November 07, 2024
Editorial

ELECTRICITY ACTION NEEDED

Despite the pressing budget concerns that will occupy most of its time and energy, the Legislature must act this session on a short-term opportunity to restructure Maine’s relationship with the electricity grid. Putting off a decision for further study or further reflection by legislators would have serious deleterious implications for Maine businesses, and would cost residential users more money.

Last month the Maine Public Utilities Commission delivered a report to the Legislature analyzing the risks and benefits of three options for restructuring the electricity system. PUC Chairman Kurt Adams and his staff concluded that the status quo, with Maine a disproportionately large supplier and small user within the ISO New England power grid, is inherently unfair to Maine ratepayers.

A lot is at stake with the decision. The options laid out in the PUC report suggest ways for Maine to be in the driver’s seat in the effort to at least contain rates, if not actually reduce them. Changing the arrangement would also, the PUC argues, encourage generators to locate in Maine, which in turn would bring new business here.

The first option the state could take is renegotiating an arrangement with ISO New England that is more favorable to Maine, something it has been unable to do so far. Though the greatest demand for electricity is in southern New England, Maine has substantial electricity production capacity, and the potential to produce more electricity through wind, and perhaps tidal power. Maine is also a conduit to southern New England for electricity produced in Quebec, New Brunswick and Labrador, which puts it in a strong position as a gatekeeper. The second option would have Maine acting as an independent entity, and the third would have it joining with New Brunswick. The PUC does not take a position on the options.

A loose coalition of large electricity users, calling itself Energy Matters to Maine, is working to nudge the Legislature toward action. One of its members, Keith Van Scotter, president and CEO of Lincoln Paper and Tissue, said recently that in three years the mill’s electric bills have doubled, from $500,000 to $1 million each month. Electricity rates in New England are higher than anywhere else in the U.S., so Mr. Van Scotter believes his business and others in the state are at a competitive disadvantage to mills and other high electricity users located in other states.

The Energy Matters group also wants the state to actively work to site an LNG terminal in Maine. Two-thirds of electricity generated in New England comes from natural gas-fired plants. Asking the state to intervene in a complex regulatory battle among three would-be LNG developers is a problem, but the lobbying group’s point is well taken: The state needs to be aggressive in determining Maine’s energy future because it is so closely tied to its economic future.

With the PUC having done much of the heavy lifting by analyzing the options beyond the current arrangement with ISO New England, the Legislature should be able to act before its session ends. If a decision is delayed, a major transmission line may be built – three are under consideration – linking Maine and Canadian provinces with southern New England, locking in the status quo and leaving Maine ratepayers on the hook for the bill.


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