Maine energy corridor proposals solicited

Wednesday, October 10, 2012

Maine is soliciting letters of interest in using state-owned highway corridors as paths for electric transmission lines.  Resulting from a state law enacted in 2010, the solicitation may lead to the development of transmission lines along state-owned highway routes including I-95 and I-295.

Siting transmission lines and other linear infrastructure can be challenging, as routes typically are narrow but must be uninterrupted over long distances.  The diversity of landowners along most proposed routes can lead to difficulties in negotiating leases or purchase prices for the land rights, or enmity if the developer uses eminent domain powers.  Because state-owned highway routes have a single owner and are already linear, existing highway corridors can provide a natural route for transmission lines.  If lease payments are set properly, the state can create a new source of revenue to support energy initiatives or other governmental objectives.

Maine sits in a strategic position that may enhance its opportunity to capitalize on highway corridor leasing.  Maine is viewed as the New England state with the best sites for development of renewable electricity generation; this electricity generally must flow out of state to more power-hungry markets in Boston and points south.  The state also sits between generation in Canadian provinces and southern New England's significant consumer demands, increasing the pressure for transmission development.

But allowing transmission line development in highway corridors may not come without risk.  If lines are permitted, they may limit future opportunities to develop higher-value infrastructure along the same key routes.  Transmission lines allowing Canadian power to flow to Boston could also dampen the market for development of in-state energy projects, which typically provide greater economic development prospects than would a transmission line connecting out-of-state resources.  Depending on how their costs are allocated at the regional level, transmission lines could also lead to higher electricity rates for Maine consumers.

Under the 2010 law, Maine formed an interagency review panel to develop rules and conduct a competitive solicitation for potential energy corridor developers.  The law also provides that highway corridor transmission developments are subject to a standard of review requiring developers to demonstrate that their projects will not impede in-state electricity generation, but will lower electricity rates and energy costs for Maine consumers.

The interagency review panel is now soliciting letters of intent to seek corridor rights.  Proposals will be reviewed on a rolling basis.  Once the panel receives one or more proposals, it will begin the process of evaluating their specifics to screen out proposals that fail to meet the standards.

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