LePage hopes Canadian power will lower electricity rates

AUGUSTA — The LePage administration is exploring a deal that could make Maine the conduit for Canadian energy companies to sell electricity in New England.

Gov. Paul LePage hopes an agreement will lead to lower rates for Mainers and businesses. Over the past couple of months, his administration has engaged in preliminary talks with electricity providers in New Brunswick and Quebec, where residential and industrial rates are significantly below Maine's.

Augusta lawmakers applaud the governor for negotiating with Canadian providers, which include Hydro-Quebec, North America's largest utility. However, they also caution against inking a deal that may not deliver the low rates the governor wants and that could undercut the state's renewable energy industry.

"There's never just cheap energy for the taking," said Sen. Phil Bartlett, D-Gorham. "There's always a price."

Ken Fletcher, who heads the administration's Office of Energy Independence and Security, said negotiations are in the early stages, but are part of LePage's developing energy initiative. 

"Our goal is to create options and give people access to those options," Fletcher said.

LePage isn't the first governor to seek a deal with Hydro-Quebec. Gov. John Baldacci also turned an eye north seeking to capitalize on the mega-provider's eagerness to penetrate the New England market. But those efforts hit a series of roadblocks, including concern from Maine's wind power lobby that Canada's cheap, heavily subsidized electricity would halt a state initiative to become a regional provider of renewable energy.

That opposition likely will surface if the administration reaches terms with Hydro-Quebec, which has developed wind power to complement its ever-expanding development of hydroelectric facilities.

Rep. Stacey Fitts, R-Pittsfield, co-chairman of the Energy Committee, said it's unlikely that a company like Hydro-Quebec could flood the New England market with cheap electricity. However, he said, it could ask to be included in Maine's Renewable Portfolio Standard, which mandates that providers derive a certain amount of electricity from renewable resources.

The intent of RPS was twofold: first, to increase the use of renewable power by awarding providers credits paid for by ratepayers; second, to encourage in-state development of renewable power sources such as wind.

Fitts said that if Hydro-Quebec power can count toward the state's RPS mandate, it could stymie Maine's wind power development, which he said, is providing jobs while creating a homegrown source of power generation.

Said Fitts, "If we're going to sacrifice our generators and export dollars out of the state, out of this country, how is that different than what we're doing with oil?"

Bartlett agreed.

"To risk throwing (wind power development) away without seeing huge savings would be a real concern," he said.

Hydro-Quebec has already sought to have its power count toward the Renewable Portfolio Standard in its expansion efforts in other states. The issue became a sticking point in negotiations with state officials in New Hampshire. However, the company was successful in reaching an RPS deal with Vermont, a state that derives a significant amount of its electricity from Hydro-Quebec.

Fletcher, with the state energy office, said RPS has already come up during talks with Hydro-Quebec.

LePage has no love for RPS. Earlier this year, he unsuccessfully attempted to freeze the program's expanding renewable mandates, arguing that it was driving up electricity rates.

Rep. Jon Hinck, D-Portland, said the governor's lack of emphasis on Maine-grown renewable power development might be a sign that RPS could be folded into a deal with Hydro-Quebec.

Fitts, meanwhile, said the governor will have to weigh other issues, including whether Canadian power would be low-cost enough to warrant continued dependence on power generation outside Maine.

Canadian providers would bid against other regional generators in ISO New England, which distributes electricity to all six New England states. Right now, Fitts said, ISO New England is dominated by natural gas providers who set the market rates.

The region's reliance on natural gas is one reason New England electricity prices are high compared to the rest of the country.

Fitts said a company like Hydro-Quebec would have little incentive to significantly underbid its competitors because it would be competing against more expensive natural gas rates.

"Hydro-Quebec is interested in making profits," he said.

Additionally, Fitts said, the company's Canadian plants are paid for by the government, which is a big reason its electricity is so cheap. That means electricity would remain low-cost in Canada, while Maine rates could be significantly higher.

And that, Fitts said, could leave Maine more reliant on outside energy sources while remaining at a competitive disadvantage.

Such arguments are not lost on Fletcher. He acknowledged that a deal with Canadian providers might not dramatically lower electricity costs. However, he said, it could lower them enough to make a difference.

After all, he said, the state was poised to take advantage of several factors, including ISO New England region's planned retirement of a significant portion of coal- and oil-fired plants. Additionally, the state has identified several energy corridors that would allow new transmission lines to accommodate additional Canadian power capacity.

The corridors run along existing infrastructure, such as pipelines, highways and railroads.

Expanding transmission capacity is expensive, and the cost is often borne by ratepayers. However, Fletcher said, if a provider like Hydro-Quebec could directly connect with a major user in southern New England, the company could build — and fund — a so-called merchant line.

"A merchant line is the best deal for ratepayers," Fletcher said. 

It remains to be seen whether the state can reach an agreement with Canadian providers and whether such a deal would be the answer to high electricity costs.

Fletcher was careful not to promise too much.

"(Reaching a deal with Canadian providers) won't be a silver bullet, even if we're successful," Fletcher said. "But it will be part of the overall energy picture."

smistler@sunjournal.com

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Comments

Brad Blake's picture

How about Fairness in Reporting!

Once again, we have an article that is totally slanted towards protecting the wind industry. Whenever Fitts and electricity are in the same article, how about disclosing his representing his employer Kleinschmidt Assoc., which has contracts with the wind industry. Whenever Hinck and electricity are in the same article, how about disclosing that Hinck is married to First Wind lawyer Juliet Browne. These two worked strenuously to defeat every attempt to modify the heinous Expedited Wind Permitting statute in front of their EUT Committee in this year's legislative session. I know. I was there and witnessed the parade of citizens attempting to have a voice in democracy and to bring sanity to a law that has unleashed an onslaught of destruction from industrial wind sites. The least effective, most heavily subsidized, and most costly form of electricity generation pushed onto us by these types of politicians. Where are comments from the citizens who are fighting this scam? Where are remarks by respected analysts like Gordon Weil? Where is the balance in the reporting?

Alice Barnett's picture

Geraldine Richards lives in Byron

GR has to look at turbines on Record Hill even tho Byron ousted Angus.
Jay, Wilton, all border towns are going to wish thay could do something about WIND turbines. GO HYdro GO.

Alice Barnett's picture

Fitts fits

notice WIND people, FITTS will argue til they are blue. but I say, leave our mountains alone and run your corridor along the turnpike, railway etc.

Geraldine Richards =Fitts is having a Fit cause if this goes thru he looses MONEY - Power from Canada can make CMP rates lower if they want to compete and BAN Turbines...I am all for NO WIND TURBINES

Karen  Pease's picture

Considering hydro

It would be refreshing to see reporters interview private-sector energy and economics experts for their perspectives, instead of relying on the pro-wind players on the State’s Energy, Utilities and Technology Committee. The current policy of getting the opinions of the same people--huge supporters of the wind lobby--for these stories is guaranteed to keep the people of Maine from obtaining factual data and unbiased information.

Fitts and Bartlett were on former Governor Baldacci’s fabled Wind Power Task Force, the cabal responsible for pushing through the policies supporting the current expensive and unnecessary built-out of industrial wind facilities on our mountains. Hinck is married to the wind industry’s preeminent attorney, Juliet Browne, who (along with others in her firm) represents Trans-Canada, First Wind and Highland Wind. In my opinion, these gentlemen can no longer be considered objective.

In speaking to attempts to purchase Canadian hydro in the past, the article states “But those efforts hit a series of roadblocks, including concern from Maine's wind power lobby that Canada's cheap, heavily subsidized electricity would halt a state initiative to become a regional provider of renewable energy.”

So, Canada is subsidizing “cheap” hydro power. OUR our policy makers decided we would subsidize wind—the least reliable, most heavily subsidized (per megawatt) energy source there is.

What is ironic is that one of the strongest arguments used to kill legislation allowing Quebec Hydro to build a transmission corridor through Maine was that such unsightly transmission would have a negative impact on Maine’s fabled “Quality of Place”.

The Expedited Wind Permitting Law effectively removed “scenic impact” as an acceptable reason to oppose wind development, though--and we are now watching the construction of the 450 mile long MPRP, and the 39 mile long Wyman Station-to-Benton transmission upgrade. And this is just the beginning. Maine rate-payers are footing the bill for this transmission—even though the electricity is not needed in Maine and is destined for the New England grid.

“"Hydro-Quebec is interested in making profits," he (Fitts) said.”

Trust me on this. Wind developers are making profits. And you and I are picking up the tab at the federal, state, and sometimes even at the local levels (if TIFs are granted). Of course Hydro-Quebec is interested in making profits. Perhaps if Maine negotiates some less-expensive electricity, our own small and large businesses will be more likely to make profits, too.

Our elected State Representatives and Senators would do well to look out for the Maine people as a whole, and not for their own favored special interest groups. Rather than attempting to thwart this Administration’s attempts to negotiate a good deal for Maine with our neighbors to the north, they should be asking “What can we do to help?”

Respectfully,
Karen Pease
Lexington Twp., Maine

Penny Gray's picture

Electricity rates in Europe

Electricity rates in Europe have tripled due to industrial wind power. When the tax payer subsidies run out, they'll triple here, too. Vermont got a good rate from Hydro-Quebec. My guess is, LePage can do the same or better. Canadians are building another dam on the Churchill River and will be looking to sell even more of their hydro power. If we can spend all that money buying Chinese junk to put on our mountains to produce negligbie amounts of high priced power, we can surely buy hydro power from our northern neighbors. I'd rather support Canada's ecnomomy than China's.

Meanwhile, let's get those thorium flouride reactors on line!!!

Gary Steinberg's picture

Fitts WREAKSo of Conflicts, and should ...

RECUSE HIMSELF from any discussions on Hydro Power or Wind here for that matter.

This is absurd, and this should be investigated.
LaPage should force him to RECUSE on this issue.

SEE THIS from Kleinscmidt's Web site(2009), with Fitts being the engineer in question.
"and we have been very active in the
development of state regulations in Maine, where one of Kleinschmidt’s engineers is a member of the Governor’s Ocean Energy Task Force."
and this:

"Kleinschmidt is one of the United States' leading hydropower
engineering and licensing firms and has designed and licensed
numerous hydroelectric projects throughout the country. In
addition to hydroelectric power, Kleinschmidt is involved in
other aspects of the energy industry and has performed a
number of investigations related to the development of other
renewable energy sources, including wind, solar, and
biomass.

EUT Co-chair Fitts, once again undermining the Governor, talks about how letting Canadian hydro qualify for renewables goals would hurt Maine's budding wind industry.

Would this be a conflict, i.e., the co-chair of EUT fighting foreign hydro because it may compete with the domestic hydro (as well as wind) that is his employer's specialty?

Governor LaPage, this wreaks.
Don't let this self-serving "Kleinschmidt Shill" hurt all the citizens and businesses of Maine by increasing our electric costs more!!

Alan Michka's picture

Wind power arguments crumbling

It's incredible that, between the three of them, Bartlett, Fitts and Hinck can't articulate a single logical argument to support their intent to obstruct virtually any source of electricity that's not wind power.

"Fitts said that if Hydro-Quebec power can count toward the state's RPS mandate, it could stymie Maine's wind power development". Why is that Mr. Fitts? Maybe, because the cost/benefit ratio of wind power is so high that it can't compete?

Fitts: "Hydro-Quebec is interested in making profits," he said. No kidding? And wind turbine operators aren't?

You've gotta love watching the three amigos of wind - running low on good reasons to force wind power development on Maine - promoting a higher priced electricity source that degrades some of Maine's greatest assets.

It was good of the Sun Journal to include comments from the legislative backbone of Maine's wind industry. Mainers get a chance to see just how weak and desperate the arguments in support of unchecked wind development in our state have become.

Kim Waite's picture

We're...

...relying on the Canadians again? I see a pattern here. By the way, where are Paul LePage's 17 siblings? In America or in Canada?

Brad Blake's picture

Hmmm

Let's examine a few things here. Emera, a Canadian company, owns both Bangor Hydro and Maine Public Service up in Aroostook. Iberdrola, the Spanish company that is also one of the worlds biggest wind developers, owns CMP, and is putting up met towers for wind projects in spite of the law separating electricity distributors from generators (remember CMP and Bangor Hydro had to sell all their production assets?). Look at the wind projects, using Chinese or German or Danish turbines and blades made in places like Brazil, all paid for with US taxpayer money. The Canadians have built huge generating capacity in places like James Bay and Churchill Falls. They have developed gas at Sable Island, NS and are developing gas resources off Newfoundland so rich that the Newfies will never want to fish for cod again. But here in Maine, we throw up roadblocks to partnering with our Canadian neighbors and lowering our energy costs and push heavily subsidized, costly, ineffective wind power. How stupid are we?

As far as Gov. LePage goes, I do criticize him: Gov., what has taken you so long? Be bold in taking action to lower Mainers' energy costs!

Dan McKay's picture

Rhetoric is boundless. Cut to

Rhetoric is boundless. Cut to the chase. What is my electric bill going to look like ?

Dan McKay's picture

Notwithstanding the rhetoric

Notwithstanding the rhetoric from Rep. Fitts, Bartlett and Hinck, It is obvious that the first State to repeal the RPS and gain freedom from the high price of wind, will be the first to benefit from cheaper electricity from Hydro.

Gary Steinberg's picture

The Price of the Wind Scam in Maine will ....

kill more businesses and make Maine less desireable to them as well .
Maine stays poor because of self-serving politicians and crony capitalism from the likes of Hinck, Fitts, K. Adams , Angus King and others.
Those elected self-servers should be openly chastised, investigated and removed ,to preserve our state.

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