Maine Democrats say welcome mat still out for Norwegian energy giant

AUGUSTA — Democratic lawmakers and Republican Gov. Paul LePage exchanged jabs again Thursday over energy policy, a day after lawmakers overrode LePage's veto of an energy bill that many praised as a bipartisan compromise.

Part of the veto override depended on another bill that allows the University of Maine to bid on an offshore wind-power demonstration project. The project already had been awarded to Norwegian energy giant StatOil by the Maine Public Utilities Commission.

That bill was passed into law late Wednesday before Republican lawmakers in the state Senate would support an override of LePage's veto of the other bill, which aims to expand New England’s natural-gas infrastructure, boost funding for energy efficiency, directly lower businesses' electricity costs and make it more affordable for residents to abandon oil heat with state-backed grant programs.

Many components of the bill were suggested by LePage and Patrick Woodcock, the director of the governor's energy office. 

LePage opposed the StatOil arrangement with the PUC, which included a guaranteed price for power from a demonstration project that is well above the standard rate and would be paid for by electric consumers in Maine.

The governor argued that if ratepayers in Maine were going to fund offshore wind development through higher electric rates, the University of Maine should be allowed to compete. Earlier, the university declined to participate in the bid process with the PUC but did offer its support to StatOil, with which it has a collaborative relationship.

To gain the support of key Republicans in the Senate, a handful of Democrats, including ranking members of the Energy, Utilities and Technology Committee, agreed to a compromise that would allow the university a chance to bid on the PUC project. That will stall StatOil's progress while they await the results of the PUC decision, if the university chooses to bid on the project.

The PUC contract is valuable not only for the above-market rate for the power but because it makes the contract holder eligible for key federal Department of Energy grants for offshore wind development.

Democratic leaders said the process for selecting a bidder was complete and to reopen the process would send a negative message to companies looking to invest in Maine. Moreover, some Democrats said, the move could jeopardize the $200 million StatOil is looking to invest and the hundreds of jobs its project could lead to for Mainers.

The newly passed measure still gives the PUC final say on which contracts are awarded, but it does give the university a foot in the door.

Under the legislation, which passed the Senate 22-13 and went under a unanimous vote in the House without a roll call, the university could bid on the offshore demonstration project, previously awarded to StatOil, but the university must complete its bid by Sept. 1, 2013.

Those who supported the measure as a way to gain the support of LePage and Senate Republicans who agreed with the governor described the law allowing the university in on the bid process as "innocuous."

Sen. John Cleveland, D-Auburn, one of the co-authors of the overall energy bill, said the concession to LePage on the university would create only a small delay for StatOil. Cleveland, who supported the second bill from the Senate floor, said failing to do so would place all of the other positive things the bill did for Maine's energy future in jeopardy.

"The challenge was persuading the Democrats that (the new language) likely did little harm to the existing offshore wind proposal," Cleveland said.

In an attempt to fend off any ill will toward Maine from StatOil, Democratic leaders reached out to company executives first thing Thursday.

"Today, we had a responsibility to reassure StatOil that what happened last night is not indicative of how Mainers do business,” Senate President Justin Alfond, D-Portland, said. “In our conversation today, we reassured StatOil that we stand ready to work with them to ensure their success in Maine.”

LePage fired back.

“Sen. Alfond and other Democrats are fighting to give preference to a multi-international corporation, which has not guaranteed it will provide long-term jobs for Mainers,” LePage said. “Prior to moving forward with a $200 million contract, I would prefer to consider the economic opportunity to our own university system, right here in Maine."

But Senate Majority Leader Seth Goodall, D-Richmond, said LePage's stance was puzzling at best and disingenuous at worst.

Goodall said Thursday the governor had been speaking for two years about attracting investment to the state and often says, "Capital goes where it's wanted and stays where it's appreciated."

Goodall said StatOil was already spending money in Maine doing research and outreach as part of the PUC process. StatOil's term sheet with the PUC also requires the company to invest in Maine and hire Maine workers with an up-front investment of $120 million.

"The problem is it sends a terrible business signal to the rest of the country and the globe in this matter," Goodall said. "Because this is a worldwide industry in which not only states are competing, but we are directly competing with Scotland."

Goodall said Democrats were equally willing to support research and development in offshore energy by the University of Maine, but Republicans were unwilling to help them find ways to further fund the university, instead chosing to pit the school against StatOil.

He said allegations by LePage and other Republicans that Democrats were not supporting the university system were false and that it was Democrats who fought off more than $40 million in cuts to the system offered by LePage in his budget proposal.

Other critics of the governor's political tactics included the Natural Resources Council of Maine, a nonprofit environment and conservation advocacy group with about 35,000 members statewide.

“It was unfortunate that the governor and his legislative allies tried to obstruct and jeopardize the bill throughout the process," said Dylan Vorhees, the NRCM's clean energy director.

The legislation that allows a reopening of the bid process already won by StatOil sent a regrettable signal, Vorhees said.

"We hope that the Public Utilities Commission will continue to move quickly to finalize a contract for offshore wind by the end of the year," Vorhees said.

Still, the underlying bill was an important one for Maine, he said.

“It is hard to overstate the importance of this bill for increasing energy efficiency and reducing pollution from energy consumption," Vorhees said. "It will increase investment in efficiency, take the politics out of decision-making on future efficiency investments and save hundreds of millions of dollars."

sthistle@sunjournal.com

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Comments

Frank Heller's picture

STATOIL Should be paying us,not the other way around

Statoil's 2012 net profit slid 12.5 percent to $12.5 billion,......only $12.5 billion; so lets have Maine taxpayers help them out; right? Which Democrat lobbied for this 'deal' and how much did Statoil's lobbyist pay them or their special friends for the privilege?

 's picture

Why should Maine rate payers

Why should Maine rate payers be asked to support a Norweigan company? Should we be courting foreign investment that is detrimental to Mainers? Why isn't StatOil building these turbines in Norway?

 's picture

The democrat's view makes the

The democrat's view makes the notion that a company's success depends on meeting customer's demand irrelevant. A company's success can be prearranged with a government willing to burden customers with rate and tax increases.

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