Friday, March 7, 2014
Public Utilities Commission Chairman Thomas Welch listed Maine’s “daunting geologic, geographic and demographic challenges” when discussing the price of energy at a recent Portland Chamber of Commerce breakfast.
The University of Maine’s floating turbine off Castine could be the birth of a new industry that turns Maine’s energy production into an asset.
The Associated Press
Maine does not sit atop coal, gas or oil reserves, Welch noted. We don’t have huge dams built and run by the federal government. “We like to live a long way from each other,” he said, making the cost of infrastructure and transportation high. And, he concluded, “it can be very cold up here for a long time.”
The high cost of heat and electricity ships billions out of state every year and puts our industry at a disadvantage. Reducing the costs of heating, lighting and operating equipment should be a major goal of state policy and crucial to our economic future. But with that end in mind, the state should be willing to take on a small increase in electric rates if it would do something in the long run about our energy disadvantages. The Maine Aqua Ventus offshore wind project is such an opportunity.
The PUC is now considering a long-term power contract with the company, a consortium of the University of Maine, Cianbro Corp. and Emera, an international energy company based in Nova Scotia. It proposes building a pair of 6-megawatt floating wind turbines off Monhegan Island, which would produce enough electricity for about 6,000 homes.
The developers would invest $120 million, which they would recoup by selling Mainers electricity for the next 20 years at rates starting at 23 cents per kilowatt-hour, increasing the average residential customer’s bill by 75 cents per month.
Even though this project is expected to create about 340 jobs, it doesn’t look like much of a deal on its face. But if this experiment succeeds, it has a chance to transform the state’s economy.
After the floating turbines off Monhegan, the next step would be to build a 500-megawatt wind farm 10 miles from shore, which would produce power at prices competitive with coal and gas. According to documents filed with the PUC by Aqua Ventus, that would be a $2.5 billion project, which would generate about $300 million in annual revenue – a little less than what the entire lobster industry produced in 2012.
If plans to build as many as five offshore wind farms are achieved, Maine would have something in abundance that other states will need – carbon-free electricity – and would have a source of power that would give our industry an energy advantage for a change.
That future is far from assured and at best it will take years of trial and error to make it work, but awarding this contract now is an essential step to achieving that goal.
This is not the first time we have had an opportunity to invest in offshore wind. We were critical of the LePage administration for torpedoing an already agreed-upon rate deal with the Norwegian energy giant Statoil, which was planning to build its own floating turbine demonstration project. As a result of amendments to the omnibus energy bill, the competition for Statoil’s contract was reopened, giving Aqua Ventus more time to develop its proposal.
Statoil predictably refused to participate and left Maine. We opposed alienating a business ready to make such a big investment in Maine, but it’s time to move past Statoil.
Two ocean wind projects would be better than one, but one is far better than none at all, and that is what Maine could end up with if the state passes on this opportunity.
Maine can’t do much about its lack of gas reserves or federal power projects, but we don’t have to be a power importer forever. This is an opportunity to turn us into a power supplier and we should not let it pass.