January 20, 2013

Maine still pursuing Canadian electricity

The LePage administration wants Hydro-Quebec to sell power here, possibly at the expense of wind and biomass generators.

By Tux Turkel tturkel@pressherald.com
Staff Writer

More than 30 years ago, Gordon Weil and then-Gov. Joseph Brennan traveled to Montreal to meet with Quebec Premier Rene Levesque. They met at the headquarters of the provincial power company, Hydro-Quebec.

click image to enlarge

Aerial views show the powerhouses from Hydro-Quebec’s Eastmain-1-A and Eastmain-1 hydroelectric stations near James Bay.

Courtesy Hydro-Quebec

Weil, then Maine's energy office director, recalls a sense of optimism about tapping into cheap energy from a province flexing its economic and political muscle. Hydro-Quebec was hard at work on the La Grande complex at James Bay, then the world's largest hydroelectric system, and was looking for export opportunities. At home, rates were so low that the majority of Quebeckers were heating with electricity.

"Those discussions went nowhere," Weil said last week. "We talked, but nothing ever got firmed up."

Last June, a delegation of Maine lawmakers on the Maine-Canadian Legislative Advisory Commission drove to Quebec City to meet with provincial officials. They knew that three-quarters of Quebec homes still have electric heat. They knew that Hydro-Quebec is working on new, multibillion-dollar dam projects, and is having problems siting a transmission line to ship power through New Hampshire.

"From our perspective, there may be a way to capitalize on Maine's location," state Rep. Kenneth Fredette, R-Newport, the new House minority leader, said last week. "Is there a possible partnership to get power to southern New England that can benefit Maine people?"

Three decades later, Mainers are still making the northern pilgrimage for power. A shared border, and in some cases, a shared language and culture, seem to entice a succession of leaders into believing that this affinity will somehow translate into discount electricity for Maine.

So far, it has not. But why?

It's a timely question. The administration of Gov. Paul LePage is expected to reintroduce a controversial bill this winter meant to encourage Hydro-Quebec to sell power here, possibly at the expense of local wind and biomass generators.

The answer has three parts:

Hydro-Quebec's sole shareholder is the provincial government. It's required by law to sell electricity at a deep discount at home.

That discount doesn't extend to exports. Hydro-Quebec's export rates are on par with wholesale market prices, which in New England are pegged to natural gas.

No transmission lines link Maine and Quebec. Getting power from Quebec to Maine involves a detour through New Brunswick, which adds costs, or building a new line through western Maine, which would face steep hurdles.

"It's just a mistake to believe that it's possible to buy cheaper power from Hydro-Quebec," said Weil, who now works as a consultant to power companies in the Canadian Maritimes.

But it's easy to understand why the lure of cheap Canadian power is so tantalizing, especically to a state where high energy costs are a drag on the economy and a perennial source of political friction.

Hydro-Quebec owns 60 generating stations and 26 large reservoirs, as well as 579 dams and 97 control structures. These projects have a total installed capacity of more than 36,000 megawatts, as much as all of New England can generate.

Hydro-Quebec also offers a clean, renewable supply. Water is used to make more than 98 percent of its electricity.

"Hydro-Quebec has a long history of supporting the region's renewable energy needs," said Ariane Connor, a spokeswoman for the utility. "We do believe our energy has some very important advantages, including low levels of greenhouse gases and reliability."

Those benefits, Connor said, add value to Hydro-Quebec's export sales, which are concentrated in Ontario, New York and Vermont. Export rates, she said, reflect prices on the wholesale market. Asked if there's any reason Maine ratepayers could expect discounts below the market price, Connor said: "I have not heard that we have made any such representations. We're saying we're an economical, reliable and renewable source of energy."

(Continued on page 2)

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