Public Utilities Commission Reconsiders Maine Aqua Ventus Rate Agreement

The University of Maine’s proposed ocean wind energy project located off Monhegan Island, called Maine Aqua Ventus (MAV), took a blow in January when the Maine Public Utilities Commission (PUC) issued an order requesting comments on whether it should reconsider its agreement with MAV on payment for electricity generated by the project. After a one-week extension, the public comment period closed on February 21. Harry Lanphear, PUC administrative director, reported that more than 573 comments had been received.

In January 2014, the PUC approved a term sheet (an initial agreement between the energy provider and the state) for twenty years of electricity at $0.23 per kilowatt hour during the first year of production. That price would then increase by 2.25% during each of the next 19 years of the contract. As currently proposed, the 6-megawatt project, comprising two floating wind turbines approximately three miles southwest of Monhegan, could generate electricity for up to 7,000 homes; the $0.23 per kilowatt hour rate for electricity would cost ratepayers roughly $9 more during the project’s first year. Maine Aqua Ventus and Central Maine Power submitted a formal contract based on the term sheet in December 2017, for PUC approval. Since the 2014 approval, however, membership of the three-person Commission has changed. R. Bruce Williamson and Randall Davis were appointed to the PUC by Governor LePage in 2015 and 2017, respectively. Mark Vannoy, who voted against the Maine Aqua Ventus term sheet in 2014, has since become PUC chairman.

In requesting comments from the public on whether to reconsider the term sheet, the PUC stated that electricity prices have dropped since 2014 and that the agreement could be worth as much as five times the market price. In addition, by permitting the existing agreement and its yearly rate increases to stand, ratepayers would be subsidizing the project unduly. Tony Buxton, MAV legal counsel, said that while the MAV project will need some form of financial support from electricity customers, the cost would be limited to about 7.5 cents a month or less. The rest of the cost would be covered by private and public investors, including the U.S. Department of Energy.The PUC sought comments on whether any developments since the 2014 term sheet warrant reconsideration of the project, including a decline in energy prices; technological advances in offshore wind technology; Maine’s renewable energy goals; the economic benefits of the project; and various project-specific circumstances that may have changed since the original approval.When the PUC will come to a decision on the rate agreement with MAV is unclear. “There is no formal deadline in this matter. It is premature to address potentional next steps until the Commission has had time to consider all of the comments,” Lanphear said in an email message.