Article

Settlement talks on CMP project questioned

At a confidential meeting today, parties including the staff of the Maine Public Utilities Commission and Central Maine Power Co. will seek ways to settle CMP's landmark request for a $1.4 billion upgrade of its transmission system. But two prominent parties in the case say the settlement attempt - initiated at CMP's urging - reflects political pressure by the utility's parent company and threatens to short-circuit a legal process that's meant to test whether the project is necessary in its proposed form.

Some parties see political pressure that could subvert the proper legal process.

At a confidential meeting today, parties including the staff of the Maine Public Utilities Commission and Central Maine Power Co. will seek ways to settle CMP's landmark request for a $1.4 billion upgrade of its transmission system.

But two prominent parties in the case say the settlement attempt - initiated at CMP's urging - reflects political pressure by the utility's parent company and threatens to short-circuit a legal process that's meant to test whether the project is necessary in its proposed form.

They also say that Gov. John Baldacci's wind power trade mission to Europe last week, and statements the governor made during the trip, send a message that Maine's energy future depends heavily on the approval of the transmission line, which would directly benefit Iberdrola, the Spanish owner of CMP's parent company, Energy East.

"My concern is that the vast amount of money at stake has resulted in Iberdrola and Energy East putting a great deal of pressure on the governor and his energy staff," said Anthony Buxton, a lawyer representing paper mills and other businesses. "I'm concerned the PUC staff is... more [truncated due to possible copyright]  

Some parties see political pressure that could subvert the proper legal process.

At a confidential meeting today, parties including the staff of the Maine Public Utilities Commission and Central Maine Power Co. will seek ways to settle CMP's landmark request for a $1.4 billion upgrade of its transmission system.

But two prominent parties in the case say the settlement attempt - initiated at CMP's urging - reflects political pressure by the utility's parent company and threatens to short-circuit a legal process that's meant to test whether the project is necessary in its proposed form.

They also say that Gov. John Baldacci's wind power trade mission to Europe last week, and statements the governor made during the trip, send a message that Maine's energy future depends heavily on the approval of the transmission line, which would directly benefit Iberdrola, the Spanish owner of CMP's parent company, Energy East.

"My concern is that the vast amount of money at stake has resulted in Iberdrola and Energy East putting a great deal of pressure on the governor and his energy staff," said Anthony Buxton, a lawyer representing paper mills and other businesses. "I'm concerned the PUC staff is trying to drive a settlement with CMP, without the opportunity of full hearings under oath."

Buxton, one of Maine's top energy lawyers, has decades of experience with regional utility matters. He represents the Industrial Energy Consumer Group in the CMP case.

Another party in the case, Richard Silkman, says that CMP is pushing for a settlement in hopes of getting the transmission upgrade approved before the influence of Baldacci, a vocal supporter, wanes as he enters his last year in office.

"He's their biggest cheerleader," said Silkman, a former state planning director. "This is the horse they need to ride to get them across the finish line."

Silkman has been involved with energy matters for 25 years and is a partner in Competitive Energy Services in Portland. He developed a wind power project last year in Freedom. He is now proposing an unconventional, solar-power alternative to CMP's project, called Grid Solar, so he is a key adversary in the case.

The charges are noteworthy because of the amount of money hinging on the PUC's decision. The $1.4 billion cost of the transmission system upgrade would be shared by ratepayers across New England, with Maine residents paying 8.3 percent.

Approval would be a windfall for CMP and Energy East.

Transmission projects receive a rate of return set by the Federal Energy Regulatory Commission. CMP has annual net income of about $55 million. If the project wins approval, CMP's net income could increase by $100 million, based on a 12.89 percent rate of return on investment set by FERC.

Buxton and Silkman's charges were rebutted this week by CMP, Baldacci's office and the PUC.

They point out that settlement conferences, as they are known, are common in public utility cases. The private meetings let the PUC staff, lawyers from the Public Advocate's Office and formal intervenors seek common ground and compromise with a utility. The approach was used in the sale of Verizon's landline network to FairPoint Communications. Ultimately, any deal needs approval from the three commissioners.

CMP says it's interested in a settlement because the review process is months behind schedule. Transmission upgrades will be needed by 2012 to meet industry design standards for reliable service, said John Carroll, a CMP spokesman. Charges of political influence are distraction tactics used by opponents, he said.

"Anybody can make that accusation," he said, "but a settlement is a normal course for many large issues."

A spokesman for Baldacci rejected any claims of political influence.

"There's an independent process and the governor isn't interfering with that process," said David Farmer.

The governor wants to cut Maine's dependence on petroleum and sees great promise for economic development through renewable energy, Farmer said. He speaks out in support of CMP's project because of the potential for job creation, and because the state needs more transmission capacity to take full advantage of wind power.

But it's up to the PUC, Farmer said, to decide whether a particular project is needed, and in what form.

The PUC is an independent, quasi-judicial agency. The private settlement talks are happening parallel to the commission's process of collecting information and testimony for full public consideration, said Evelyn deFrees, a PUC spokeswoman.

"Outside politics, whatever they may be, aren't operating within the walls of the commission," she said.

Today's conference will be at least the third time the parties have met since the spring. The PUC staff is expected to outline its initial terms of a possible settlement. Silkman is expected to discuss his company's plan for a scattered network of solar-electric facilities for peak demand periods, typically in summer.

CMP's project, called the Maine Power Reliability Program, would create thousands of construction jobs and be among the largest energy projects in state history. But the scope of the project, essentially a new electricity superhighway between Orrington and the New Hampshire border, has made it controversial.

An unprecedented 155 intervenors, including landowners, business groups and power interests, have filed to participate with the PUC. The commission has scheduled formal hearings for February and is set to approve or deny the project in May.

In between, a second round of public hearings is likely to be held before winter, to let residents have their say - assuming a negotiated agreement isn't made before then.

Buxton and Silkman say pressure for settlement talks, and Baldacci's outspoken support for the line, mar the integrity of the PUC process.

For instance: The PUC has three commissioners, Sharon Reishus, the chair, Jack Cashman and Vendean Vafiades.

Baldacci nominated Reishus to the commission in 2003 and appointed her chair in 2008. Her term expired in March. Baldacci hasn't decided yet whether to renominate her. In an August interview with Capitol News Service, the governor said he wanted to "make sure her skill sets match up."

Silkman charged this week that Baldacci is sending a message to Reishus that she should approve the project, if she wants to keep her job. "The governor is holding her future in his hands," he said.

Farmer dismissed that contention this week. He said Baldacci will decide this winter, in time for the next legislative session, "whether she's the best person for the job."

Silkman has been critical of Cashman's participation in the European trade mission. In a recent radio interview with the Maine Public Broadcasting Network, he questioned whether it was appropriate for Cashman to tour facilities in Spain operated by Iberdrola, which owns CMP's parent company.

Farmer responded in the interview that no conflict existed. He said it made sense for the PUC to attend and answer questions about transmission and power generation issues. He repeated that view this week.

Against that backdrop, the PUC's handling of the contentious case will get extra scrutiny in the months ahead.

"Because there's so much money at stake," Buxton said," it's human nature to be cutting corners on what should be a deliberate process. And we could be making a big mistake."


Source: http://pressherald.mainetod...

SEP 30 2009
https://www.windaction.org/posts/22431-settlement-talks-on-cmp-project-questioned
back to top