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Maine's Proposed Withdrawal from ISO New England Ill-conceived, Says Group of Energy Generators and Suppliers
WASHINGTON, D.C. - A consortium of competitive power generators and suppliers that serve most of Maine's power needs yesterday filed joint written testimony with the Maine Public Utility Commission (PUC) requesting that Maine utilities remain in ISO New England (ISO-NE) and that the PUC instead attempt to modify relevant rules and tariff provisions to address their specific concerns. The Consortium of Energy Generators and Suppliers said remaining in ISO-NE would seem to have the highest likelihood of containing cost and risk exposure for Maine consumers as well as allowing higher levels of renewable energy development in Maine.
"Despite the challenges of increased fuel, labor and construction input costs, competitive suppliers in New England continue to make investments in developing the necessary infrastructure to provide efficient, environmentally responsible and reliable power to consumers. We believe that these and climate change challenges can best be met through Maine's continued participation in ISO-NE's well-functioning competitive wholesale electric market. Being part of this larger energy supply structure provides Maine with greater fuel diversity, enhanced ability to achieve its targeted environmental goals and the tools to reliably weather the imbalances of supply and demand that occur in the electric industry," said John E. Shelk, president and CEO of EPSA.
In separate written testimony presented on behalf of the Consortium, economist Roy J. Shanker stated that, "[C]ombined with other increased costs resulting from Maines withdrawal from ISO-NE, it would appear that at every turn,exiting ISO-NE is an inferior option to the status quoThe region as a whole suffers, Maine is worse off, social and environmental initiatives are impaired, new business and power development in the state is discouraged, legacy sunk costs remain, retail access is adversely impacted, and the potential for integrating northern Maine as well as general transmission expansion is greatly reduced." In articulating this position, the group noted its general support for the findings of the Maine utilities' respective expert witnesses in this proceeding, who reached similar conclusions regarding the increased costs and risks associated with Maine utilities withdrawing from ISO-NE.
Angela O'Connor, president of the New England Power Generators Association (NEPGA), said, "In New England, we lead the nation in minimizing the environmental impacts of electricity generation and Maine's participation in ISO-NE both benefits and contributes to that notable accomplishment. Furthermore it provides tremendous economic, reliability and environmental benefits and assists Maine in meeting the challenges of increased energy costs, electric reliability and addressing global climate change. The challenge moving forward is to meet the continuous increase in electric demand without eroding the benefits of recent technological innovations or compromising our economic viability, and that challenge can most effectively be met through the innovations in energy technologies that have been introduced by the regional competitive markets."
The Electric Power Supply Association (EPSA) and the NEPGA also filed joint comments with the Maine PUC highlighting a number of key points from the testimony. The testimony and comments were submitted as part of a continuing inquiry that began in June 2006 when the Maine Legislature's Joint Committee on Utilities and Energy asked the PUC to produce findings and recommendations on the costs and benefits of continued participation in ISO-NE by Central Maine Power Company (CMP) and Bangor Hydro-Electric (BHE). Withdrawal from ISO-NE is among the options investigated.
In its testimony, the group pointed out that if Maine were to leave ISO-NE, commitment, operating reserves, dispatch, energy and collectively all operating elements would likely be more expensive for the region as a whole, and Maine as well. For example, the Consortium said that planning elements such as maintenance and adequacy/capacity requirements would increase in costs both regionally and for Maine. "It would appear that Maine would lose the benefit of the socialized cost allocation for new pool transmission facilities and/or face the proposition of not developing some of the current projects such as the Maine Power Connection ("MPC") and the Maine Power Reliability Project ("MPRP")," the group said.
The group also cited in their testimony the potential adverse impacts of exiting ISO-NE on wind development. One such issue is the loss of potential socialization of new transmission costs needed to export such new wind power, which in turn makes the development of such transmission much more difficult.
Members of the Consortium of Energy Generators and Suppliers are FPL Energy Maine, Inc.; Constellation Energy Resources, LLC; Independent Energy Producers of Maine (IEPM); EPSA; NEPGA; Dynegy Inc.; and Rumford Power Inc.
PR - 30 Constortium testimony by Ray Shanker
PR 30- Joint comments on Maine and ISO-NE
CONTACT: JOHN SHELK
(202) 349-0154or 703-472-8660
EPSA is the national trade association representing competitive power suppliers, including generators and marketers. These suppliers, who account for nearly 40 percent of the installed generating capacity in the United States, provide reliable and competitively priced electricity from environmentally responsible facilities serving global power markets. EPSA seeks to bring the benefits of competition to all power customers.