Dive Brief:

• The Maine Public Utilities Commission Tuesday unanimously approved a 1,000-MW wind farm to be built by Longroad Energy and a 345-kV transmission line planned by LS Power to deliver electricity from the project to ISO New England.

• With Massachusetts utilities preparing to buy up to 40% of the wind farm’s output and similar capacity on the power line, Maine ratepayers will pay about $1 billion for the projects, with a typical residential ratepayer seeing a $1 per month increase in their bills over 10 years, according to Philip Bartlett II, commission chair.

• The proposed projects raise broad concerns about how to equitably pay for the transition from fossil fuels, PUC Commissioner Patrick Scully said, noting that transmission and distribution costs are expected to increase as Maine electrifies its buildings and vehicles.

Dive Insight:

The PUC in late October approved term sheets for the projects, but decided to wait to see whether Massachusetts would share their costs before finding they were in the public interest.

After reviewing the term sheets, the Massachusetts Department of Energy Resources on Dec. 30 directed the state’s investor-owned utilities to enter into long-term contracts with Longroad Energy and LS Power.

Among the projects’ benefits, they will bolster wintertime energy security by increasing energy production in the season, the DOER said. “This will displace fossil fuel resources during periods of constrained natural gas supply in the ISO NE region in the winter,” the department said.

The projects will put downward pressure on electricity prices and are key to achieving climate goals in Maine and New England, according to Bartlett.

The PUC directed Longroad Energy and LS Power to seek additional off-take agreements for the projects and to explore federal funding. It ordered Central Maine Power and Versant Power, Avangrid and ENMAX subsidiaries, respectively, to enter into long-term contracts for energy from the wind farm and transmission service from the power line.

The projects grew out of state law LD 1710, which aimed to spur renewable energy development in northern Maine.

LS Power expects to start operating its planned double-circuit transmission line in June 2028, according to a redacted term sheet for a transmission service agreement approved by the PUC. The line will be designed to handle 1,200 MW.

Longroad Energy expects its roughly $2 billion wind farm will produce about 3.2 million MWh a year, according to its redacted term sheet. Maine used about 11.7 million MWh in 2019, according to the Maine Governor’s Energy Office.

The company expects to build the King Pine wind farm in stages, with construction planned to begin in 2026. Longroad Energy anticipates power to begin flowing from the project by late 2028.

The Natural Resources Council of Maine supported the decision.

“Infusing our electric grid with wind energy sourced from Aroostook County is an economic boost to local communities, a win for New England electricity consumers and a promising example of regional collaboration on our energy future,” Jack Shapiro, climate and clean energy director for the environmental group, said in a statement.

Scully agreed the projects provide benefits to Maine, including energy pricing that is “very competitive.”

However, Scully warned that legislative mandates for clean energy may impose cumulative costs on ratepayers.

“We should be very cautious about adding additional costs by using electricity rates to fund public policy programs,” he said. “Individual procurements when looked at in isolation may have reasonable costs. But when all such programs are considered together, the combined costs are very high.”

The Maine legislature should consider funding energy investments using general funds or bonds, Scully said.

Funding clean energy programs through electricity rates imposes a burden on low- and moderate-income and fixed-income residents, he said.

David Littell, a Bernstein, Shur, Sawyer & Nelson attorney and former Maine PUC commissioner, cautioned that the scope of the transmission agreement and wind farm exceeds anything the PUC has done before.

“Maine ratepayers could benefit from long-term cost reductions if the contracts are set up carefully enough,” he said in an email. “But protecting Maine ratepayers from this commitment, the Aqua Ventus offshore wind project and other commitments in terms of costs is a real concern – the costs for these projects cumulatively will be in the multiple billions.”