County power price deal expected> MPS would still rely on Canadian grid

BANGOR — Officials of Maine Public Service Co. said Wednesday they are sure a deal can be worked out with New Brunswick Power to ensure that Aroostook County will have access to competitive electric prices when deregulation becomes effective.

But state officials need to approve the potential deal so the utility, which is connected to the provincial power company, is able to sell its generating facilities to a Wisconsin firm next year.

“We anticipate that we’ll be able to participate in a free and unregulated atmosphere,” said Richard Suslick, director of power development for Wisconsin Power Supply-Power Development Inc.

The Green Bay, Wis., company has offered to buy MPS’ generating plants for $37.4 million. Included in those assets is a hydroelectic dam in Perth-Andover, New Brunswick.

Suslick and MPS officials met Wednesday with the editorial board of the Bangor Daily News to discuss the need for competitive rates in Aroostook County.

Such a sale to WPS-PDI would allow MPS to forgo a 3 percent rate increase for customers scheduled for February. The sale also would save County ratepayers $20 million in stranded costs (investments that the utility cannot recoup immediately because of deregulation), which normally would be passed on to electric customers. MPS officials have said in the past that that money could be used to boost the local economy.

“In talking to our larger customers, they’re looking forward to choosing their own power supply,” said Fred Bustard, MPS vice president.

The County’s primary source of electric power, MPS is connected to the Canadian power grid and not to the other Maine utilities, which are part of the New England power pool. This arrangement could make it difficult for American power producers to reach northern Maine, since they would have to go through New Brunswick and possibly pay high fees for transmission.

The arrangement has worked well for decades with MPS Public able to buy cheap Canadian power from New Brunswick and Quebec, according to Bustard.

But with the Legislature’s decision to deregulate the electric utility industry, state regulators have questioned if deregulation would be good for northern Maine. A final Public Utilities Commission staff report, issued this week, continued to have questions about New Brunswick Power’s involvment in transmitting power to northern Maine. Bustard, reached later Wednesday, had not read the study and offered no comment.

According to Bustard, extending new transmission lines more than 60 miles on the southern end of the MPS system, which would be needed to connect with the New England power pool, would cost as much as $20 million. If the PUC required such construction, the state should foot the bill, Bustard said.

With deregulation coming, Bustard said negotiations have been going on with the New Brunswick provincial government, which owns the power company. At the same time, the Maine utility has been working with state regulators and with Gov. Angus King’s office on the issue.

“We’ve gotten good cooperation from Maine’s government, [and] from the New Brunswick government,” said Bustard. “We’ve gotten excellent cooperation from New Brunswick Power.”

The MPS official said the provincial utility has agreed thus far to raise its transmission, or wheeling, fees no more than the Canadian rate of inflation. Bustard said the utility also may be willing to fix rates contractually.

New Brunswick Power also is prepared to supply backup power if electricity flowing from south to north is interrupted, Bustard said.

What’s left to negotiate is which of the two types of New Brunswick Power wheeling rates will be used to charge the U.S. electric generators, according to the MPS executive. One rate, called a “through rate,” is charged for power transmitted in and out of the system. The other fee charge, 60 percent of the through rate, is charged for tramission of power exported from the province.

Bustard said the preferred rate for wheeling power would be the less expensive one.

The company has formed the Northern Maine Working Group, composed of representatives of MPS, New Brunswick and electric power generators, to work on these issues.

A meeting is scheduled in two weeks with PUC regulators, New Brunswick officials and MPS in Augusta. Any further problems are expected to be addressed at the session, according to MPS officials.

The sale of MPS generating facilities is scheduled be completed in the first quarter of 1999.