Maine: Wind Energy and Republicans: Slamming The Door!

Breathtaking!

Republicans marching in lockstep with ignorance.....

Wednesday, July 3, 2013

Energy company halts Maine offshore wind project, citing uncertainty

By Steve Mistler smistler@pressherald.com
Staff Writer

 

AUGUSTA — The Norwegian company that has proposed a $120 million offshore wind pilot project off the Maine coast is now putting the project on hold, a move prompted by a last-minute political maneuver to pass a sweeping energy bill.

click image to enlarge

Norwegian company Statoil had planned to install floating wind turbines off Boothbay Harbor that would be similar to this Hywind test turbine, now producing power off Norway.

Trude Refsahl / Statoil

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Read Statoil's letter to the Maine Public Utilities Commission

 

The multinational oil and gas company Statoil notified the Public Utilities Commission on Wednesday that it is halting development of Hywind Maine, a commercial-scale, floating wind turbine park targeted for waters off Boothbay Harbor. In his letter to the commission, Statoil Vice President Joahnnes Nordli cited risks and uncertainty associated with the late passage of a bill that reopened the bidding process to establish electricity rates should the project be completed.

Democratic leaders said the bill, L.D. 1472, was couched as a deal to benefit the University of Maine, but reneged on a deal ratified in January when the commission voted 2-1 to approve Statoil’s rate proposal in a term agreement.

On Wednesday, Senate President Justin Alfond said the bill was “politics at its worst” and that it risked the state losing its position to become a leader in offshore wind energy.

“This is a very sad day for the state of Maine,” said Senate President Justin Alfond, D-Portland.

The LePage administration, which has been critical of the Statoil deal, countered that the company had already announced that it was delaying the project for another year, from 2014 to 2015, while it waited to see if it won a $50 million grant from the U.S. Department of Energy.

Patrick Woodcock, the governor’s energy director, said Wednesday that the letter to the Public Utilities Commission raised other questions about Statoil.

“If they (Statoil) are so willing to jettison this project ... was this the best partner in developing an offshore wind industry in Maine?” Woodcock said.

Statoil, meanwhile, said the passage of L.D. 1472 was the reason it is suspending the project. Nordli wrote that the company could not “continue to spend its resources on this project without certainty” that its rate contract – already ratified by the Public Utilities Commission – will be finalized.

Under the new law, that won’t happen until after the University of Maine submits its bid in September. In the interim, supporters of the Statoil project worry the company will take its project to another location – an outcome Nordli referenced in his letter to the commission.

Meanwhile, Democratic leaders placed the blame squarely on the political wrangling by the LePage administration.

Gov. Paul LePage vetoed the omnibus energy bill in an effort to squeeze a key concession: The reopening of the bids for the rate agreement associated with the offshore wind pilot project. The governor has repeatedly argued that Statoil’s rates ratified by the Public Utilities Commission in January were too high. He later argued that the University of Maine should be allowed to bid for the offshore wind project.

The university did not submit a bid three years ago when the Public Utilities Commission was collecting proposals.

Several Democrats believe that the governor’s advocacy for the university in the offshore wind project was motivated more by his opposition to wind energy. LePage frequently argues that wind energy is too expensive. In 2012 he rejected a $20 million bond for offshore wind research and development that would have benefitted the university.

The university became a wedge issue in the debate over the omnibus energy bill, putting state lawmakers in the position of appearing to support a foreign oil company over the state's public university.

Alfond said Wednesday that Republicans in the Senate would have blocked the omnibus energy bill if L.D. 1472 wasn’t amended as LePage wanted.

“We ran out of options,” said Alfond, who voted against L.D. 1472, but saw several Democrats sided with Republicans in an effort to ensure passage of the energy proposal.

Lawmakers finalized the deal late June 27, passing L.D. 1472 and the omnibus bill the same evening. After L.D. 1472 was passed, the governor wrote a letter urging the Senate to override his veto. It did so unanimously. The next day Republican senators wearing University of Maine ties posed for pictures in the Senate chamber.

Democratic leaders said the bill was a poison pill for Statoil.

“(L.D. 1472) made no business sense at all for our state,” Alfond said. “It sends a terrible signal to the rest of the country and world that Maine was changing the rules of the game mid-stream. Unfortunately, some of our worst fears have come true and it came true this morning.”

Alfond said that he and Sen. Seth Goodall, D-Richmond, were contacted by Statoil on Wednesday morning.

Nordli, in his letter to Public Utilities Commission, said Statoil would re-evaluate the project this fall.

Woodcock said the governor had several concerns about the Statoil contract, including its rate agreement and the “lack of the tangible benefit.” He said the contract was loaded with “intentions, but no specifics” for job creation.

Woodcock has also argued that UMaine's project wasn't ready to bid two years ago, when Statoil presented its project for the PUC's review, as required by the Ocean Energy Act.

He said giving UMaine's project another opportunity is good for Maine ratepayers because it creates competition between two different technologies and perhaps lower rates for offshore wind power.

Alfond said that Democrats attempted to further amend the energy bill so that Statoil and the university could partner on the project, but that each proposal was rejected by the LePage administration and Senate Republicans. The bill contained language that would allow the university to bid for the project if Statoil decided against doing do.

Many feared that reopening the bid would deal a significant blow to the state’s offshore wind industry. In emails provided to lawmakers after the governor’s veto, several in the energy industry worried that the state could lose an opportunity to become a pioneer if Statoil leaves.

“It is a dangerous game getting in bed (with LePage),” wrote Stephen Von Vogt, president of Maine Marine Composites. “He is no fan of offshore wind or the university for that matter. If they undo the (contract with Statoil), it may never be redone, with the university or anyone else.”

Kathleen Redmond-Miller, Statoil’s project manager for the Hywind project, wrote that the university is already positioned to provide a “crucial research role” in Hywind, but could lose that opportunity if Statoil pulls out.

“This decision would slam the door shut on a $120 million investment in Maine and it would also send the signal to the global development community that Maine is not open for business for renewable energy development.”

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