Several parties, including Central Maine Power (CMP), recently filed objections with Maine state regulators to Maine Public Service’s (MPS) motion for a protective order in relation to its proposed plans to address reliability issues in Northern Maine.
The matter stems from the state Public Utilities Commission’s (PUC) investigation, opened in December 2012, into electric reliability issues in the Northern Maine Independent System Administrator (NMISA) region, the adequacy of existing structures and processes to address and resolve reliability issues in the region, and to assess what steps the PUC should take to address those issues.
On Dec. 20, 2013, MPS submitted to the PUC the presentation materials for the company’s Planning Advisory Group/Stakeholder meeting held on Dec. 18.
The company noted that the briefing paper was being filed in redacted form, as it was presented at the meeting. The unredacted briefing paper, draft plan and supporting materials contain proprietary business information and will be filed upon the entry of a protective order, the request for which will be filed shortly, the company said at the time.
“The submission of these materials shall constitute Maine Public’s response to the commission’s procedural order dated [Sept.] 24, 2013, which requires Maine Public to identify, by [Jan.] 15, 2014, its proposed solution to the reliability problems in Northern Maine and indicate whether a certificate of public need and necessity is necessary,” the company said.
On Dec. 27, MPS filed a motion for “Protective Order No. 4, Proprietary Business Information,” noting that certain information in the draft plan is confidential because the information is not publicly available, and if made available to the public, MPS and its customers may be harmed.
Specifically, MPS said, the confidential proprietary business information includes MPS’ analysis and cost estimates of the potential solutions to reliability issues in Northern Maine and the comparison of options to secure in-region generation through long-term contracts; strengthen transmission ties to New Brunswick; and connect MPS directly to the ISO New England (ISO-NE) transmission grid.
If the cost estimates and economic data were revealed, that would give other transmission owners, marketers and other market participants an undue commercial advantage in the northern Maine market by allowing them to artificially compete against other projects by knowing MPS’ analysis of the cost structure of various alternatives, the company said.
Such information produced by MPS should be subject to a protective order, and is to be available only to the PUC, the state Office of the Public Advocate (OPA) and the NMISA, as well as their counsel and consultants, MPS said.
MPS draft plan
According to the Dec. 18 briefing paper, “Draft plan to provide long term transmission system reliability to its customers in Northern Maine,” MPS has concluded, based on its analysis of the long-term reliability issues facing Northern Maine, and the potential solutions to those issues, that increasing the strength of its transmission system interconnection to New Brunswick is the least-cost option to provide long-term transmission system reliability to its customers.
Specifically, building a new 138-kV transmission tie line to connect the New Brunswick Power (NBP) system near Woodstock to MPS’ transmission system north of Houlton, along with a number of smaller changes to both systems, will meet MPS’ long-term reliability criteria at a lower cost to MPS and other Northern Maine electricity customers than the in-region generation options, or the options involving connection to the ISO-NE grid.
Transmission cost and supply cost effects were considered in the analysis, the company added, noting that in its analysis of supply costs, MPS assumed that import prices from NBP would continue to track ISO-NE market prices, and so the NBP and ISO-NE connection options were basically the same with respect to their effect on supply costs.
MPS also said it recognizes that the historical relationship of its prices from NBP to prices available in ISO-NE is not necessarily a predictor of what will happen in the future, particularly given the relative illiquidity of the northern Maine supply market. If MPS prices from NBP continue to track – or beat – prices in ISO-NE, then the NBP option will clearly have been the best economic choice. Having said that, MPS added, the downside risk of choosing the NBP option clearly relates to the possibility that prices from suppliers in NBP end up in the future to be higher than could have been realized through a connection to ISO-NE.
“Maine Public believes that it is in the interest of its customers to mitigate this risk by putting in place a long term (10 year) supply contract which is indexed to prices in Bangor (or another suitable part of ISO-NE),” MPS said. “Maine Public believes that NBP Energy Marketing is also interested in a longer term supply contract, and would be willing to provide pricing indexed to the ISO-NE part of Maine.”
By taking that additional step in conjunction with reinforcing the transmission connections with NBP, MPS customers would achieve substantial certainty around key effects on their electric bills – the cost of the transmission and the cost of supply.
“This combined action would in effect ensure that Maine Public customers’ supply prices will remain competitive with those received by customers in the more liquid ISO-NE market, without having to incur the higher transmission costs associated with connecting to, and potentially joining ISO-NE,” the company added.
MPS further noted that it would also recommend that in the sixth year of the 10-year contract, assuming no significant change in the market, supply for years 11 to 15 would be sought through an RFP process. The offered prices and terms would then again be compared to the other alternatives, including a connection to ISO-NE, which, if chosen, could be permitted and built over the subsequent four years. That approach is recommended so that the option of a connection is maintained as a viable alternative to supply prices from NBP. The process, MPS added, would continue on a five-year cycle.
There are about 36,000 electricity customers currently in Northern Maine and the transmission system supplying those customers is owned for the most part by MPS, with a small section in the southwest owned by Eastern Maine Electric Coop (EMEC). Distribution is provided by MPS, EMEC, Houlton Water Company and Van Buren Light and Power. Total electricity billings for the Northern Maine market are estimated to be in the range of $80m.
MPS also noted that the current situation in Northern Maine is such that the reliability of the transmission system is significantly dependent on in-region generation.
The company said it has narrowed its analysis to three categories and eight specific alternatives to ensure long reliability criteria are met over the next 10 years:
- Secure sufficient in-region generation through long-term contracts
– Two existing biomass generators
– Two new combined cycle gas fired generators
- Strengthen transmission lines to New Brunswick
– New 138-kV line connecting NBP Power’s transmission near Woodstock, NBP to MPS’ transmission system north of Houlton, Maine, plus a number of smaller upgrades
- Connect MPS directly to the ISO-NE transmission grid
– New 115-kV line from Houlton to Haynesville
– Extension of the 115-kV Oakfield generator lead from Oakfield to MPS’ system near Houlton
– Connection of the 345-kV EDP generator lead to the MPS system north of Houlton
Among other things, MPS said that if in-region generation is not the solution to MPS’ reliability issues, then additional transmission ties are required. Noting its conclusion that the best way to solve its reliability issues through stronger New Brunswick transmission ties would be to build a new 138-kV line connecting the NBP Transmission system near Woodstock, to MPS’ transmission system north of Houlton, MPS said that in that option, MPS assumed NB Power would fund the transmission changes in New Brunswick and MPS to fund the changes in Maine.
MPS also said it will seek legally binding agreements with NBP with respect to the system changes and operational practices required for that option. The company further concluded that the best option would be to connect to, but not join, ISO-NE, based on its belief that certain resulting new transmission charges to MPS customers would be greater than the revenue requirement associated with capital costs of making the connection, and that this additional cost would not be offset by incremental supply side savings, because MPS supply pricing from NBP already tracks ISO-NE pricing.
Opposition to motion
In its Jan. 7 filing with the PUC objecting to MPS’ motion for a protective order, CMP said that MPS’ proposed non-disclosure of the contents of its analysis, cost estimates and comparison analysis regarding its northern Maine reliability proposal subsequent to the Jan. 15 filing deadline “will prevent full and open review by the commission of MPS’s proposed solution to the identified reliability problems in northern Maine and of all competing proposed solutions submitted by other parties, including CMP, and is therefore not in the public interest.”
CMP said it intends to file its own transmission solution proposal by the Jan. 15 deadline.
“Without full information regarding the MPS proposal, competitors and customers will be unable to provide an ‘apples to apples comparison between the MPS proposal and the other proposals put forth in this proceeding,” CMP said.
In its Jan. 7 filing, the OPA said MPS has failed to show that withholding any information from most of the parties in the docket is necessary in order to protect its or others’ interests.
Among other things, the OPA noted that MPS does not describe with any specificity the proprietary business information for which it seeks protection, though it is clear that the information concerns cost analyses of the transmission and generation solutions discussed, as well as other “economic data.”
Another entity that filed an objection to the motion was EMEC, which noted in its Jan. 7 filing that MPS’ contention that disclosure of information – yet to be fully described – may result in harm to its customers is outweighed by the need by EMEC to have access to such materials, which are pertinent to the issues associated with reliability of electric service in northern Maine, in order for EMEC to assure the interests of its consumers in reliable and economic electric services, as well as its own responsibility, and its responsibility to work jointly with other Maine transmission and distribution utilities, to advance these purposes.
CMP is a subsidiary of Iberdrola USA, which is a subsidiary of Iberdrola S.A.