Two energy proposals boost Maine's power position

- A projected electricity shortage in eastern Canada is presenting an opportunity for Maine to sell surplus power to the Maritimes, creating new revenue for the state's power-generating stations.

Several hurdles still exist, but the expected Canadian shortfall could help re-start idled Maine plants that burn wood waste and mean additional output from existing generators. It also could provide a ready market for wind turbines proposed for Maine, including a $68 million project at Mars Hill in Aroostook County.

New England utilities have been buying Canadian power for years, especially in the summer, when air conditioning use in the region is high. And until now, Canada could meet its own winter heating demands without importing power from Maine.

Now that's changing. And beyond the opportunities for Maine, energy planners see the potential to create a more efficient, reliable transmission grid that allows more power to flow between New England and eastern Canada.

Energy officials from neighboring New Brunswick have been meeting recently with their counterparts in Maine to express their interest in a new transmission line between the province and the state, to handle the extra power that will be needed in the Maritimes later this decade.

"My world sees more power coming from the south," said Bill Thompson, New Brunswick's deputy energy minister. "You have it available."

It's less expensive for the province to buy electricity from Maine in the winter, Thompson said, than to build major new power plants in New Brunswick. At the same time, the provincial government wants to increase the share of power coming from renewable resources. That may open a new market for Maine generators that use water and wood waste, as well as the proposed wind turbines.

"If there's a big wind farm in Maine," Thompson said, "that's to our benefit."

Perhaps the biggest obstacle to this cross-border energy exchange is the lack of transmission capacity connecting Maine and New Brunswick. The existing line is 30 years old and too small to handle more power.

Long-standing attempts by Bangor Hydro-Electric Co. to build an 84-mile transmission line from Orrington to New Brunswick fell apart last year, following opposition from environmental groups over the proposed route through undeveloped forest. Now Bangor Hydro, which is a subsidiary of a Nova Scotia based energy company - Emera, Inc. - has revived its plans.

The utility is working with landowners, regulators and environmentalists to find an acceptable route and secure financing for the $85 million project. It hopes to announce a decision this summer and complete the line by 2006.

This second connection could provide a new outlet for Maine's electric generators.

Maine has more than 3,500 megawatts of generating capacity, enough power to run more than 3 million homes. The state needs only around 2,100 mw to meet its peak needs.

That leaves 1,400 mw that can be exported. The most obvious market is southern New England, but bottlenecks on the transmission line between Maine and New Hampshire have limited the amount of energy Maine can ship south. So the prospect of new customers to the north is appealing to state officials and plant owners.

New Brunswick has roughly the same amount of generating capacity as Maine, but two key events are threatening some of that output.

One involves the Point Lepreau nuclear power plant. The 635-megawatt reactor has provided 30 percent of the electricity used in the province since it went on line in 1983. The plant's owner, New Brunswick Power, wants to extend the station's life with a multimillion-dollar retrofit that will take Point Lepreau out of service for 18 months, beginning in 2007.

The second event is a plan by NB Power to convert a 1,000 mw oil-fired plant near St. John to a lower-cost fuel called Orimulsion, a mix of bitumen and water. Orimulsion, however, is produced only in Venezuela.

NB Power spent hundreds of millions of dollars for the upgrade of its Coleson Cove plant, but Venezuela recently backed out of the supply deal. The utility has launched a $2 billion lawsuit, trying to recover the cost of the conversion and extra fuel expenses.

In the past, New Brunswick could count on Quebec for extra electricity. But Quebec's surplus is drying up, and the province wants that power at home now.

These and other supply problems mean New Brunswick will be short 170 mw of capacity in the winter of 2007-2008, according to Thompson. Nova Scotia and Prince Edward Island, which are hooked to New Brunswick through a regional power grid, also face tight winter supplies. These shortfalls present opportunities for Maine.

One interest group that's looking for opportunities is the Independent Energy Producers of Maine.

Developers invested $2 billion in Maine in the 1980s and 1990s, building biomass plants and refurbishing hydro dams. They created hundreds of jobs in the process.

But the industry has been hit hard by price competition under utility deregulation. Of the dozen biomass plants scattered around rural Maine, only seven are operating, and most of them only on a month-to-month basis. This has greatly reduced the need for loggers, truckers and other workers who formerly supplied waste wood to these plants. If the plants ran more frequently, some of those jobs could come back.

"We're watching it cautiously, in hopes that new markets could open for us," said Dave Wilby, the group's executive director.

The energy from these plants has tended to be more expensive than the new fleet of natural-gas fired generators in New England. But Wilby and others say that agreements between the New England governors and eastern Canadian premiers to combat global climate change, and Canada's ratification of the United Nations Kyoto Protocol to cut emission levels, may level the playing field. It will expand the market in Canada for cleaner energy, despite the price differences.

"If they're interested in buying renewable power from Maine," Wilby said, "we're open for business."

New generators also could benefit, including a wind farm planned for Mars Hill in Aroostook County. The project, by Evergreen Wind Power LLC, would feature 33 turbines and generate up to 50 mw.

Better transmission ties between Maine and New Brunswick could open the door for other energy projects and more power supply options in northern Maine. Currently, the 35,000 homes and businesses served by Maine Public Service in Presque Isle are connected through New Brunswick. The area has no direct tie to the New England power grid.

These issues are among those being discussed by state officials who have met with their counterparts and utility representatives from New Brunswick.

Tom Welch, chair of the Maine Public Utilities Commission, said a new connection between Maine and New Brunswick would be very useful for both regions. It would allow Maine to send surplus power north in the winter, when it's needed in the Maritimes. And it would let Maritime generators ship energy to southern New England in the summer, when demand peaks. The net effect, Welch said, is that fewer new power plants would be needed in New England and eastern Canada.

Better integration of the Maine and New England power grids also would boost the overall reliability of the regional transmission system, Welch and others said. Last summer's record blackout, which hit customers from the Midwest to the Northeast, has underscored the need to upgrade electric links and have redundant connections.

A larger system also could be good for New England's air quality and electric costs, according to Tony Buxton, a Maine lawyer and energy expert who is working with Bangor Hydro on its transmission line proposal. In the summer, Buxton said, the region calls on expensive, inefficient oil and coal generation to help meet peak demand. There would be less need for these plants if more power could come from Canada in the summer.

Because New England and the Maritimes power grids are separately regulated in their respective countries, Buxton said, they won't be joined in a legal fashion. But both sides increasingly see the benefits of combining the power systems on an economic basis.

"Finally," he said, "this barrier between the two nations is breaking down."