Maine regulators approve long-term contract

Maine utility regulators have approved a long-term contract to purchase the output of a 72.6-megawatt wind power project under development by Weaver Wind, LLC in Hancock County, Maine. The 20-year contract bears a price of 3.5 cents per kilowatt-hour, escalating at 2.5 percent per year.

A Maine statute enacted in 2006 authorizes the Public Utilities Commission to direct investor-owned transmission and distribution utilities to enter into long-term contracts, to the degree necessary to ensure reliability, meet energy efficiency program requirements, or reduce customer costs. In 2008, the Commission used this law to order a contract with the Rollins Wind project. After three subsequent procurement rounds, in 2017 the Commission approved a contract to buy 75 megawatts from Dirigo Solar, LLC, at a price of 3.4 cents/kWh escalating at 2.5% annually for 20 years.

In response to its most recent solicitation, earlier this year the Commission approved a term sheet for a contract to buy 100 megawatts from Three Rivers Solar Power, LLC’s solar project, with a price of 3.5 cents/kWh escalating at 2.5% annually for 10 years. Most recently, on July 12, 2019, the Commission approved a contract to buy the output of the Weaver Wind project, also at a price of 3.5 cents/kWh escalating at 2.5% annually for 10 years.

In addition to this existing law, in 2019 the Maine state legislature enacted several additional long-term contracting programs. One new law creates a new "Class IA" renewable portfolio standard, and requires the procurement by December 31, 2020 of energy or renewable energy credits from Class IA resources sufficient to cover between 7 and 10 percent of Maine's retail electricity sales, with a second round bringing the total procurement to 14 percent of Maine's retail electricity sales. Another new law requires the procurement of 375 megawatts from distributed generation resources between 2020 and 2024, with each project sized at less than 5 megawatts, and specific requirements for participation by non-residential and "community" or shared-ownership projects.

Collectively, these laws create a variety of opportunities for electric power generation projects to compete for and win long-term contracts to sell their output to Maine utilities.

ISO-NE 2018 CELT projects future energy usage declines

The operator of New England's bulk electric grid projects that both energy usage and peak demand from the utility grid will decline slightly in the region over the 10-year period between 2018 and 2027, primarily due to the deployment of energy efficiency measures and behind-the-meter solar arrays.

ISO New England Inc. is the regional transmission organization responsible for the electric grid and electricity markets across most of New England. On April 30, 2018, ISO-NE published its 2018-2027 Forecast Report of Capacity, Energy, Loads, and Transmission, or CELT Report. The grid operator prepares annual CELT reports which describe the assumptions used in ISO system planning and reliability studies. These assumptions include the total generating capability of in-region resources, as well as a long-term forecast for growth in energy consumption and peak demand.

According to ISO-NE's 2018 CELT Report, overall regional electricity use will grow 0.9% annually over the 10-year period. But when energy efficiency and behind-the-meter generation are taken into account, ISO-NE's forecasts for both regional energy usage and peak demand project slight declines over the 10-year period. The grid operator projects an annual decrease in net energy usage by -0.9% annually, with seasonal peak demands projected to decline by -0.2% to 0.7% annually. ISO cites "continuing robust installation of energy-efficiency measures and behind-the-meter solar arrays throughout the region" as the primary factors driving this decline.