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

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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

A LOOK AT VERMONT

What Mainers really want is contained in Bill 116. This Quebec law establishes a "heritage electricity pool" for residents and fixes the average rate at 2.79 cents per kilowatt-hour for energy. That's less than half of what Maine homeowners now pay. Contracts for export, the bill says, must be submitted to the government "and are subject to such conditions as the government may then determine."

A good place to see how these conditions are applied is Vermont, the only state in New England where utilities still directly buy power. Hydro-Quebec supplies a third of Vermont's needs, and recently signed a 26-year contract that replaces one that was due to expire.

The starting price of the contract last fall was roughly 6 cents/kwh, roughly twice the wholesale market price in Maine. The Vermont contract rate changes each year through a confidential formula that contains a "buffering feature," to limit big swings due to volatile market conditions. The idea is to offer a stable supply of competitively priced power that's certified as being renewable in Vermont.

These features are especially important in Vermont. The state is fighting in court to shut the Vermont Yankee nuclear plant, a source of another third of its power.

Vermont's longstanding ties to Hydro-Quebec also are based on location. Burlington and Montreal are less than 100 miles away. The state has high-voltage interconnections on the border with Quebec.

By contrast, Maine's interconnections with Canada are in northern and eastern Maine, with New Brunswick. From time to time, Hydro-Quebec does wheel power across its sister province through Maine to the Boston area.

"When the price makes sense, we sell," Connor said.

LESSON FROM HISTORY

On paper, it might make sense to build a new line from Quebec across western Maine to connect with the New England grid. In practice, that approach would face tough obstacles.

History provides one lesson.

In 1987, Central Maine Power Co. reached an agreement with Hydro-Quebec to build a 140-mile line running from the border near Andover to Pownal. The $4 billion contract, for 300 megawatts, would have lasted until 2016.

But property owners and environmental groups fought the plan, and the Maine Public Utilities Commission killed it two years later. In a 2-to-1 ruling, regulators said CMP needed to look first at energy efficiency and buying power from small, instate producers.

As it turned out, falling oil prices made those small hydro, waste-to-energy and biomass contracts very expensive, and inflated Maine's electric rates for years to come. But the decision highlighted a policy that favors instate, renewable power production, a preference that continues to have wide support in Maine.

Events playing out now in New Hampshire hold another lesson.

For two years, Hydro-Quebec and two U.S. partners, Northeast Utilities and NSTAR, have been trying to build a 180-mile line through New Hampshire. The line would bring up to 1,200 megawatts of power onto the regional grid.

But landowners and conservation groups that oppose the $1 billion project's route through the White Mountain National Forest have wrestled the plan to a standstill. Last month, project developers announced they had come up with a new route, but it's unclear if that will break the logjam.

A COMPLICATED CALCULUS

In Maine, Hydro-Quebec would face a different process today.

The Legislature has created a review panel to consider transmission projects in three state-designated energy corridors. It's now looking at a Canadian proposal to lay underground power lines along interstate highways and the Maine Turnpike, from Orrington to Tewksbury, Mass. Power would be generated in northern Maine and the Canadian Maritimes.

One requirement is that new lines don't harm transmission opportunities for energy generators in Maine. It's a rule that again shows the influence of Maine's alternative power generators, now dominated by the wind power industry and papermakers that operate biomass plants.

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