Times Record: Don’t blow it (Nov. 8, 2013)

Gov. Paul LePage — the self-styled defender of free-market capitalism — ran off a multibillion-dollar multinational energy company with experience building offshore wind platforms and several million dollars already invested here, in favor of a public institution that once had a chance to bid, but did not (or could not), and which only recently generated a few kilowatts of wind energy with a pilot project in Castine Harbor.

We thought the private sector was the answer to everything afflicting Maine’s economy. Apparently not.

It’s important to consider these political ironies as the LePage administration bumbles its way backward on renewable energy.

Now the University of Maine has been handed the reins of this crucial new industry, which could generate 7,000 to 15,000 jobs when full blown.

But does the draft proposal issued this week by Maine Aqua Ventus — UMaine’s public-private consortium — get Maine where it needs to go?

It’s hard to know, because so much of the draft plan is not available to the public for proprietary reasons.

What we know is that the pilot project will be constructed near Monhegan Island, which will benefit from free electricity. Right now, most of the island gets its power from generators, estimated to cost islanders about 70 cents per kilowatt-hour.

Boiled down, there are two elements of any industry: input costs and output prices. To be successful, you want the former to be as low as possible; the opposite for latter.

For Monhegan, the numbers easily work out for success. But is that true everywhere in the state?

LePage has made high energy costs his administration’s mantra, and it’s true that output prices for wind power, initially, are projected at higher than market rates for other types of electricity. That’s not necessarily a bad thing, as any power exported to other users could end up as a big industrial windfall for Maine as we ramp up. On the other end, costs for construction and R&D can be expected to rise as the economy continues its recovery. Can UMaine and its partners absorb the major capital costs that accompany the scale necessary to succeed?

The playing field is a challenging one, and as LePage himself has lamented, it’s hard to pick winners.

Maine has a unique geography, solid work force and an industrial- and knowledge-based cluster emanating from Brunswick Landing that includes entities such as the Maine Technology Institute and Southern Maine Community College’s composite research labs and extends out to Reed & Reed, Bath Iron Works … almost the entire Mid-coast industrial footprint, ready to contribute to offshore wind.

But it’s not possible without public help, as LePage himself has apparently realized, since he intervened for UMaine and has said he would use quotas established in the Maine Wind Energy Act to develop other energy resources, such as natural gas.

Even though the proposal released this week by Maine Aqua Ventus — the UMaine consortium — contains few details about how it would exceed the performance of the world’s fifth-largest energy company in terms of expertise; capital; and benefits to ratepayers, industry stakeholders and the environment, we’re willing to wait and see how this project takes off.

We’ll go along with the LePage administration on offshore wind, if:

  • It acknowledges, explicitly, that publicly funded institutions have intrinsic value in the development of our state’s economy — enough to merit investing in them, not cutting their funds, as has occurred each of the last several years.
  • It comes to grips with the fact that higher ratepayer costs are not the only value in play — there is a supply chain and a leadership position in a brand-new industry at stake.
  • Finally, it realizes that in a world that requires an all-of-the-above energy strategy — even those that are subsidized, just ask residents of Wiscasset — we must include renewables that can one day replace fossil fuels and finally put a tailwind on the economy of Mid-coast Maine.

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