Maine is likely to wait until midyear to see whether talk, rather than action, can lower electricity transmission rates for the state's businesses and homes.
Key lawmakers appear willing to give a ruling by the Maine Public Utilities Commission time to play out. Late last week, the commission ordered Maine's two largest utilities to try to negotiate a better deal with the operator of the regional electricity transmission system, ISO-New England, before renewing a long-term agreement to stay in the grid.
A full report on the PUC decision will be given to the Legislature by Thursday.
New England has the highest electric rates in the continental United States – nearly 16 cents per kilowatt hour, compared with the national average of 10 cents. Maine's average rate is nearly 14 cents, according to federal energy figures. High-priced natural gas is one reason, but the cost of transmitting the power around the region, which makes up 8 percent to 12 percent of an average Maine bill, contributes to the burden.
Maine officials have become increasingly frustrated with the way ISO-NE controls and allocates those costs. The PUC determined, for instance, that construction cost overruns have exceeded $4 billion in the region since 2004.
In 2006, that frustration led Gov. John Baldacci to ask the PUC to study the pros and cons of having Maine withdraw from the grid.
An interim report last year came up with three options: Maine could form its own transmission system; leave ISO-NE and join with eastern Canada; or work with ISO-NE to fix the existing arrangements.
Last Thursday, the PUC chose measured reform over radical change.
The current transmission agreement between Central Maine Power Co., Bangor Hydro-Electric Co. and the grid operator expires in February 2010. The PUC told the companies to negotiate a new deal that provides more consumer input, splits transmission investments more fairly and controls cost overruns. It wants a progress report early this summer.
To put some muscle behind the request, the PUC warned it would consider telling the utilities not to renew their grid agreement, if negotiations fail.
The newest commissioner on the three-member panel, Jack Cashman, also is expected to issue a minority report calling for something stronger. He wants the utilities to begin the process of developing an in-state alternative to the regional grid agreement, to put added pressure on CMP, Bangor Hydro and ISO-NE.
Cashman's approach is more in line with what large industrial customers had pushed for during the PUC proceedings. They advocated a "hybrid" alternative, in which a Maine-based systems operator provides certain core functions in its service area and contracts with the regional grid operator to coordinate planning and balance power needs.
Industrial customers were disappointed by the PUC's ruling, which they say will do nothing to lower electricity costs. Maine ratepayers give $100 million a year more than they should to the regional grid operator, effectively subsidizing southern New England states, said Tony Buxton, a lawyer who represents the Industrial Energy Consumer Group.
"Two commissioners have decided, effectively, that they're satisfied with the status quo," Buxton said. "They have set Maine on a course of begging, and so far, begging is costing Maine $100 million a year."
The commission is made up of Sharon Reishus, the chair, Vendean Vafiades and Cashman. They are barred from discussing their ruling with the media until a written decision is issued.
State lawmakers won't see that decision until later this week. Those who serve on the committee that oversees utility matters are waiting to digest the details. But right now, the wait-and-see approach seems likely to win support.
"The PUC picked the option of least resistance, which is appropriate for what we know," said Rep. Stacey...
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