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Regional power plan fairness questioned

Maine's largest energy provider is forecasting record-breaking electricity use this summer, as well as a need for additional supply lines to feed an ever-increasing demand. But a solution planned by ISO New England -- which manages electricity distribution in Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont -- is being met with skepticism by Maine officials, who question the proposal's need and fairness.

Under the current plan, which goes before the Federal Energy Regulatory Commission next month, ISO New England projects energy use of the region for three years, beginning in 2007.

The distributor would then hold a contract auction for existing and prospective power plant generators.

Although the plants would not get paid until 2010, ISO New England proposes billions of dollars in electricity rate increases to encourage generators to invest in new power plants. Maine users would see bills jump by 5 to 10 percent.

But Maine utility officials say the state's consumers will end up contributing $300 million to $350 million to help build infrastructure for looming shortfalls in southwest Connecticut, Boston and other out-of-state dependents.

"Our interests are not always reflected in the New England power pool," said Kurt Adams, chairman of the Maine Public Utilities Commission.

Maine generates about 50 percent more electricity than it uses. But, according to ISO New England President and CEO Gordon van Welie, peak demand in Maine is growing faster than New England as a whole.

"The problem is, the surplus in Maine is going to be short-lived," van Welie said. "We're getting tighter and tighter with supply... more [truncated due to possible copyright]  

Under the current plan, which goes before the Federal Energy Regulatory Commission next month, ISO New England projects energy use of the region for three years, beginning in 2007.
 
The distributor would then hold a contract auction for existing and prospective power plant generators.
 
Although the plants would not get paid until 2010, ISO New England proposes billions of dollars in electricity rate increases to encourage generators to invest in new power plants. Maine users would see bills jump by 5 to 10 percent.
 
But Maine utility officials say the state's consumers will end up contributing $300 million to $350 million to help build infrastructure for looming shortfalls in southwest Connecticut, Boston and other out-of-state dependents.
 
"Our interests are not always reflected in the New England power pool," said Kurt Adams, chairman of the Maine Public Utilities Commission.
 
Maine generates about 50 percent more electricity than it uses. But, according to ISO New England President and CEO Gordon van Welie, peak demand in Maine is growing faster than New England as a whole.
 
"The problem is, the surplus in Maine is going to be short-lived," van Welie said. "We're getting tighter and tighter with supply because the surplus is evaporating."
 
Currently, Maine uses about 2,000 megawatts of electricity a year, van Welie said. But each year, demand on the New England power grid increases by about 500 to 600 megawatts.
 
Maine's surplus is due in large part to plants powered by natural gas, van Welie said. But with rising fuel costs and little diversity in alternative energy sources -- coal, wind, hydro and nuclear, for example -- the state will find itself in a tight spot.
 
"We're very exposed to the global energy markets," van Welie said. "We've kind of created, through our choices, a situation where we're boxed in."
 
But the idea of Maine residents throwing money toward power plant development, especially in out-of-state areas, does not sit well with some Maine lawmakers.
 
"I was concerned about the way Maine was treated in this," said Rep. John Brautigam, D-Falmouth. "It absolutely deserves scrutiny."
 
Brautigam, who sits on the state's Utilities and Energy Commission, proposed a bill that would allow the Maine Public Utilities Commission to investigate alternative partnerships. Signed last month by Gov. John E. Baldacci, it basically gives the state permission to look outside of ISO New England.
 
But that may be more difficult than it seems.
 
"Every state in the country is tied to the grid," said Rep. Larry Bliss, D-South Portland, co-chairman of the Legislature's Utilities and Energy Committee.
 
Bangor Hydro and Central Maine Power Co. are currently fed by ISO New England. But, said Maine Public Advocate Stephen Ward, "if you look north, you look to a cheaper alternative."
 
Ward is referring to the Northern Maine Independent System Administrator, a power generator and distributor responsible for electric power markets in Aroostook and Washington counties.
 
Currently, the Northern Maine ISA generates about 130 megawatts of power. But if that system could extend into power production plants in central and southern Maine, as well as connect into the Canadian Maritimes, the state may find the increased energy independence it desires.
 
"The cost and benefits of the different services are very difficult to determine at this time," said Adams.
 
For now, Maine will have to wait and see if the Federal Energy Regulatory Commission decides in favor of the ISO New England plan.
 
"Part of the problem is federal law trumps state law," said Bliss, who does not rule out court action if the decision does not favor Maine. "That is possible," he said, "and probable."
 
Glen Bolduc -- 623-3811, Ext. 431
 
gbolduc@centralmaine.com


Source: http://kennebecjournal.mai...

MAY 19 2006
https://www.windaction.org/posts/2694-regional-power-plan-fairness-questioned
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