HALLOWELL

The Maine Public Utilities Commission voted 2-1 this morning to allow Statoil North America to move ahead with plans for an offshore wind energy pilot project in federal waters off the coast of Maine.

PUC Chairman Thomas Welch, who had expressed reservations about the deal in October and urged Statoil to revise its term sheet to address concerns about pricing and long-term economic benefits to Maine, cast the deciding vote.

Welch, who in October had said he would vote against the term sheet as it was originally submitted, said Thursday that Statoil’s proposed contract modifications and public comments submitted in response to the revisions helped change his mind.

“It was a difficult decision,” Welch said. “I was disappointed that the firmness of the commitment for the future of the project was not what I described earlier.

Nevertheless, the price reductions and indications of future activities in Maine, recognizing that those are speculative” were enough to convince him that Statoil’s proposal complies with the intent of the 2010 Ocean Energy Act, which the Legislature passed to encourage development of energy production in Maine waters.

Statoil’s revised proposal, submitted Jan. 14, cuts the energy cost from $290 per megawatt-hour to $270 per megawatt-hour and adds a “good faith” commitment to involve Maine contractors in any commercial wind farm Statoil develops along the Atlantic Coast from Maine to Maryland before 2025.

Commissioner David Littell joined Welch in voting for the proposal.

Commissioner Mark Vannoy voted against accepting the revised term sheet. Vannoy said he doesn’t doubt that Statoil will succeed, but he questioned whether the price of energy generated by floating offshore wind turbines could ever become competitive with other sources.

As a pilot project for more extensive development of offshore wind energy production, Statoil North America proposes to moor four floating turbines in federal waters off the coast of Maine to generate 12 megawatts of energy. On May 2, 2011, Statoil submitted a proposal for the project, called Hywind Maine, to the PUC, which had issued a request for proposals after the Legislature passed the 2010 Ocean Energy Act. Statoil was the only company to respond.

Thursday’s PUC decision allows Statoil to move ahead with a 20-year contract to sell electricity from its offshore wind experiment to Central Maine Power, which had expressed a number of concerns about the deal in comments submitted to the PUC.

Patrick Woodcock, the new director of the Maine Governor’s Energy Office, also questioned whether the revised term sheet properly shielded Maine electricity ratepayers from the project’s risk. And he sought greater assurances from Statoil about the project’s long-term economic benefits in Maine.

Welch and Littell acknowledged those concerns today, but said the project’s potential to push Maine toward becoming a leader in developing offshore wind technology warranted support.

Commissioners suggested a number of changes to the term sheet to ease CMP concerns.

U.S. Sen. Angus King, I-Maine, writing as a private citizen, and Democrats in the Maine Legislature, including House Majority Leader Seth Goodall, D-Richmond, submitted comments endorsing the project.

Welch described offshore wind energy technology development as a tool to help keep talented young people in Maine by helping the state become a center of research and expertise on the topic.

“I have no doubt that the pilot will bring substantial knowledge to Maine,” he said. “This may be most valuable aspect of the contract.”