AUGUSTA (AP) – Maine utility regulators on Thursday ordered the state’s two largest electric utilities to pursue reforms of their relationship with the regional power grid operator before signing new long-term participation agreements next year.

The Maine Public Utilities Commission said state ratepayers don’t get enough in return for the state’s participation in ISO New England under the present utility agreements. The three commissioners also said state consumers’ interests aren’t represented in decision making.

The commissioners stopped short of ordering the utilities to pull out of the grid because parts of the ISO New England structure benefit Maine’s energy markets and consumers.

“Mainers’ interests are poorly served by the status quo… But withdrawal from ISO-New England poses its own risks and we believe the best way forward is to direct the utilities to enter good-faith negotiations with ISO New England to make sure Maine’s consumers are getting a fair deal,” Commission Chairwoman Sharon M. Reishus said Thursday in a statement.

ISO New England, for its part, is holding stakeholder discussions to address concerns surrounding cost allocations, cost controls and governance, she added.

Ellen Foley, ISO New England spokeswoman, said the power grid operator understands Maine’s needs to evaluate its options. But, she said, “We believe there’s a logical and mutually beneficial relationship that exists between Maine and the rest of the New England states.”

Central Maine Power and Bangor Hydro-Electric Co. were required to report back on their negotiations, and the commission will send a report to state lawmakers next week. The current power grid agreements with CMP and Bangor Hydro expire on Feb. 1, 2010.

Among other things, the Maine commission wants ISO New England to take costs into account when approving power grid improvements, create the position of regional consumer advocate, and give greater consideration to renewable energy goals set by the New England states.

The commissioners also want better control of cost overruns. The Maine commission contends ISO New England’s rules and regulations lack adequate barriers against transmission cost overruns, which have topped $4 billion across the region since 2004.

Further proceedings to assess progress of negotiations to reach these objectives will occur in late June or early July, Reishus said.

“These issues are very difficult yet so significant for the people of Maine,” she said. “This is not the final act in this play.”

If negotiations fail to produce results deemed satisfactory by the commission, then the commissioners could consider further action, including the possibility that CMP and Bangor Hydro not renew their agreements with ISO New England.


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