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Maine Puts Halt to Northeast Energy Corridor

Pressured by Maine manufacturers, labor unions and energy developers, Maine Gov. John Baldacci Friday signed into law legislation that places a moratorium on a controversial plan for an energy corridor to move electricity and natural gas between New Brunswick, Canada and New England. Baldacci inked the bill only hours after the state legislature passed it.

The legislation went into effect immediately because it was passed by more than a two-thirds majority and included an emergency enactor provision. The bill placed a moratorium on construction of large transmission lines until a newly created study commission reports and the legislature acts on its report.

Members of the Maine Jobs First coalition called on the legislature to withhold its approval of the energy corridor until New Brunswick and the Canadian government tone down their opposition to the construction of liquefied natural gas (LNG) facilities on Passamaquoddy Bay, which borders Maine and the Canadian province of New Brunswick.

In 2007, the Federal Energy Regulatory Commission denied New Brunswick's request to suspend processing of the applications to build two LNG terminal and associated pipeline projects in Maine. In making the request, New Brunswick cited the Canadian government's decision to deny Maine-bound LNG tankers permission to cross Canadian waters to reach their proposed terminals (see Daily GPI, June 5, 2007).

The Maine legislature's action "effectively blocks certain [power] lines from Canada and will help pressure Canada to allow Maine to transport LNG through Canadian waters. In turn LNG will lower our electric rates by 10-15%, if we have LNG storage in Maine," said Anthony Buxton, general counsel to the Industrial Energy Consumer Group (IECG).

"We are relieved that the legislature clearly heard our concerns and acted accordingly. This proposal was seriously flawed and put Maine in the back seat," said John Hanson, executive director of the Maine State Building & Construction Trades Council.

In March, Baldacci and New Brunswick Premier Shawn Graham pledged to pursue the development of a Northeast energy corridor, which would cross from New Brunswick into Maine and ensure the delivery of a wide range of energy products -- natural gas, electricity and renewable energy -- to the region.

Saint John, NB-based Irving Oil Ltd. is conducting commercial and technical feasibility studies on the first phase of development of the corridor, which includes 1,200-1,500 MW of electrical transmission capability, wind generation and a natural gas-fired co-generation plant.

"We understand why Irving Oil was itching to build this thing, but we didn't believe that Maine should bear the costs while Canada gets all the cash," Hanson said.

"With Maine's energy future at stake, we should not be sacrificing opportunities on our side of the border. We're glad to see that this massive corridor will get more scrutiny because Maine simply can't afford to get this wrong," said Glenn Poole, president of the IECG and members of the Maine Jobs First Coalition.

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