Developers of Maine wind transmission line stymied by pace of negotiations with regulators

Developers of a major transmission line that would connect power generated by wind turbines in northern Maine to New England’s grid say further efforts to advance the project are on hold as they wait on state regulators to sign purchase and service agreements.

Douglas Mulvey, vice president of New York-based LS Power, said he’s not sure the Maine Public Utilities Commission will approve the Aroostook Renewable Gateway project unless “amenable contracts” can be negotiated.

“There’s no certainty this is going to happen,” he said in an interview this week, adding that the company and PUC staff have reached an impasse, and the issue is now before commissioners.

Mulvey said “sticking points” have slowed the process, but he would not elaborate.

The PUC has said final transmission service and power purchase agreements for the 140- to 160-mile line were supposed to have been filed by June 30. However, regulators said in a procedural order on Oct. 30 that “significant differences” emerged over key terms of the transmission agreement among the stakeholders, which include: LS Power; Longroad Energy, the Boston developer of the northern Maine wind farm that would generate the electricity; Central Maine Power and Versant; Massachusetts parties that include Eversource Energy, National Grid and Unitil; and PUC staff.

“These differences remain notwithstanding months of discussion, negotiation, and related efforts to resolve them,” regulators said.

Maine has agreed to buy 60% of the energy generated and Massachusetts will purchase 40%.

Jason Niven, director of project development at LS Power, said the company will “pause development efforts” because “there is no real point in continuing to work this … if we can’t even get to a commitment from the state themselves that they want to move forward with this.”

“It’s been long and it’s frustrating on our side to invest as much as we have in the development efforts,” he said.

Niven would not say how much LS Power has spent on development costs, but it has made a major investment to comply with guidelines on where the power line can be routed, meeting with affected communities, developing an economic study, and drafting preliminary engineering and legal work over the past year. That investment will not be recouped if the project does not move forward, Niven said.

Mulvey said the expectation was that a contract would be in place by November 2022. It then shifted to May 2023, “and here we are in November and still haven’t finalized it,” he said. LS Power hopes contracts will be in place early in 2024.

“We think it’s a great project,” Mulvey said. “We think it’s very beneficial for the state. It helps meet the state policy goals for renewable energy and stuff. But in order for all that to happen we have to have a contract and we have to start down this long process of getting all these permits and approvals.”

CMP spokesman Jon Breed said the PUC has directed the utilities to provide comment on the status of the agreement by Dec. 1.

Unitil confirmed that it has been engaged in negotiations with the other Massachusetts electric distribution companies “for a portion of the rights to this project,” but provided no details.

Representatives of Versant Power and Eversource said contract talks are confidential.

A spokesperson for Longroad declined to comment, saying the PUC’s focus is on the transmission agreement, not the wind farm.

PUC spokeswoman Susan Faloon said the issue is “coming up” soon on the agency’s deliberations schedule, “so there is not a lot we can say at this point.”

COMPLEX CONTRACTS

Niven said he believes parties can agree to “the major terms” including costs, schedule, and other factors. But participants must anticipate developments over several decades such as a utility pulling out of the agreement and what the impact would be on the agreement, he said.

Niven called it “lots of low-probability high-impact anticipatory-type conditions that are having to be thought through and worked through” that generate different views about “what’s the right way to address or solve those.”

Mulvey said the contracts are not off the shelf, but they are being negotiated “from scratch” and negotiations are “extremely complex” because they involve five utilities, Longroad, LS Power; and the PUC.

“So that whole process is different in Maine and I think it even might be the first time it’s ever been done nationwide,” he said.

At the outset, the $1 billion transmission line was touted for its goal of bringing clean energy from northern Maine and connecting it to the New England grid to help the region meet its climate goals. And the proposed $2 billion King Pine wind farm would be the largest onshore wind project east of the Mississippi River. Rated at 1,000 megawatts and expected to produce nearly 3.2 billion kilowatt-hours a year, the project could generate enough electricity to power 450,000 typical homes. That’s more than half of Maine’s entire housing inventory.

The transmission’s target starting date is Jan. 1, 2029.

Maine Public Advocate William Harwood said the Longroad and Aroostook projects are dependent on each other.

“Negotiations have got to recognize that both projects will jump off the cliff together,” he said.

Harwood warned that if the project falls through, it could raise “challenges for further regional cooperation” because of Massachusetts’ involvement. Maine voters in 2021 rejected the New England Clean Energy Connect transmission project, later overturned by a Portland jury, that is to be paid for by Massachusetts utility customers.

In addition, because of supply chain bottlenecks and inflationary cost pressures, rebidding the project in the future could be costlier than when electricity generation and transmission bids were initially submitted, Harwood said.

SEEKING TO RELOCATE LINE

The uncertainty has emerged as residents and business owners in some communities in northern and central Maine demand changes to the transmission line’s location. Joshua Kercsmar, an assistant professor in environmental humanities at Unity Environmental University, said he and others don’t necessarily oppose the project, but suggest different routes or bury the line underground.

“It started when landowners were blindsided by letters in early July, informed this out-of-state company is stringing this large system through timberland and farmland,” he said.

Unity residents last week passed a moratorium that allows the town more time to write local ordinances. Many other towns have done the same.

Greg Rossel, of Troy, said landowners worry about towering transmission lines marring their views and others criticize the process used to site the project. He said the opposition should not be dismissed as simply “not in my backyard” hostility.

LS Power says the transmission line routing is constrained by rules against encroachment on highways, near airports, tribal lands, wildlife habitats, and rivers. Rail trails are designated state lands that require a two-thirds vote by the Legislature to allow a transmission line crossing, a nearly insurmountable hurdle.

LS Power has had numerous meetings with residents and municipal officials in northern Maine. But as the project awaits a PUC decision, the company is growing more reticent.

“We haven’t gone silent in terms of discussing the project, but we aren’t willing to provide more information on the project and work up a whole other group of potentially impacted people if this thing isn’t going any further,” Niven said.