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Maine Offshore Wind Pilot Project Clears PUC Hurdle
01/14/2014   Reported By: Keith Shortall

Maine utility regulators have given a key approval to the University of Maine and its partner companies' proposal to build a 12-megawatt pilot wind project off Maine's coast. As Keith Shortall reports, the developers hope that it's another step toward the realization of a much larger offshore wind industry that could deliver hundreds of megawatts of power at competitive rates.

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Maine Aqua Ventus Project Clears PUC Hurdle Listen

By a vote of a 2-1, the Maine Public Utilities Commission approved the terms of an agreement between the state and a consortium known as Maine Aqua Ventus that clears the first major hurdle in the effort to build two turbines off Monhegan Island.

Maine PUC Chair Tom Welch was one of the two commissioners to approve the so-called "Term Sheet" for the project, which sets a price at which the developers would be able to sell power to customers of Central Maine Power. During deliberations, Welch explained that he believes the pilot project itself meets conditions laid out in state law.

"My overall conclusion is that the net cost to the state, even of the pilot, even if nothing further happens, is within the parameters of the statute," Welch said. "And I think there is some opportunity - and a plausible opportunity, if not a certain opportunity - for greater benefits from a larger project."

The pilot project is expected to generate enough power for as many as 7,000 Maine homes, but at a higher cost per unit than other sources. That cost will be subsidized by ratepayers, at roughly $9 more a year on their utility bills.

But the commission concluded that short- and long-term benefits, including the creation of jobs and the development of new technologies, are worth the higher price, under guidelines laid out in the so-called "Ocean Energy Act."

The lone dissenter on the panel questioned the real economic returns of the project. Commissioner Mark Vannoy says its future success depends on private sector investment - although he did acknowledge the benefits of technology research and development.

"I don't disagree with that and in my actions here I'm not disagreeing with that," Vannoy said. "But I would point to the difference between applied development and general research, and if you look at the Department of Energy and the Congressional Budget Office's evaluations of the Department of Energy, you find that in demonstration projects and applied projects, there's a lot of financial failure."

Welch says he understands Vannoy's concerns about projecting the future success of a full-scale version of the wind farm, but says he still believes the Aqua Ventus Project conforms to parameters intended by the Legislature.

"I certainly agree with Commissioner Vannoy that there are significant risks relating to that, and it may not even be the most probable outcome," Welch said. "But I actually think the legislation is pretty clear that they would like the commission to take a certain amount of risk in this area."

UMaine's vice president of innovation and economic development, Jake Ward, says he's pleased by the PUC's ruling, which allows Maine Aqua Ventus to compete for a $46 million grant from the federal Department of Energy. Securing that funding would allow the developers to complete its design and engineering.

"Once we're at the 100 percent design, then we can start looking at the whole construction process, and construction and installation and operation," Ward says. "And the Department of Energy has a schedule that would predict that we could be in the water and operating by the end of 2017."

Ward says he expects to hear back from the DOE on the grant proposal in May. The PUC vote comes nearly a year after the panel gave initial approval to Norwegian energy giant Statoil's proposal for an offshore wind project. Statoil withdrew that proposal after Republican Gov. Paul LePage's administration intervened in the bidding process.


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