LePage wants to classify 100MW dams as “green energy” – largest dam in Maine is 75MW
At the 71st Annual Maine Agricultural Trades Show held 10 January 2012 in Augusta, Gov. Paul LePage called for the repeal of the law that prohibits hydroelectric plants of more than 100 megawatts (MW) capacity from being classified as a “renewable” source of energy. By law, 35% of electricity consumed in Maine must come from renewable sources, which includes hydro, solar, tidal, wind, etc. This requirement is known as the Renewable Portfolio Standard.
At the trade show LePage said:
I don’t know if you know this but in the State of Maine, if you have a hydro-plant, and you generate less than a hundred megawatts of electricity, you’re considered renewable energy. If you go above a hundred megawatts – in Maine – it’s considered bad energy, no longer renewables, no longer green. Think about that. Now why would anyone put that kind of legislation on the books? Unless it’s to help just a very few people.
In his State of the State Address last week (24 January), LePage renewed his call to repeal the 100MW limit:
Electricity prices in Maine are the12th highest in the country and 42% above the national average. As a result, Mainers pay approximately $400 million dollars more than the national average for electricity. Think about that – $400 million dollars that could be used elsewhere in our economy.
Maine no longer competes just in New England; it must compete nationally and globally. However, there are some who think government should mandate what types of energy Mainers must buy – regardless of how expensive it is.
I DO NOT support Augusta being in the business of increasing costs on Maine ratepayers to pad the pockets of special interest groups. I believe it is morally and ethically wrong to take more money from those who can least afford it to line the pockets of those that are politically connected here in Augusta. I have met and spoken with companies ranging from natural gas providers, oil dealers, electric utilities, and biomass suppliers to gather input regarding how to lower Maine’s overall energy prices.
My energy policy will focus on all forms of energy, and give Mainers the freedom to choose whether or not they buy from renewable sources.
For example, hydropower is a green energy. Let’s remove the 100 MW restriction on renewable hydropower.
I support letting the free-market decide what energy sources are sustainable for Maine people.
It is that last line that is important to keep in mind, for Maine does not have any hydropower plants that exceed 100MW in capacity. The largest hydropower plant in Maine is on the West Branch of the Penobscot River in Millinocket (see table from ISO New England below (h/t Tim)).
As was explained here, how electricity is generated and then supplied to consumers is complicated. Every day, electrical utilities (Bangor-Hydro, CMP) in Maine predict how much electricity they will need the following day and days ahead. Generators then offer a contract for how much they will supply at what price:
Power plant offers to sell electricity are ranked by price. One by one, the lowest-priced plants are selected, accounting for transmission constraints and potential outages, until enough supply is committed to meet demand. The last plant chosen sets the wholesale “clearing” price. All producers that offer their resources at or below the clearing price are scheduled to operate and earn the clearing price for their production. Those that offer too high are not selected to run, creating a built-in incentive not to overbid.
Hydro-electric generators have almost no cost in generation, once their construction costs are paid off. During this daily bid process, they typically offer their electricity for free, knowing that it will always be chosen, and that they will actually be paid the “clearing” price. All the bids offered are called a “bid stack.”
Let’s say that you are a large hydro-electric company, like Hydro-Québec. You have lots of extra capacity, but most of your generators produce more than 100 megawatts. You would love to sell that over-capacity to Maine, but that state mandates that 35% of what is used comes from a “renewable capacity resource.” It costs almost nothing for you to produce all this juice, and since you are forced to sell it near cost to your Canadian customers (they’re socialists, you know), imagine the revenue stream possible should you be able to tap into an American market, and sell it at that “clearing” price noted above.
The rates Hydro-Quebec charges its local customers is less than what Mainers pay. Gov. LePage must see bringing in electricity from Quebec as a way to lower costs in Maine, without realizing that unless Hydro-Quebec can supply all electricity consumed here, rates will still be determined by the bid of the last generator in the stack. Instead of bringing prices down for Mainers, LePage’s plan will be a windfall for Hydro-Québec.
And what’s worse, hydroelectricity from Quebec will arrive in such quantities as to drive out that generated by renewable plants in Maine. That Hydro-Québec is a government-owned public utility founded by the government of Quebec is also of interest.
Nicely done Governor.
List of hydroelectric plants in Maine (the largest capacity highlighted in yellow):