http://www.pressherald.com/business/stories/030828ferc.shtml
Thursday, August 28, 2003

Maine criticizes electricity upgrades

By MATT WICKENHEISER, Portland Press Herald Writer

Maine and Rhode Island have complained to the Federal Energy Regulatory Commission about how proposed upgrades to the electrical- power grid in Connecticut will affect residents throughout New England.

"The issue involved is who should pay when major transmission lines in New England are upgraded. The current practice and the practice ISO New England is proposing to continue is essentially to spread the cost among the entire region," said Stephen Diamond, a Maine Public Utilities commissioner.

"The argument we and Rhode Island have made is that this is both unfair and bad economics. It's our position that there are zones within the region which will not benefit from some of these upgrades except in very remote and limited ways. Those who are the principal beneficiaries should pay the lion's share of the cost."

A month-old proposal before the Federal Energy Regulatory Commission to build a $700 million transmission line in Connecticut would bill Mainers between $10 million and $20 million for a project that would only benefit southwestern Connecticut.

The proposal before federal regulators comes from ISO New England, which operates New England's power grid. ISO stands for Independent System Operator. The upgrade would have residents of all six New England states pay for the improvements through a tariff on electricity bills.

"It works its way through your (Central Maine Power) bill, on the delivery side," said Diamond.

Diamond noted that southwest Connecticut needs more power these days because the area's economy is robust and electrical demand is growing. With that in mind, said Diamond, the area should be better equipped to pay for the upgrade, and Maine shouldn't be burdened by the extra costs.

The paperwork was filed by Maine and Rhode Island on Aug. 21 and asks the Federal Regulatory Commission to redesign the payment method for the upgrades, charging 75 percent to the benefiting area and 25 percent to the rest of the region, Diamond said. ISO New England and other parties will be able to respond in writing, he said, and the commission will likely make a decision without a hearing.

Very few areas of New England were impacted by the massive blackout that darkened the Northeast, Midwest and parts of Canada a few weeks ago. One area that was hit was southwest Connecticut, and the overburdened electrical system was pegged as a weak spot in the New England grid.

Representatives for Connecticut's Department of Public Utility Control and ISO New England have said in the past that a regional approach is required for repairs to the grid, which links all New England states.

In addition to unfair allocation, said Diamond, the system in place unfairly influences the free market system that the power utilities are supposed to be operating in.

There are three main ways to increase the amount of power to a region, he explained. The first alternative is to build more - or larger - transmission lines to the region.

The second is to let the market build more power plants in the region, which will happen because demand is there, Diamond said.

The last alternative is to dampen demand through power conservation programs, he said.

The only alternative that allows costs to be shared throughout a region - not just in the area that would benefit from the upgrade - is the increase in transmission lines, Diamond said. Because of the cost-sharing aspect, most regions choose to go that route rather than the two others, skewing the supply and demand balance, he suggested.

Staff Writer Matt Wickenheiser can be contacted at 791- 6316 or at:

mwickenheiser@pressherald.com