PORTLAND (AP) – Central Maine Power Co.’s proposed $1.5 billion upgrade of the state’s power grid would give a big boost to the state’s construction industry at a time when it’s sorely needed, according to a new economic impact study commissioned by the utility.

The state’s largest construction project in years would support an average of 2,100 jobs per year over the four-year construction period, said Charles Colgan of the University of Southern Maine’s Muskie School. The average pay would be about $38,000 annually.

CMP wants to build a new 345,000-volt transmission line from Orrington to Newington, N.H., doubling capacity of the grid’s backbone.

It contends the improvements, the first major upgrade since 1971, are necessary to maintain stability of the power grid beyond 2012.

“Our system is not strong enough to keep the lights on in Maine into the future,” CMP President Sara Burns said.

But it also would create jobs during an economic downturn, and the fortified power grid would support proposed wind power projects in western Maine. But questions about the size of the scope of the upgrades could plead to changes or delays.

The Maine Public Utilities Commission has planned public hearings this spring on the project, dubbed the Maine Power Reliability Program. If it’s approved, the costs would be shared by ratepayers across New England; Maine’s share would be about $18 million per year, CMP said.

ISO New England, the Massachusetts-based nonprofit that oversees the region’s wholesale electricity market, supports CMP’s proposal. But the project can’t proceed without additional approvals from the PUC, along with the Maine Department of Environmental Protection, Army Corps of Engineers and 78 towns along the utility easements.

More than 100 parties have intervened in the deliberations, and there’s at least one counterproposal that would scrap the upgrade altogether. A Portland-based energy company has proposed using local solar arrays to shore up electricity supply on high-demand days.

Critics include property owners along the transmission line route who’ve questioned the necessity of the massive construction project.

Maine’s power grid was built after a blackout in 1965 from New Jersey to Maine. Since then, demand for electricity in CMP’s service territory has doubled.

Another blackout from Ohio to New York in 2003 led to federal energy legislation and provided an additional impetus for CMP to act. CMP hopes to begin construction on the new project this summer, though it acknowledges the timetable is aggressive.

In bolstering its case for the upgrade, CMP enlisted Colgan, a former state economist, to look at the potential economic benefits of the project. Colgan said he did not look at the technical merits or impact on ratepayers – only economic impact.

“It is clear that much of what CMP is proposing has to be done at some point. So like a lot of other infrastructure projects, if it’s got to be done, now is not a bad time to do it,” said Colgan.

Projects like this one, he reported, typically support existing construction jobs. In this case, however, new jobs will be created because many in the construction industry are either unemployed or underemployed because of the recession.

Despite those benefits, Colgan said the key benefits are the continued reliability and improved efficiency of the state power grid.

“The important point is, the project is not being done solely for the purpose for employing people during the next four years. It’s being done for the system reliability and energy cost benefits over the next 30 years,” Colgan said.

While the CMP project moves forward, a $625 million power grid expansion aimed at connecting northern Maine to the rest of the New England power grid remains on hold.

The Maine Public Utilities Commission last month set aside the Maine Power Connection, which would have connected northern Maine to CMP’s power grid, because of technical issues.

AP-ES-03-05-09 1646EST

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