June 8, 2011

Companies anxious over LePage stand on offshore wind

As a key conference nears, offshore energy backers counter a news story reporting weakness in Maine's commitment.

By Tux Turkel tturkel@pressherald.com
Staff Writer

Paul Williamson was in California last month at Windpower 2011, the industry's largest event in the world. Williamson, director of the Maine Wind Industry Initiative, met with global companies that could spend billions of dollars to develop floating wind farms off Maine's coast.

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The windmills of the Thanet Offshore Wind Farm stand off Ramsgate, England. A story headlined “LePage administration questions feasibility of offshore wind power” appeared in the Bangor Daily News last week, two weeks before a major industry conference in Portland.

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COMING TO PORTLAND
For more information on EnergyOcean International’s conference, June 14-16 at Holiday Inn by the Bay, go to energyocean.com

Some of the companies were privately voicing anxiety about Gov. Paul LePage's position on ocean energy, Williamson said, and whether Maine continues to be a good place to invest.

Their concerns were heightened last week by a prominent story in the Bangor Daily News headlined "LePage administration questions feasibility of offshore wind power."

By chance, the article appeared two weeks before a major conference for the offshore renewable energy industry, EnergyOcean International, to be held in Portland from June 14 to 16.

With global energy companies poised to arrive, comments made in the story have Maine's nascent offshore wind industry scrambling to contain the public relations damage. Officials at the University of Maine, where much of the state's offshore wind research is based, are distancing the school from the story.

"It's unfortunate timing," Williamson said. "We'd prefer that before an international audience comes to Maine, we maintain our message about bringing investment here."

Since he took office in January, LePage has made it clear that he's concerned about Maine's higher-than-average electricity rates and opposed to policies that add costs. That view was expressed in the article by two people identified as advisers to LePage with knowledge of the energy industry.

One of them is Ken Fletcher, who heads the governor's energy office. Fletcher estimated that offshore wind power would cost 27 cents per kilowatt-hour, more than a dime above current rates.

The estimate, however, is a projection based on the high cost of developing a small pilot project, not for commercial wind farms. A study released by UMaine earlier this year said it will be possible to generate grid-scale offshore wind power for 8 to 10 cents per kwh in 2020.

The other person identified as a LePage adviser in the story is James LaBrecque, owner of Flexware Control Technology in Bangor. He is quoted as saying that offshore wind power isn't viable because of high costs and "dismal" performance.

LaBrecque is a mechanical engineering adviser at UMaine. He's quoted as saying that offshore wind is "a bit of a sacred cow on campus and throughout the state," and that the school's engineering department is aware of problems with the overall plan but fearful of discussing them.

That prompted Dana Humphrey, UMaine's dean of engineering, and the chairs of four engineering departments at the university to send a letter to the newspaper Friday.

The letter disputes the contention that the faculty uniformly opposes offshore wind power, as the story implied. It says the school's engineers are working to develop a range of alternative energy technologies.

Fletcher is seeking to clarify one facet of the story, which was written primarily by Jamison Cocklin, a UMaine student who has been reporting for the Bangor Daily News.

LaBrecque is not an adviser to the governor, Fletcher said. LaBrecque has spoken to Fletcher and to LePage about energy issues, but he has no official status in the administration.

Fletcher said he wasn't even aware that LaBrecque had been interviewed for the story until he read it.

But the story has made an impression in the wind energy world. One executive said it reinforces a sense that Maine is less receptive to renewable power than it was under Gov. John Baldacci, who made both land and offshore wind power a cornerstone of his energy policy.

"I think it's fair to say that the momentum created by the Baldacci administration seems to be in jeopardy, based on the posture of the new administration," said Ray Dackerman, the U.S. director for London-based Condor Wind Energy.

Condor is developing a two-blade turbine that's meant to be less costly and more robust in high-wind locations. It plans a pilot project in Italy in 2013, and has applied for a permit in Massachusetts.

Maine has an attractive wind resource and a skilled manufacturing sector, Dackerman said, and is being considered for future projects.

"But we cannot ignore that the new administration isn't embracing the offshore wind industry," he said. "We need to go to the path of least resistance."

Such a reaction is disturbing to Williamson, who represents Maine companies that are trying to partner with international energy firms such as Condor to develop a multibillion-dollar supply and generation industry in Maine. Williamson said he has been stressing that LePage is strongly pro-business and wants to reduce costs for companies that operate here.

Fletcher said the intent of his comments was to tamp down any expectations that LePage would support energy policies that add to ratepayers' costs.

The Maine Public Utilities Commission is evaluating bids from companies that are interested in developing a small pilot project with floating turbines. It's part of a sweeping ocean energy law passed by the last Legislature.

The law limits how much electricity rates could increase on long-term contracts from the pilot project: 14 cents per kwh above the market price for 25 megawatts.

But LePage would rather have the state treat wind power as it does other economic development opportunities, Fletcher said, and support them through the General Fund, or perhaps tax credits and bond issues. Maine voters approved an $11 million bond for technology research in June 2010.

"Source it directly, rather than put it in electric rates," Fletcher said.

The EnergyOcean International conference and exhibition brings together top players in tidal, wave and wind power research and development. The three-day event came to Maine in 2009 and included a welcoming speech by Baldacci. Its return two years later reflects the state's strong potential for ocean energy.

LePage isn't scheduled to attend, but Fletcher will participate in a panel discussion on Maine's energy policies that will include Williamson, officials from Cianbro Corp. and Bath Iron Works, and Habib Dagher, the UMaine professor who is leading the state's offshore wind efforts.

Fletcher said he plans to use the opportunity to reassure the industry that while LePage has questions and concerns about offshore wind power, the governor welcomes its economic potential.

Dagher said he plans to follow up with Fletcher over the next few weeks and explain the details of how researchers have arrived at their cost projections.

"In the end of the day, our goal is to get the cost of electricity down," Dagher said. "We want the same thing."

In the meantime, Williamson is walking a diplomatic tightrope, trying to calm the industry's jitters while maintaining good relations with the new administration.

"Our goal is to work with the governor to refine his message," Williamson said. "We want to simply maintain the communication that the state of Maine is open for business investment."

 

Staff Writer Tux Turkel can be contacted at 791-6462 or at: tturkel@pressherald.com

 

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