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March 5, 2014

Court nixes First Wind-Emera joint venture

The Maine Supreme Judicial Court ruled state regulators were wrong to approve a joint venture between electricity distributor Emera Maine and wind power developer First Wind.

The Portland Press Herald reported Chief Justice Leigh Saufley decided the Maine Public Utilities Commission had wrongly interpreted the state's 2000 statute requiring utilities to operate either as power transmission companies or power generators, but not both. The deal, which has closed, involved Emera investing $333 million into the joint venture, JV Holdco, giving the transmission company a 49% stake in First Wind's projects. The case will return to the PUC, which the newspaper reported could order Emera to sell its stake in the joint venture or restructure it in such a way as to comply with the court's ruling.

At the time of the deal, Emera was the parent company of Bangor Hydro Electric and Maine Public Service, which have merged into Emera Maine. First Wind maintained a 51% majority stake in the subsidiary.

The PUC argued that the investment by Emera, as a parent company of Bangor Hydro and MPS, would not have a direct benefit for the transmission utilities. Saufley said that the decision runs contrary to the intent of the 2000 law separating transmission and distribution companies, and could give one power generator an unfair advantage in dealing with its affiliated power distribution company.

A spokesman for the Boston-based First Wind said the company is reviewing the ruling and considering its options.

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