CENTRAL MAINE POWER sent out a press release and started running ads on Thursday questioning why Massachusetts electricity customers should pay an extra $2 billion over 20 years for clean energy.
The Maine utility’s eye-catching question is just one example of how a Massachusetts procurement process for billions of dollars worth of clean energy has taken on a life of its own as it winds down to a final award later this month.
Most government procurements are low-key affairs. An agency puts out a request for proposals, companies submit their bids, and, after a period of internal review, a winner is selected. Most of the process plays out privately behind the scenes.
But the state’s procurement for clean energy has diverged from that playbook. The private, behind-the-scenes bid evaluation process is still taking place, but it’s been accompanied by very public jockeying for position among many of the would-be contenders. Companies have hired publicists, mounted letter-writing campaigns, run advertisements, and tried to distinguish their project from the competition in any way possible.
Part of the reason for the new “outside” approach is the complexity of the procurement. It’s not just a case of opening the bids and selecting the lowest price. Many other factors are involved, including how fast the project can be built, whether it can acquire the necessary permits and regulatory approvals, and what economic benefits will flow to Massachusetts.
The public campaigns of the companies tend to focus on these broader themes. Company officials declined to comment on their strategies, but it appears their goal is to influence the evaluation team directly or indirectly by swaying public opinion – or at least the opinions of key, upper-level policymakers in the Baker administration.
Several company officials also said privately that their public campaigns are designed to raise the political stakes of the procurement, making it difficult, if not impossible, for the evaluation team to play favorites. The bid evaluation team includes representatives from Eversource Energy and National Grid, utilities that have submitted their own bids for the procurement.
Central Maine Power is playing up its low cost, which business groups in Massachusetts have identified as a primary concern with efforts to increase the use of renewable energy. Undoubtedly, Central Maine’s bid goes into great detail on its cost advantages. But the company’s public campaign takes it a step further, emphasizing that the tab for importing hydroelectricity from Quebec into Maine will be significantly less than what two rivals are saying it will cost them to deliver similar amounts of hydropower from Quebec into Vermont and New Hampshire.
“The cost differential includes $650 million in construction savings and hundreds of millions of dollars in subsidy savings-payments that provide no benefits to Bay State utility customers,” Central Maine Power said in its press release.
One of those rivals, TDI-New England, has been running ads for months proclaiming its support in Vermont and the environmental benefits of keeping its transmission line from Quebec hidden from public view by running it under Lake Champlain and underground in Vermont. The other rival, Eversource’s Northern Pass, has repeatedly made the claim that its project to import Quebec hydroelectricity into New Hampshire could be completed two years ahead of its rivals, delivering the greenhouse gas emission benefits much more quickly.
The Granite State Power Link, a Canadian wind power project being developed by National Grid and Citizens Energy, has mounted a campaign through op-eds and interviews that questions whether power from Hydro-Quebec would even reduce greenhouse gas emissions, given that the hydroelectricity is either already being produced or in development. National Grid has also enlisted the support of a group of New Hampshire lawmakers, who wrote a letter to Massachusetts political leaders. For good measure, it put out a press release on Tuesday trumpeting $20 million it would provide over 40 years to promote economic development in New Hampshire.
Meanwhile, Providence-based Deepwater Wind, a surprise entrant in the clean energy sweepstakes, has argued that awarding it a small contract would diversify the overall clean energy procurement, give a lift to the fledgling offshore wind industry in Massachusetts, and spur economic development in the Bay State rather than Vermont, New Hampshire, and Maine. Most expect the staging area for offshore wind to be the New Bedford area.
The public campaign of Deepwater Wind has a political undertone, as key lawmakers on Beacon Hill, the mayors of New Bedford and Fall River, and a host of academic and business leaders throughout the South Coast have all written letters of support to Baker administration officials.
Some 20 years ago utilities were separated into generation companies and distributors in order to set up a competitive wholesale market for electricity administered by ISO-NE. State procurement contracts for clean energy bypass the wholesale market to reduce the electricity sold competitively.
In the absence of seasonal storage, which does not exist, the grid cannot generate, on average, more than about 10% from wind and solar. Other places that have pushed these type of contracts to the limit have ended up curtailing wind power when winds are strong and demand is low. During such periods the contracts are such that wind farms get paid just the same when ordered to curtail excess power.
The “Goldrush” for clean energy has to stop. It is destroying the competitive wholesale market. Power grids, that tried replacing conventional power with wind and solar, have ended up with blackouts and brownouts. When push come to shove, rates go through the roof, and carbon avoidance becomes next to impossible.
Shifting to cleaner power is possible. Clean power, however, is misnomer as all power sources have their own unique environmental impacts.
There are also supply management problems with going with anything more than around 10% of sourcing power from wildly fluctuating supplies from arguably cleaner wind and solar power production facilities.
And finally, one should at least watch closing how government officials are making supply contracting decisions per less than market or clear “cleanliness” criteria.