Monday, October 12, 2009

PUC OKs First Wind contract to supply CMP, Bangor Hydro

By Nick Sambides Jr.
BDN Staff

A subsidiary of the state’s largest wind power manufacturer will get Maine’s first long-term electricity supply contract for its proposed 60-megawatt Rollins Mountain project in Penobscot County, officials said this week.

The Maine Public Utilities Commission unanimously approved awarding the 20-year contract to First Wind Holding LLC, a wholly owned subsidiary of Evergreen Wind Power III LLC, on Wednesday, state officials said.

While a state permit allowing construction of the project, which has yet to attract investors, has been appealed by a group opposing the wind farm, proponents are optimistic that the contract will help secure investors in the project.

“This is good news for ratepayers and renewable energy development in Maine,” commission Chairwoman Sharon Reishus said in a statement.

“The First Wind contract makes it possible for Maine ratepayers to gain energy supply cost benefits from a renewable energy resource, and the company gets the financial assurance the contract provides to become fully operational,” Reishus added.

The contract is the first long-term deal approved since the state restructured its electric utilities in 2000. The state Legislature gave the commission authority in 2006 to create long-term electric generation contracts in order to bring cost benefits to Maine ratepayers, officials said.

Those contracts were supposed to lower electricity supply costs for Maine consumers, increase renewable capacity, hedge against market prices of electricity, offset costs resulting from new transmission and provide a lower cost alternative to new transmission investment.

The commission directed Central Maine Power Co. and Bangor Hydro-Electric Co. to share the contract in an 80-20 split with CMP securing the larger portion, officials said. The decision will be final with completion of the written order.

While First Wind has been awarded the contract, a state permit allowing the Rollins Wind project — a proposed 40-turbine, $130 million industrial wind site for the Rollins Mountain ridgelines in Burlington, Lee, Lincoln and Winn — is being appealed in Superior Court by the Friends of Lincoln Lakes, a residents’ group.

Moreover, the project lacks an investor to pay for its construction. The project has no set construction or start-up date and might not occur at all if the Friends group wins its appeal, said John Lamontagne, First Wind’s spokesman.

“The contract is triggered by the commissioning of the project,” Lamontagne said Wednesday.

However, the securing of the contract will help First Wind draw investors to the project, he said.

“It allows us to secure project financing because of the certainty of the sale of the power once the project is built,” Lamontagne said.

The Maine Department of Environmental Protection issued First Wind of Massachusetts a permit for the Rollins Mountain project in April. Individual towns and the U.S. Army Corps of Engineers have also issued permits.

Proponents have praised First Wind as a conscientious creator of wind power, saying the Lincoln Lakes project would create as much as 60 megawatts of pollution-free electricity in peak winds.

The Friends group contends that the turbines would lower land values and threaten human and animal health with light flicker and low-decibel sound, disrupt the pastoral nature of Rollins and typically generate a fraction of their capacity.

The group argued its case to the DEP, but the agency largely dismissed the complaints for lack of evidence.

It would typically take nine months to a year to build a project like the one proposed for Rollins Mountain, Lamontagne said.

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