On Tuesday, June 30, the Maine Public Utilities Commission issued its final order in Docket No. 2008-156, finding that Maine’s transmission and distribution utilities, Central Maine Power (CMP) and Bangor Hydro, should automatically renew their participation agreement with ISO New England (ISO-NE).  The ruling closes a two-year Commission investigation into whether Maine utilities’ continued participation in the regional transmission organization was in the interests of Maine’s electricity consumers.

In its Order in an earlier phase of the investigation, the Commission had expressed concerns with ISO-NE’s transmission cost allocation, governance, and cost containment efforts, and therefore reviewed a number of alternatives to ISO-NE participation, including formation of a Maine Independent System Administrator (MISA) and a hybrid option whereby Maine would contract with ISO-NE for certain operating services while providing the remainder itself.  Ultimately, the Commission concluded that the MISA option “would not provide Maine’s ratepayers with tangible economic benefits in the foreseeable future; would represent a step backwards in terms of energy market development; and would present significant transaction risks to implement.”  The contract option was not viable in that ISO-NE was not obligated (and in fact had expressed reluctance) to contract for operating services with nonmembers, and federal regulators would not likely approve such a hybrid arrangement in light of federal policies promoting regional transmission organizations. 

The Commission thus reaffirmed its earlier conclusion that continued membership in ISO-NE, with continued pursuit of reforms that would improve the transmission cost allocation, governance, and cost containment issues it had identified in its earlier order, “is the best option for the State’s ratepayers at this time.”  While the Commission recognized that not all of its reform objectives had been realized in recent negotiations among other transmission owners in New England and ISO-NE, efforts by those parties, the Commission, Maine’s utilities, and other stakeholders over the past six months had yielded some success.  The Commission also noted that continued membership in ISO-NE was crucial to funding needed reliability upgrades and developing Maine’s “vast renewable resource potential,” stating:

After the exhaustive process that has led us to today’s conclusion ...
staying in ISO-NE and pressing for further reforms remains the State’s
best option to fulfill its energy objectives at this turning point in the
State’s, and the nation’s, energy future.

Pierce Atwood represented CMP throughout this proceeding.