Wind investors need stable policies

Spanish power utility Iberdrola SA is investing $10 billion in wind power and energy-related projects across the U.S. over the next few years, but political and regulatory uncertainties could stall future investments, the company's chairman and CEO said.

Ignacio Galan, who is in New England for the groundbreaking of a major power grid upgrade in Maine, said wind energy projects have created thousands of jobs in the U.S., and renewable energy companies will continue making long-term investments if they get stability from regulators.

"The industry can't move forward without predictability," Galan told The Associated Press.

To continue to grow, Iberdrola needs to know whether federal grants for renewable energy will be extended beyond 2012, and whether the government will establish targets for renewable energy that will help companies like Iberdrola plan for future investments, Galan said.

A climate bill remained stalled in Congress and future spending on renewable energy remains in doubt.

Iberdrola, the nation's second-largest wind power company, plans to spend $6.7 billion on wind power projects in the U.S. through 2012.

Iberdrola currently has 4,163 megawatts of wind power installed in the U.S. — taking into account wind's variability, that's enough to light about 1.2 million homes — and there are 25,000 megawatts of additional wind projects in the pipeline, Galan said.

In the U.S., Iberdrola's wind power projects are run through Oregon-based Iberdrola Renewables. Transmission companies like Central Maine Power are part of Iberdrola USA. Combined, Iberdrola employs 7,000 people in the U.S.

Galan was joined by Maine Gov. John Baldacci and officials from Central Maine Power for the formal groundbreaking on a $1.4 billion power grid upgrade aimed at ensuring future reliability, while also opening the door to future wind power projects.

CMP plans to double the capacity of the grid's backbone in Maine with a new transmission line from Orrington to Eliot. All told, the Maine improvements include 500 miles of new and upgraded high-voltage lines, as well as five new substations.

Iberdrola will pay for the improvements, about half with cash and the rest through borrowing. The money will be recouped from New England electric ratepayers.

The project will allow more electricity to flow from Canada into New England, and beef up the power grid in Maine to accommodate wind farms that might be built in the future. It also will create up to 3,000 construction jobs, Galan said.

CMP is also preparing to provide 620,000 so-called smart meters to customers by early 2012, taking a first step toward a smart grid by allowing consumers to monitor their power consumption. The system will allow CMP to eliminate meter readers and to better monitor power outages.

Using wireless communication, smart meters will allow CMP to monitor problems from its headquarters and will provide line workers with more information when they're dispatched. The $200 million cost is being equally shared by Iberdrola and the federal government.

Iberdrola and CMP officials believe the combination of smart grid technology and wind power make the state an ideal place for a pilot program for future technologies.

"Maine is a place where you have a scale to experiment and see what works," said John Carroll, a CMP spokesman.