Officials: Power pact will benefit region Maine PUC seeks better deal elsewhere

BOSTON – A recent agreement to help spur new electricity-generating plants in New England has left the region better prepared to meet rising demand and avoid rolling blackouts in the next few years, energy officials said Monday.

The head of New England’s power grid manager and the chairman of the Federal Energy Regulatory Commission on Monday credited the agreement for yielding a flurry of new power plant proposals in New England, reversing a sharp drop-off in recent years.

The officials, Gordon van Welie of ISO New England and Joseph Kelliher of FERC, cautioned that many obstacles remain before the plants can go online. But they told a regional energy conference that New England now appears capable of meeting electricity demand over the next few years because of the pact allowing power generators to bid at auctions for the right to build plants.

The pact was reached last fall and approved in June by FERC, despite opposition from officials including the attorneys general in Massachusetts and Connecticut, who objected to the expected rate increases the plan would yield.

In Maine, the Public Utilities Commission voted a week after the pact was approved to explore alternatives to the New England-wide power supply system in an effort to lower the state’s electric rates. PUC officials say the agreement will result in higher energy prices in Maine at a time when the state has a surplus of power.

The agreement “speaks volumes about the region because those were hard calls. And there are costs associated with ensuring adequate electricity supply in the region,” Kelliher, who was named FERC’s chairman by President Bush last year, told reporters before delivering a speech at the conference organized by ISO New England. Van Welie, president and CEO of ISO New England, said his Holyoke-based nonprofit corporation has received applications for more than 35 new generation projects since the middle of last year, when it was clear a settlement would be reached to adopt the so-called “Forward Capacity Market.”

“Obviously, the market signals are working,” van Welie said.

The majority of the proposed plants are in Massachusetts and Connecticut – the most populous of New England’s six states, with the greatest need for new resources. However, van Welie cautioned the proposals must meet permitting requirements and overcome likely political resistance. He cited long delays that have held up Massachusetts’ Cape Wind wind-energy project off Nantucket and proposals for new transmission lines in Connecticut.