Two international energy companies are proposing a $2 billion project that would carry vast amounts of renewable power from northern and eastern Maine and the Canadian Maritimes to Massachusetts through underground wires along interstate highways.

The Northeast Energy Link would primarily serve wind farms to be built in Maine, as well as hydro, wind and other generation sources in Atlantic Canada.

Promoters say the project could lower energy costs by $714 million for Maine customers over 30 years, and generate revenue in the form of lease payments and local taxes.

Nova Scotia-based Emera Inc. and its Maine subsidiary, Bangor Hydro-Electric Co., are teaming up with the American arm of British electricity giant National Grid to develop the project.

The line will have a capacity of 1,100 megawatts, equal to the output of a large nuclear or gas-fired power plant. It would transmit energy from wind farms in Maine to be built by First Wind Holdings. Last summer, Boston-based First Wind and Emera closed a $361 million deal to jointly own and operate wind projects in the Northeast.

The 227-mile line would consist of two parallel, direct-current cables, each five inches in diameter. The proposed route would run generally within the Interstate 95, 295 and 495 corridors from Orrington to Tewksbury, Mass. In Maine, the cables would be buried along the inside edge of Interstate 95 and 295 from Bangor to the New Hampshire border, a distance of 176 miles. The detailed alignment of the transmission line would be made through collaboration with the Maine Department of Transportation, the Maine Turnpike Authority and other agencies.

The Northeast Energy Link has been in the planning stage for five years. But earlier this month, the parties filed a formal letter of intent with Maine’s Interagency Review Panel, a new group formed to oversee proposed transmission projects in three, state-designated energy corridors.

In the letter of intent, Emera and National Grid say that they have the resources and financing capacity to fully support and operate the project from start to finish.

Ken Fletcher, director of Gov. LePage’s energy office and a member of the project review panel, said the proposal is appealing in part because it’s a “merchant line,” meaning it’s privately financed and doesn’t put electricity ratepayers at risk.

This letter is the start of a long and uncertain process. The venture is bound to face opposition from wind power foes, for instance. If approved by various federal agencies, regulators in Maine, New Hampshire and Massachusetts, and by New England’s power grid operator, the transmission line would go into service in 2018.

For now, it’s not clear exactly where the turbines that will supply all the energy would be built.

“We have a number of projects that we’re looking at,” John Lamontagne, a spokesman for First Wind told the Portland Press Herald. He said it was too soon to discuss details.

Earlier this year, First Wind won approval from state regulators for a 150-megawatt project in the Aroostook County town of Oakfield. The wind farm will have 50 turbines. But to develop a generating capacity of up to 1,100 megawatts, First Wind would need to develop several more large projects.

The line is being proposed to satisfy the need for renewable energy in New England, primarily in Connecticut and Massachusetts. Those states have aggressive laws to reduce their shares of electricity generated from oil, coal and natural gas, and increase capacity from wind, hydro, tidal and other regional sources, through policies known as renewable portfolio standards.

“The supply of renewables in New England has not kept up with the growing demand for these standards,” Gerry Chasse, Bangor Hydro’s president, told the newspaper.

Maine also has a strong renewable portfolio standard law, but it has become a political issue and a point of criticism for Gov. Paul LePage. The governor is using a recent report from a conservative advocacy group to assail the above-average power contracts paid for renewables, saying they will cost 1,000 jobs and add $145 million to electric rates by 2017. His attacks foreshadow a likely battle next year between interest groups that want to expand Maine’s law, and those that want to gut it.

LePage’s opposition won’t hamper the Northeast Energy Link, Chasse said, because the line isn’t being developed to serve Maine. The biggest obstacle facing the project would be any retreat from current policies by politicians in southern New England. Electricity from natural gas is cheap today, Chasse said, but the project is promising the region the long-term economic benefit of stable electricity prices.

“Will the New England states continue to have the will to push for renewables?” Chasse asked.

Chasse also noted that any new transmission line in Maine must be shown to benefit the state, a determination that will be made by the review panel.

Under state law, the panel must approve a project if it enhances energy transmission within Maine and is likely to reduce the cost of power for homes and businesses.

In their letter to the panel, the utility groups say the project will ease bottlenecks in existing transmission lines, lower energy costs by $714 million for Maine customers over 30 years, and generate revenue in the form of lease payments and local taxes.

The project is also expected to create 450 construction jobs and another 50 related jobs during peak construction, as well as 40 to 50 high-skilled, permanent jobs to operate two converter stations and maintain the transmission lines.

By law, 90 percent of the revenue for use of the corridor will go to the Maine DOT for capital improvements for state highways. The remaining 10 percent of the revenue will be deposited in an energy infrastructure benefits fund and transferred to the Efficiency Maine Trust for grants, loans, programs, and incentives for efficiency initiatives and alternative energy resources.

The issue of long-term costs will be important if the project is to win support from the Industrial Energy Consumer Group, an influential lobby that represents some of Maine’s factories and mills.

The turnpike/interstate corridor is an invaluable and irreplaceable energy corridor, noted Tony Buxton, the group’s attorney. Canada has more than 20,000 megawatts of hydro planned and 5,000 to 8,000 megawatts under construction in its eastern provinces, he said, virtually all for export to the eastern United States.

“(This project) is only the first such opportunity,” Buxton said, “and that fact should cause Maine to maximize the value of our assets, just as Canada has in the past. Any benefits we can obtain should be used to reduce Maine’s energy costs.”

 

Tux Turkel can be contacted at 791-6462 or at:

tturkel@pressherald.com