– By NAOMI SCHALIT and JOHN CHRISTIE

Maine Center for Public Interest Reporting

Less than two weeks ago, a Canadian energy company and a major wind power developer with turbines in Maine announced they had closed a deal worth hundreds of millions of dollars to expand wind power projects across the Northeast.

But the announcement left out one important fact that could jeopardize the deal: Just days before, the state’s Office of the Public Advocate and a Maine utility had filed legal appeals challenging a state agency’s ruling that cleared the way for the venture.

“I was somewhat surprised” to see the announcement that the deal had closed, said Eric Bryant, the attorney in the Public Advocate’s Office, who filed one of the appeals.

“It’s unusual for a company to make a decision when there’s risk involved that it may have to undo it because of a legal matter.”

The partnership is between utilities owned by Emera, a Canadian energy company that owns electric utilities in the Northeastern U.S., Atlantic Canada and elsewhere, and First Wind, which develops, builds, operates and owns utility-scale wind projects across the United States. First Wind is the Northeast’s largest wind power developer and has four major wind projects in Maine, with a fifth, Bull Hill, under construction.

“The completion of the joint venture could lead to up to $3 billion in future economic investment in the region in the coming years,” stated the June 15 announcement.

The deal meant First Wind would get the cash from Emera that it needed to build more wind turbines after a failed attempt to go public in 2010. Maine currently has 205 commercial wind turbines that can produce 400 megawatts of electricity. The Emera-First Wind venture could pave the way for construction of turbines producing an additional 1,200 megawatts.

The appeals filed with the Maine Supreme Judicial Court by the Public Advocate and Houlton Water Co. argue that the state Public Utilities Commission should not have allowed the venture to proceed; it would violate state law prohibiting utilities from owning both transmission and generation infrastructure, they say. A third appeal was filed June 20 by the Industrial Energy Consumers’ Group, which represents large energy users and advocates for lower electricity prices.

The PUC approved the joint venture in April, which cleared the way for the two companies to complete the process that led to the June 15 announcement.

Bangor Hydro and Maine Public Service, the regulated utilities in Maine owned by Emera, were the applicants to the PUC. Commissioners approved the deal over the objections of the PUC staff, which said it might mean higher prices for ratepayers.

The Public Advocate and other appellants argued that the proposal would violate the state’s landmark electricity restructuring act, which barred transmission companies like Bangor Hydro from owning electricity generation. That law prohibits utilities from owning both transmission and generation because it was believed to be anti-competitive and to contribute to high electricity prices.

The appeals also claim that the PUC acted outside its legal authority in imposing a long list of conditions on Emera and First Wind designed to mitigate any potential harms from the deal. Technically, Emera, First Wind and one other party to the deal, Canadian company Algonquin Power & Utilities Corp., aren’t regulated by the PUC, the appellants said.

The companies filed letters with the PUC saying they would submit to the commission’s jurisdiction, but the appellants said that neither the PUC nor the companies who submitted to its jurisdiction can legally extend the commission’s statutory authority by simply saying so.

“The commission has, in order to make this deal reasonable, set forth a slew of conditions that apply to First Wind, Algonquin and Emera,” said Alan Stone, attorney for Houlton Water Co. “We argued you can’t do that because you don’t regulate those entities and they’re not parties to the case.”

Stone says that without the legal authority to impose and enforce the conditions, the conditions can be challenged at any time.

“The commission said, ‘Just sign a letter that you agree to them,’ and our position is that it’s not enough, you can’t invest the commission with powers it doesn’t have by simply signing an agreement.

Spokespersons for the PUC, First Wind and Emera declined to comment on the appeals.

The Maine Supreme Judicial Court is likely to consider the case in the fall, after the appellants file their briefs in August and the PUC files its response in late September.

The Maine Center for Public Interest Reporting is a nonpartisan, nonprofit news service based in Hallowell.

It can be contacted at:

[email protected], or at pinetreewatchdog.org