Bangor Hydro asks PUC to reconsider Basin Mills project

Saying that the decision of the Public Utilities Commission to quit for now its review of a proposed hydropower facility on the Penobscot River at Orono jeopardizes the future of the project, Bangor Hydro-Electric Co. has filed a petition asking the PUC to reconsider its decision.

The PUC has 20 days to act on Bangor Hydro’s request. If the PUC takes no action, that represents denial of the request, said Charles Jacobs, administrative director of the commission.

The PUC, acting on a recommendation from its staff, voted on July 30 to deny without prejudice Bangor Hydro’s application for a certificate of convenience and necessity for the dam at Basin Mills in Orono and for modernization of the power house in Veazie. The primary basis for the denial was that the application was premature.

Construction of the 38-megawatt project at Basin Mills wasn’t scheduled to start until 1996. Work on the 8-megawatt project in Veazie wouldn’t start until 1994.

In addition to saying that the application was submitted prematurely, the PUC’s denial also said that the commission had been looking for a comparison of the hydro project with proposals to generate power made by independent producers. Such a comparison was missing.

The PUC also found fault with the company’s conservation philosophy and efforts.

Bangor Hydro officials filed for reconsideration late last week, reiterating their argument that review of the projects by the PUC is appropriate now. The company also responded to the PUC’s criticisms concerning a fair evaluation of the projects and their approach to conservation.

Concerning the timeliness of a review of the projects, Bangor Hydro argued, “It should be clear to the Commission that major utility projects such as Basin Mills and Veazie simply cannot be successfully pursued without a ratification by the Commission of the appropriateness of the direction — however conditional that ratification may be — at a reasonably early stage in the life of the project … The Commission’s unwillingness to act makes continuation with the project extremely precarious.”

In an interview this week, Robert Briggs, president of the utility, stressed that it was critical that the PUC give the company some indication of whether it is worthwhile to continue pursuing the project.

“We have $3 million tied up in Basin Mills without knowing how it will come out,” Briggs said.

Briggs added that abandoning a hydroelectric project at a time when world events have made oil an uncertain commodity would seem to make little sense.

The utility executive also argued that the appropriate order for review of the Basin Mills and Veazie projects should begin with the PUC, move to the Board of Environmental Protection and end with the Federal Energy Regulatory Commission.

The PUC application was submitted 10 months ago, with both environmental applications submitted in midsummer.

The PUC, in its decision, said that it wanted the environmental uncertainties settled before conducting its evaluation. The Basin Mills project faces considerable opposition from environmental groups and fishermen. The Penobscot River Coalition, supported by a national organization, American Rivers, is leading the fight against the new dam.

According to Bangor Hydro officials, the environmental reviews can’t be put on hold even though the PUC has put off its review, because the federal licenses to operate the power plants at Veazie and at Orono have expired. The FERC required Bangor Hydro to file its application for Basin Mills and Veazie in order to be able to continue to operate the two power plants.

In answer to the other PUC criticisms, Bangor Hydro officials restated their view that the $115 million hydroelectric project proposed at Basin Mills, coupled with the $28 million modernization at Veazie, represents the best source of new power.

Briggs admitted that hydro projects are expensive, “but once they are built, they last for 100 years.” How can such a long-term project be compared with the short-lived alternatives that independent power producers might propose? he asked.

On the conservation question, Briggs said that the company holds a view that is fundamentally different from that of the PUC. Bangor Hydro officials argue that they aren’t mandated to pay for and carry out conservation measures for their customers and that it isn’t a good idea for utilities to pay for conservation.

“Paying for the cost of conservation is a subsidy,” Briggs said. Those customers who paid out of pocket for their own conservation will pay higher rates for power so the company can cover the cost of conservation for customers who didn’t make any improvements, he said.

“We say the subsidy isn’t necessary,” Briggs said. “There are other ways to persuade the public to carry out conservation.”