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June 13, 2018

Maine Aqua Ventus regroups after PUC reopens 2014 power agreement

File photo / James McCarthy
File photo / James McCarthy
Habib Dagher, director of UMaine's Advanced Structures and Composites Center, in front of the VolturnUS prototype wind turbine deployed off the shores of Castine in 2014. On Tuesday, the Maine Public Utilities Commission unanimously voted to reopen the Maine Aqua Ventus pilot project's 2014 power purchase agreement.

The University of Maine reaffirmed its support for the Maine Aqua Ventus project, which was dealt a setback Tuesday when the three-member Maine Public Utilities Commission unanimously agreed to reconsider terms of the pilot offshore wind project's 2014 power purchase agreement with Central Maine Power Co.

In a statement issued Tuesday afternoon a few hours after the PUC's action, UMaine said it "is extremely committed to this project, and we are confident that we can answer the PUC's questions to establish a power purchase agreement that allows the project to move forward as soon as possible."

Before making its decision, PUC Chairman Mark Vannoy explained why the commission decided to reopen the 2014 term sheet, which the Maine Aqua Ventus consortium had argued was the equivalent of a contract — a point that Vannoy rebutted in his detailed and lengthy analysis.

"The commission understands the importance of this project to Maine Aqua Ventus and its stakeholders," Vannoy said in a statement issued after the vote. "On the other hand, it is incumbent on the commission to ensure that the proposal continues to meet the legal requirements established by the Maine Legislature in 2010 and remains in the public interest of Maine citizens and businesses."

PUC's reasons for reconsidering

In his presentation, which was presented in a live video on the PUC's website, Vannoy stated that since the term sheet was initially approved in February 2014, significant changes in energy markets and technology, as well as changes to some of the specific provisions of the Maine Aqua Ventus project and proposal, had occurred.

Before finally approving a 20-year contract with Maine Aqua Ventus — which the PUC estimated would cost CMP's ratepayers in excess of $200 million over that period — Vannoy asserted that the PUC was obligated to review the terms of power purchase agreement in the context of these changed circumstances.

He pointed out, for example, that recent energy market price projections were much as 80% lower than those considered by PUC when it approved the Maine Aqua Ventus term sheet in 2014.

UMaine's response and next steps

UMaine said it expected that the PUC would issue an order in the next few weeks that will include specific requests for additional information about the pilot project to install two 6-megawatt offshore wind turbines two-and-a-half miles offshore Monhegan Island.

"We're grateful for the opportunity to provide additional information in support of a power purchase agreement," UMaine said, reiterating the ongoing bipartisan support received from the Maine Legislature (which unanimously approved The Ocean Energy Act in 2010) and Maine voters who decisively approved an $11 million bond to advance the Aqua Ventus project shortly after that act was approved.

As noted by The American Jobs Project's 57-page report released last week, the stakes are high for Maine, given the accelerating pace of offshore wind development on the East Coast and throughout the world. The Berkeley, Calif.-based nonprofit's report concluded that the Aqua Ventus project and UMaine's patented floating hull technology offered "significant economic opportunity for job growth" that could support an annual average of more than 2,100 jobs through 2,100.

In its statement, UMaine cited that report and provided additional context supporting the report's case that Maine is poised to be a leader in offshore wind innovation, manufacturing and deployment.

"Four years ago, when the PUC approved our draft term sheet, there was no offshore wind industry in the United States," UMaine stated. "Earlier this month, Massachusetts awarded an 800 megawatt offshore wind project, Rhode Island awarded a 400 MW offshore wind project, and New Jersey's governor signed into law 3,500MW of offshore wind by 2030."

The significance of the accelerating pace of offshore wind development on the East Coast is fixed-foundation wind turbines are limited to shallow waters, while most of Maine's offshore wind resource and nearly 60% of the U.S. offshore wind resource is located in deep water where only floating turbines can be used.

"It's clear that floating offshore wind is the next frontier, and Maine's floating turbine technology can still put our state in the driver's seat," UMaine stated. "This project is crucial to our state's future, and we'll continue to work diligently to bring it to fruition."

Environmental group blasts PUC decision

The Natural Resources Council of Maine pointedly linked the PUC decision to what it characterized as Gov. Paul R. LePage's "anti-wind rampage."

"Today the LePage-appointed PUC said 'no' to thousands of jobs and millions of investment in Maine's clean energy future, " Dylan Voorhees, the NRCM's clean energy director, said in a written statement sent to Mainebiz. "We don't yet know whether this decision will kill the Maine Aqua Ventus project. We do know it sends a tragic message to businesses and investors everywhere that doing business with Maine is risky. That's something Maine's environment and economy can ill afford."

Voorhees cited an earlier PUC reversal (with different members) in 2013, when global energy giant Statoil withdrew its proposal to build a pilot offshore wind project in Maine waters after LePage pushed the commission to revisit the term sheet it had reached on Statoil's $120 million Hywind Maine project.

In an Oct. 15, 2013, statement explaining the decision to scuttle its Maine project, Statoil cited "changes in the framework conditions in the state, uncertainty around the commercial framework and schedule implications of project delays [as making] the project outlook too uncertain to proceed" as reasons it was pulling out of Maine. Statoil pivoted and turned its attention to waters off Scotland.

Last fall, its 30MW Hywind Scotland project, the world's first floating offshore wind farm, began transmitting power to the Scottish grid, generating enough electricity for 20,000 homes.

"The legacy of that decision still haunts Maine, as we see other countries and states to our south move forward with offshore wind, reaping the resulting economic boost," Voorhees said. " Instead of beginning to repair the damage from that fateful move, today's decision is déja vu."

"This administration will do anything to thwart renewable energy development, whether it comes from international investors or our own University of Maine," Voorhees concluded. " When it comes to renewable energy development, the LePage administration is 'closed for business,' from a sweeping moratorium on onshore wind to today's bad faith decision to renege on a previous agreement."

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The Maine Jobs Project report

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