June 21, 2008

Millinocket Biomass Boiler Project Dead

By Nick Sambides Jr., Bangor Daily News, Maine

Jun. 21--MILLINOCKET -- Jerry Tudan thought he was all set.

The Harpswell man had a Washington state investor ready to fund his proposed $50 million, 17-megawatt biomass boiler project intended for the Huber Industrial Park. Katahdin region officials were enthusiastic about it -- it would bring 45 full-time jobs to the area -- and due diligence had found no stopping blocks, he said.

That's when he learned how gridlocked the New England power grid is becoming statewide.

"After we completed our due diligence, we got the green light from the investors that the project was a go to the next [permitting] stage," Tudan said Thursday, "but when we went to register the site with ISO-New England, we were told that the Stetson Mountain wind farm project had registered before us and that had maxed out any available access to the [grid] at this time."

Tudan, of Peregrine Technologies of Harpswell, doesn't blame First Wind of Massachusetts, the company assembling the Stetson Mountain and other windmill farms around northern Maine.

Yet the company is among several that have queued up for so much space on the grid over the next several years that nobody else can fit, he said.

"There's no bitter tears here toward First Wind about it," Tudan said. "That's the marketplace, though I feel very bad about how it went because we had a beautiful project."

John Carroll, manager of public affairs for Central Maine Power, agreed that the New England grid, the primary means by which electricity is shipped among utilities and sold to consumers, is getting gridlocked.

Bangor Hydro-Electric Co., Central Maine Power and Maine Public Service, three of the state's largest utilities, have plans to lay new lines, but none will likely materialize before 2011, at the earliest.

"More power generators could come on the grid now, but there is a certain amount of congestion between Maine and southern New England," Carroll said. "Therefore, there are some limited periods of time where they would not be able to run because their power couldn't be transferred out of Maine."

It would be unfair to blame First Wind or ISO-New England for the biomass boiler's failure to materialize, said Gerry Chasse, vice president of transmission and distribution operations with Bangor Hydro, which powers most of central and eastern Maine.

"Generators have the ability to pay for system upgrades so they can deliver energy to market," Chasse said Thursday. "Ultimately ISO-New England or the system's operator-owners will expand the system, but not for a single generator, because the rule is that generators pay to get interconnected to the system."

ISO-New England is a regional transmission organization serving Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont. It manages the electricity running through the 45-, 115 -- and 345-kilovolt lines connecting various power company systems on a first-come, first-served basis -- provided that would-be generators meet standards designed to ensure reliability.

"To say that any one generator has taken up all capacity is a little inaccurate," Chasse said. "New generators are already coming into an already-constrained system in that there isn't sufficient capacity to carry energy to the market under all conditions."

Several large-scale grid expansions are in development to fix that. They include:

ä CMP's running a 345-kilovolt line connecting Orrington to Eliot and New Hampshire. Including almost 250 miles of 345-kv line, the heaviest cable power companies generally use, the project includes 10 miles of rebuilt 345-kv line and 230 miles of new or rebuilt 115-kv line. It would go on line by 2012 and cost $1.1 billion to $1.5 billion.

ä The Power Connection proposal by Central Maine Power and Maine Public Service to build a 345-kv line connecting the Aroostook County grid to the rest of Maine. That's slated to cost $400 million to $500 million.

ä Bangor-Hydro's proposed Northeast Energy Link Project, which would use 345-kv lines to connect the company's Orrington substation to the Boston area. It's estimated cost: $2 billion.

ä The proposed Keene Road project, which would connect parallel 345-kv and 115-kv power line systems running from Orrington to Lincoln and Chester. The connection will vastly increase the electricity capacity in that area and allow for significant electricity generation potential. Its cost was not available Thursday.

Bangor-Hydro built a new 115-kv line from East Millinocket south in 2002 to improve electrical capacity in the Katahdin and Lincoln Lakes regions, Chasse said. Huber Park has a 46-kv connection, the smallest heavy industrial line generally used, that could almost certainly handle Peregrine's boiler.

Tudan agreed.

"The problem wasn't getting power out of Huber," he said. "The problem was getting it to the rest of New England."

The electricity generators hope that the Maine Public Utilities Commission and other regulatory agencies approve the upgrades.

They say that expanding electricity usage and fledgling energy technologies, such as wind power, make such infrastructure improvements vital to the state's ability to provide stable electricity sources to consumers and to compete economically with other states.

"As more generators come on, their location is not coordinated with where the load [electricity demand] is," Carroll said. "You may have a good strong generator near a load area but if their price is too high, they end up selling electricity elsewhere in New England."

Or you have situations such as First Wind's, which, like Peregrine, is developing newer technologies in areas most suitable for them and finding that the lack of infrastructure makes connecting to the grid more difficult.

First Wind operates a 28-turbine wind farm in Mars Hill and is building a 38-turbine Stetson Mountain site between Danforth and Springfield that will go on line this year. The company hopes to start seeking permits this summer for 40 1.5-megawatt windmills that would create as much as 60 megawatts on two wind farm sites in Burlington, Lincoln, Lee and Winn, and has identified two other communities elsewhere in the state for wind projects.

As planned, Peregrine's proposed 17-megawatt cogeneration facility would have annually burned about 250,000 tons of tree fiber -- mostly wastes -- running 24 hours a day, seven days a week. The project would have employed about 45 workers and sold electricity wholesale to New England power companies.

Its "green-friendly" technology and proximity to the Golden Road, one of the region's primary forest products conduits to one of the largest continuous tract of woodlands in North America, made it enticing to Investor First National Power Corp. of Washington state.

The investor announced in July 2007 that it was on board with Peregrine. Investor First National began vetting the project and assembling legal, environmental and engineering teams to begin the permitting, plant and finance design processes.

If all had gone well, the boiler would have begun operating 15 to 16 months after due diligence and permitting. Tudan said he hasn't heard from Investor First National in at least several months and assumes they have withdrawn from the project. An e-mail to the company was not answered Thursday or Friday.

First Wind spokesman John Lamontagne could not be reached for comment.

Town Manager Eugene Conlogue was disappointed, but not surprised, that the Peregrine project is likely dead.

The Katahdin region's leaders welcomed Peregrine's plans in 2007, given that the region has seen unemployment levels at twice the state average and witnessed a record population exodus due to a devastating mill bankruptcy that vastly reduced the populations of East Millinocket, Medway, Millinocket and Woodville earlier in the decade.

Power generation, Conlogue said Thursday, is "one of our growth areas in Millinocket, but if they don't have a way to get power to the grid, it's a dead issue."

"This is one of those gaps that should really be addressed," he added.


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