Maine Gov. Paul LePage has directed staff to research the possibility of the state leaving ISO New England's wholesale electricity market and integrating closer with Canada as a potential response to the continued blocking of new natural gas pipelines by Massachusetts and New York.
LePage made the announcement of Maine possibly leaving ISO-NE during a keynote address May 22 at the New England Conference of Public Utilities Commissioners annual meeting in Cape Neddick, Maine. The governor stressed the need to reduce New England's high energy costs by building natural gas pipelines but state regulators and courts in New York and other New England states have denied permits for those projects.
New Hampshire Consumer Advocate Maurice Kreis tweeted on LePage's speech at the annual meeting of the New England Conference of Public Utilities Commissioners. Source: Twitter |
"Massachusetts must stop blocking our access to natural gas," a post to LePage's Twitter account after his speech said.
Along with proposed legislation and attempts by Massachusetts Attorney General Maura Healey to stop regulatory approvals of new interstate natural gas pipeline capacity, a Massachusetts court ruling in August 2016 vacated a regulatory order that would have allowed Massachusetts electric distribution companies to buy gas transportation capacity and pass on the costs to electric ratepayers. That decision effectively stopped regional efforts to fund proposed pipeline expansions.
But in what could have implications for the rest of the region, New Hampshire's Supreme Court ruled on the same day as LePage's remarks that utility regulators erred in blocking Eversource Energy from buying natural gas pipeline capacity for electric generators as a means of funding Enbridge Inc.'s now-shelved Access Northeast pipeline expansion project.
The governor's press secretary, Julie Rabinowitz, clarified in an email that LePage's "preference would be to get gas through New York and Massachusetts. But since that is blocked, he’s directed his Energy Office to work with the [Office of Public Advocate] and with the [Public Utilities Commission] to study all alternatives, including leaving ISO New England."
Maine's two largest electric utilities, Avangrid Inc. subsidiary Central Maine Power Co. and Emera Inc. subsidiary Emera Maine, participate in ISO-NE. Electric service in the state's two northernmost counties, Aroostook and Washington, is managed by a separate entity, the Northern Maine Independent System Administrator. Emera Maine is among the utility providers in those two counties, but the northern Maine grid is only interconnected with the Canadian grid through the province of New Brunswick to the east and not ISO-NE.
The ISO's overall generating capacity totals 34,837 MW, according to S&P Global Market Intelligence data, with 4,584 MW in Maine. The separate northern Maine system has about 210 MW of generating capacity.
LePage's announcement expanded upon comments he made during his weekly radio address on May 13 and in a May 21 op-ed in Maine Wire. He said he is asking for input from state agencies, experts, and regional stakeholders on how Maine can reduce its high energy prices through "greater electrical integration of Maine" with the neighboring Canadian provinces of Quebec and New Brunswick.
"We also need to determine how Canada can assist in the supply of natural gas to Maine," LePage said. "If we cannot get more natural gas from the south, we should look to our neighbors to the north and the ocean to the east."
LePage said he also wants to identify ways to reduce energy costs as well as any obstacles standing in the way of creating a more integrated electricity system between Maine and Canada. LePage said existing cross-border institutions, trade agreements, or other mechanisms could help achieve that. In the 2000s, Maine increased its transmission interconnections with the province of New Brunswick by adding a second cross-border 345-kV line.
'Who is going to keep the lights on?'
Maine considering leaving ISO-NE is not new, grid operator spokesman Matthew Kakley acknowledged in an email. "This is an issue Maine has previously investigated and concluded that remaining in the regional power system was its best option," Kakley said. "By banding together as a region, the New England states benefit from economies of scale."
In 2009, the Maine PUC decided that staying in the ISO was the best way to achieving the state's energy objectives and providing benefits to ratepayers. One alternative that had been considered was to develop a market with neighboring Canadian Maritime provinces. Another option considered was a Maine-only transmission system operator.
Among those that once advocated for Maine to cut ties with the ISO but is now "open" to options is the Industrial Energy Consumers Group, which represents several large New England manufacturers who depend on 24-hour reliable electricity.
"It's a very different circumstance now," the group's representative, Maine attorney Tony Buxton, said in an interview. "There was no reliability problem then and now the ISO says there's a big reliability problem [in upcoming winters.] And the ISO also says that the only known answer to it is gas pipeline capacity construction and that they cannot cause that to happen. So who is going to keep the lights on?"
In a fuel security analysis issued in January, ISO-NE found that the increasingly gas-dependent region could see energy shortfalls under nearly every scenario for winter 2024-2025 and that emergency actions would be needed to keep power ?owing and to protect the grid.
Buxton said ISO-NE's forecasts spell "death to a modern society that needs to know that it can depend on the availability of power." Furthermore, he said the burden is now on the ISO to explain why New England's six states should remain a part of it when it cannot provide grid reliability.
In contrast, Dan Dolan, president of the New England Power Generators Association, warned about the dangers of Maine going it alone. The group has long-favored keeping the state in the ISO.
"New England has an inherently interstate electricity market leveraging economies of scale and an ability for Maine to export its excess generation," Dolan said. "Without participation in ISO New England, that export capability will be substantially constrained, leading to degraded economics for Maine-based facilities and potential premature retirements."
Emera Maine spokeswoman Judy Long said in an email that state officials will have the utility's full cooperation in exploring energy issues.

