Maine agency approves electricity supply contract with Verso Bucksport

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Maine agency approves electricity supply contract with Verso Bucksport

September 08, 2010 - 05:20
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AUGUSTA, ME, Sept. 7, 2010 (Press Release) -Today the Maine Public Utilities Commission unanimously approved a long-term contract with Verso Bucksport, LLC (Verso) for a package of energy supply composed of capacity and renewable energy credits (RECs) resulting from Verso's planned facility conversion from fossil fuel to biomass. The long-term contract will provide the company with a secure source of financing needed for the planned conversion project. "In approving long-term contracts, we must proceed with caution, as instructed by the Legislature, knowing the difficulty of predicting future energy and REC pricing. This project has the potential to provide modest value to Maine ratepayers in the first five years, with increasing value if the contract is extended for a second 5-year period," stated Commission Chair Jack Cashman. "The project adheres to the state's policy of reducing greenhouse gas emissions--estimates indicate a 155,000 metric ton reduction in carbon per year by displacing fossil fuel with biomass."

The proposed project met the statutory criteria for Commission approval including capacity benefits, diversity in Maine's energy supply and greenhouse gas emission reduction. The Commissioners directed Central Maine Power to participate in negotiation of a contract with Verso. Specific terms of the project will not be released until the contract is finalized.

Background: The Commission was given the authority by the Legislature in 2006 to direct electric utilities to enter into long-term electric generation contracts in order to bring cost benefits to Maine ratepayers by providing among other assets: lower electricity supply costs for Maine consumers; increase in renewable capacity; a hedge against volatile market prices of electricity; and an offset of costs resulting from new transmission. In 2010, the Legislature amended the statute to allow the Commission to include RECs in long-term contracts. The Commission approved its first long-term contract under this authority in October 2009. The consideration of other long-term contract proposals continues at the Commission.