BANGOR (AP) – Brascan Corp., the company poised to buy bankrupt Great Northern Paper Inc., will soon be selling electricity from a massive hydroelectric system it bought from Great Northern in 2001.

The Public Utilities Commission on Wednesday gave its approval for Bangor Hydro-Electric Co. to build a transmission line to connect the hydroelectric system to New England’s power grid. The approval paves the way for Toronto-based Brascan to start selling wholesale electricity on the open market.

According to industry estimates, Brascan could generate $15 million or more a year if it sells all the power it produces at wholesale rates of 4 cents per kilowatt hour.

A Brascan subsidiary, Great Lakes Power Inc., purchased Great Northern’s hydroelectric system in October 2001 for an undisclosed price. The system consists of six hydroelectric power stations and 11 dams, which have a generating capacity of 130 megawatts.

Brascan first got the Legislature to change a century-old charter stating that the power from the generators could only be used by Great Northern. It then had to get Bangor Hydro to build a transmission line.

However, the Industrial Energy Consumers Group (IECG) and the Paper, Allied-Industrial, Chemical and Energy Workers International Union (PACE), which represents most of Great Northern’s workers, objected to the construction of the transmission line.

According to documents filed with the PUC, the groups were concerned that Brascan was more interested in selling electricity in the New England Power Pool than in selling power to Great Northern because it could generate more revenue in the wholesale marketplace.

Now that Brascan will apparently be the new owner of Great Northern’s mills in Millinocket and East Millinocket – the closing is set for no later than May 5 – those objections have been dropped.

The line, which will transmit 126 megawatts of electricity, will run between a new substation in Chester and a new substation in East Millinocket.

Under a deal between Brascan and Bangor Hydro, Bangor Hydro will be reimbursed the nearly $15 million it will cost to construct the line, and will be given a letter of credit to solidify the agreement.

Eric Bryant, an attorney with the Public Advocate’s office, on Wednesday called the letter of credit “a guarantee we found very attractive.”

“If Brascan wants to take a risk, that’s fine with us as long as rate payers are not left holding the bag,” said Bryant.

AP-ES-04-24-03 1203EDT



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