Central Maine Power says its substation off Two Rod Road in Scarborough isn’t equipped to handle the wave of proposed solar projects, but the company’s executive chairman told lawmakers Thursday that many substations will need no upgrades and at those that do, the cost will likely be $175,000 to $300,000 each. Derek Davis/Staff Photographer

Under fire for angering the state’s solar energy industry, Central Maine Power Co. blamed the situation on a failure to run its engineers’ cost estimates up the corporate chain.

David Flanagan, the company’s executive chairman, told state lawmakers Thursday that multimillion-dollar cost estimates for needed grid upgrades were issued to solar developers by midlevel engineers who didn’t run their numbers past senior engineers or company managers.

Flanagan told a legislative committee that the initial estimates of the amount and cost of work needed to allow the substations to accept power generated by solar projects were “simply not a practical solution,” and CMP has since said the costs have been adjusted downward.

The Press Herald published a story about the controversy last week and on Monday Gov. Janet Mills sent a letter to the Maine Public Utilities Commission requesting it investigate CMP’s connection problems and why the company belatedly told solar developers of the need for costly upgrades.

Some of the stations needed upgrades initially estimated at millions of dollars to allow solar energy developers to feed their electricity into the grid, Flanagan told the Energy, Utilities and Technology Committee. But after the uproar over the high estimates, the company reviewed those numbers and determined that many of the substations will require no upgrades and of those that do, the cost will likely be $175,000 to $300,000 each, Flanagan said, adding that a few will require more complex upgrades costing between $500,000 and $750,000.

The total estimate for the upgrades needed for dozens of solar projects has changed “from hundreds of millions of dollars and many years” of work to “a figure that is not greater than $40 million and in all likelihood will be significantly less than that,” Flanagan told the committee.

Many members of the committee seemed to accept Flanagan’s explanation of how and why the initial estimates were sent out, but Rep. Seth Berry, D-Bowdoinham, said it appeared the company was “caught, again, with its hand in the cookie jar.”

Berry, a leading critic of CMP who has proposed a consumer-owned power utility, was referring to past controversies over the reliability of the company’s electric supply and the botched rollout of a new billing system that resulted in sharply higher bills for some customers and no bills at all for others.

Berry said he’s concerned that CMP might be scaling back the amount of work that needs to be done to the substations to calm the controversy, but may seek a rate increase down the line to pay for the work.

“We have no guarantee that the company won’t later seek to make these improvements at the expense of the ratepayers rather than developers,” he said. “There’s a real conundrum there.”

Developers of solar energy projects protested loudly after some received the initial estimates, saying the costs – which would be passed on to them – put the viability of their projects at risk.

Mills and solar energy developers asked the PUC to investigate how and why CMP initially issued huge estimates for the work needed and then backtracked to less costly numbers.

Flanagan said the company’s management didn’t review the initial estimates because CMP has been “overwhelmed” by dozens of solar energy projects proposed in Maine. He said the projects, if all are developed, will generate more than 2,000 megawatts of electricity, more than the current peak demand from its customers.

He said that CMP had to review just one or two “interconnection requests” from solar energy developers in 2019, but that number rose to about 600 last year. Flanagan said the state is attractive to solar power developers due to changes in state laws and policies to encourage a shift away from oil and gas to renewable energy, such as solar.

Flanagan said the company would cooperate fully with the anticipated PUC investigation.

Some of the companies developing the projects already had signed contracts with CMP and with customers. In a few cases, they had already completed construction when they got the higher estimates for connection costs. They questioned how they were supposed to get additional investments to cover the high cost that CMP was requesting to connect their projects to the grid.

Flanagan said top managers recognized after the fact that the higher estimates “would be an impossible barrier” for solar power developers, and that the company was sending out letters this week with the new, lower estimates.

Michelle Carpenter of Turning Point Energy said the connection costs are usually only a minor consideration for solar developers, generally running around $50,000. But CMP, she said, seemed to be “adding new items to the scope that weren’t exactly part of the scope” of projects to prepare substations – which typically send out electricity from larger transmission lines to end users – to also take in electricity generated by the solar projects.

She said her company has about a dozen projects in the state and, in the past, has worked well with CMP.

“I do genuinely think it was a mistake,” she said of CMP’s initial estimates. “It was a very large one.”

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