by itself will not solve the problem we have, which is deregulation is not working," said Carroll Lee of Brewer, who spent the last five of his 32 years with Bangor Hydro-Electric Co. as the utility's president and chief operating officer.

"We should acknowledge the problem, either by fixing the serious flaws in deregulation, which would take a long time and a lot of political courage, or returning to the regulation of generation, which did work quite well."

Lee... more [truncated due to possible copyright]  

Among the options under consideration to keep a lid on the runaway cost of electricity in Maine is a cross-border alliance with New Brunswick and other provinces of Atlantic Canada, where affordable and renewable energy is abundant.

One vocal critic of the status quo says that approach won't be enough to undo the damage done by "restructuring" through deregulation.

Since 1990, restructuring requirements have not allowed Maine utilities to generate the electricity they deliver to the homes and businesses of their customers. Instead, they are required to buy electricity from independent generators that sell energy at prices determined by auction.

"My view is that any new alliance with Canada by itself will not solve the problem we have, which is deregulation is not working," said Carroll Lee of Brewer, who spent the last five of his 32 years with Bangor Hydro-Electric Co. as the utility's president and chief operating officer.

"We should acknowledge the problem, either by fixing the serious flaws in deregulation, which would take a long time and a lot of political courage, or returning to the regulation of generation, which did work quite well."

Lee said he finds it "refreshing" that a new Maine Public Utilities Commission draft analysis of how the existing the state, regional and federal regulatory structures sees deregulation as contributing to the price of electricity in Maine increasing by 20 percent more than the rest of the nation since 1990.

"They also acknowledge that we got into this problem because Maine has followed a series of policies promoting non-utility, renewable generation as an alternate to utility generation, which increased rates dramatically relative to the U.S.," Lee said. "Then [Maine] tried to fix that by implementing restructuring, which forced utilities to divest generation, hoping that competitive generation would evolve. ... We have arrived at a very poor state, in terms of high prices and risks."

The root of the problem, Lee contends, is that free-market competition by a robust wholesale energy market never evolved, as the architects of deregulation had predicted. Another key factor, he said, is the current reliance on natural gas to fuel turbines. At the time of deregulation, the fuel mix used by Maine's electrical utilities included no natural gas dependence.

While Canada may be a source of renewable energy that would reduce reliance on fossil fuels, Lee said affordability could remain an issue.

"The fact is that many renewables require massive subsidies to entice investment," he said. "These subsidies ultimately must be paid either in electric rates or in taxes. Large investments in transmission are needed, and these costs must also be paid.

"If low costs and carbon reduction is the goal, why don't they consider nuclear or hydro and clean coal technology, including carbon sequestration, combined with high-efficiency electro-technology - heat pumps, for example."

 


Source: http://ellsworthmaine.com/s...

DEC 6 2007
https://www.windaction.org/posts/12251-former-official-not-optimistic-on-proposed-electricity-alliance
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