LEWISTON, Maine — A former Maine state economist said late Wednesday that cheap, dirty coal and the federal government’s unwillingness to enact a carbon pollution tax are the primary reasons Mainers pay more for power than most other Americans.
Charles Colgan, associate director of the University of Southern Maine’s Center for Business and Economic Research, was responding to a new video by Maine Gov. Paul LePage calling for reform that would open Maine up to more electricity imports from Canada.
“The biggest subsidy of all is the government’s refusal to price coal (and oil) to include their social costs on the environment and health,” Colgan said via email.
Maine has a disadvantage on electricity prices not because it uses renewable energy like hydro and wind power, but mainly because 42 percent of the U.S. gets its power from coal, which is among the cheapest sources of fuel, Colgan said.
He said Maine power would look very inexpensive if the true costs of coal energy were compensated.
“Maine’s cost disadvantage on electricity could be wiped out or even become an advantage if the federal government were to impose a realistic carbon tax,” Colgan said. “This is, of course very unpopular, but Maine’s opposition to a carbon tax means that we are allowing other regions like the South to be more competitive than us on electricity costs while we are still getting the costs in the form of air pollution, climate change, etc. Not a really good deal.”
LePage said renewables, mainly wind power, are too heavily subsidized by ratepayers and the federal government.
Colgan said several of the governor’s statements in the video were off track.
“There were several comments he made that were odd (natural gas is not a renewable) or gratuitous (the implied rebuke to Angus King misses the point that wind power development was well under way in Maine before Angus got into the business; he was something of a late-comer),” Colgan said.
LePage also suggested opening up the state’s electrical market to free market forces, but Colgan rejected the notion.
” . . . there are federal subsidies, direct and indirect, to all major energy sources and to many energy efficiency technologies,” Colgan said. “Seeking a ‘free market’ in energy is one of the more futile things one could do.”
Colgan said LePage’s basic point, that Maine should consider importing more power from Quebec and New Brunswick, does deserve careful evaluation.
“Maine has several times in the past considered signing contracts with (Hydro-Quebec) and decided not to do it for various reasons,” Colgan said.
In the 1980s, Maine opted to build biomass plants instead of joining with Quebec to beat the escalating price of oil-fired electricity at the time. He said the state of Vermont did decide to go with Quebec and now gets a large amount of its power from the province. He said that state’s dependence on Canadian power could increase if Vermont Yankee, the state’s nuclear plant, goes offline.
The wholesale electricity market in New England is complicated and while Maine might benefit from importing more power from Quebec, it would depend on several other important factors, Colgan said.
He said several questions need to be answered:
* What price will the Canadians charge?
* What will be the basis of changes in the price?
* What are the transmission-line-construction costs and where will they have to be built?
* Will southern New England want Canadian power in sufficient quantity to justify the transmission line costs?
“We can’t just say we’ll piggyback off Hydro-Quebec going to southern New England if they don’t want the power,” Colgan said. “I’m also uncertain how much Hydro-Quebec wants to sell to New England.”
Colgan noted that Hydro-Quebec, a socialized company, has been growing its supply of wind energy, particularly in the Gaspe Peninsula of northern Quebec.
Maine should carefully assess what role natural gas will play because new sources and lower prices are making it the most affordable form of energy, Colgan said.
“None of these questions imply that (Hydro-Quebec) is not a possible source: They only suggest that the governor’s proposal deserves careful evaluation to see what roles it could play in Maine’s energy mix,” Colgan said.
Colgan, a “True Cost” is the one I pay for the service. Any other “cost” , is unquantified here in this article and anywhere else is merely a best guess.
I suppose a Carbon tax would raise prices in other parts of the country … I am sure that’s an equity they wouldn’t want to pay.
The high cost of energy is one of the main reasons we can’t get our economy off the ground and Colgan wants a Tax on it. **Face Palm**
In other words, Maine’s electricity costs wouldn’t be so much higher than the rest of the country if the rest of the country paid more for their electricity.
As well they should.
In the form of taxes? Maybe I misunderstand, but he isn’t saying he would reduce our costs just increase everyone elses in the name of a social cause. Bizarre.
Yup. I believe electricity/energy markets are more complicated than he’s making them out to be as well.
When did clean air become a social cause?
Not My words Colgan’s ……
“…….social costs on the environment and health”
Another enviro telling us we need to raise the price of coal and gas because of their “true” costs. What a load of bs! I think it’s time for these wacko’s to just go away! I’m not sure about any of you, but I think I’m paying quite enough for gas and electricity thank you very much. What is it with these nut cases?
The way they make it seem the sky is BLACK with dirty air everywhere. Give me a break. Then they show a picture of a plant in Texas. Gawd…
the carbon tax is a scam,plain and raising the price of one energy source to make the other appear more reasonable is something that could come from an enviro-economist
We get to pay the environmental price with mercury contaminated fish, acid rain – and being stuck at the end of the tailpipe of America. Ozone days – where you’re not supposed to exercise outdoors. Awesome.
But ignore all that… we should just make power with the cheapest, dirtiest source and ignore the consequences right?
Where have you been for the last 30 years? All those things you just mentioned were in the 50’s and 60’s. Have you been outside in the last 30 years?
You are incredibly out of touch with both particulate fall out, nearly 100% in a downwind plume that is less than 100 miles; or stack cleaning technology which removes most of the mercury, etc.
Get reading buddy…here’s a start: http://fossil.energy.gov/programs/powersystems/cleancoal/
& while you’re at it, how bout converting those Casco Bay ferries to natural gas, and that stinky Amtrak diesel along with it.
Clean coal? That technology does not exist yet. The link sent describes the exact problems I mentioned.. that continue today – every day, in increasing magnitude.
“The biggest subsidy of all is the government’s refusal to price coal (and oil) to include their social costs on the environment and health,”
So Colgan supports price fixing outright by government fiat?
Ahhh, next please, and hand this crusty old fool the bowl of fruit loops he deserves.
The reason we do not pay for the true cost of coal, oil, municipal waste disposal, etc. etc. etc. is simply due to the LEGAL SYSTEM and the protections afforded corporate entities (BOTH public and private)in this nation with specific regard the usurpation of individual citizen’s standing and right to sue said corporations for basic natural law violations, such as nuissance and tresspass.
The laws and corporate protection statutes date back to the middle 19th century and at this point there is simply no other way to set things right again than an outright revolution and dismantling of the corporatist legal structure our moronic politicians have allowed to fester and boil to our current state of utter nonsense and complete non-functionality for the everyday American person.
According
to Colgan making others pay more for electricity will bring the price of
electricity down in Maine? That is an interesting, but stupid ascertain.
The only people dumb
enough to believe that lowering supply will lower price would vote for Obama,
who wants to make electricity more expensive.
According
to Colgan making others pay more for electricity will bring the price of
electricity down in Maine? That is an interesting, but stupid ascertain.
The only people dumb
enough to believe that lowering supply will lower price would vote for Obama,
who wants to make electricity more expensive.
Let’s just keep our lips pressed to the tail pipe and don’t worry about burning more coal. The prevailing winds travel from west to east, putting us down wind of all those magnificent coal burning power plants. We get none of the benefits of burning coal, yet we get all the environmental problems. Nice trade. Who negotiated on our behalf? The same people who negotiated “free” trade with China and shut down all our shoe factories and paper mills? lol.
Ah another ignorati who doesn’t know how fast particulates drop out of he down wind smoke plume.
What’s your explanation of the disappearance of ‘acid rain’ caused by coal burning power plants?
The photo was originally used in a June 15th article on how the OBAMA led EPA issued new stricter coal fired plant guidelines; it’s been used over and over again as part of a national campaign, but its irrelevance to Maine is largely ignored.
We could under LePage get 100% of our electricity from green Hydro power plants and cut our bills in half or more.
As it is 37% of our power is from hydro; and next to nothing is from coal fired plants.
The true cost of wind farming should then include the environmental cost of the lost forest from clearcuts, access roads, and transmission line R.O.W.’s; but then Colgan might have to work a bit to calculate the tons of lost carbon sequestation or CO2 removed from the air or the value of the oxygen added to the air by the lost trees.
Colgin was a bad economist when he was in government and he’s just proven how much more his skills have degenerated.
The visible emissions in that photo are for the most part water vapor. While there are volatile compounds in those plumes, they aren’t visible to the naked eye. The amount of particulate emmissions is relatively small due to scrubbers and precipitators. The value of that photo in “a national campaign” is strictly emotional, not scientific. But, why cloud the skies with reality when you’re trying to influence the masses? Because as with most political movements, the end justifies the means. Wake up folks; you’re only getting part of the story from our government…always.
Coal is filthy. Just say NO!
Splendid. Dam some rivers. Build some nukes. Drill for oil. Build wind farms. Problem solved.
just don’t eat it and your rash will clear right up.
Thank goodness part of his description is “former”.
Just another product of the failed Baldacci administration whose enviroterrorist influenced policies have brought this once proudly independant state to it’s knees with exorbitantly high energy costs.
1. For homeowners, electricity is relatively inexpensive. Lots of people pay more for cable services or cell phones, for example, than they do for electricity.
2. Maine businesses that use a lot of electricity are at a competitive disadvantage due to our relatively higher electricity rates. Increasing the rates elsewhere, as the article suggests, would itself help level the playing field so Maine could attract more businesses.
3. Colgan’s point that all of our major energy sources are subsidized is an important one. In other words, the fact that wind and other renewables require subsidies to be competitive should not be a deal-breaker.
4. In the long run, we have to hope the dirty coal plants will eventually be cleaned up or closed . . . and, at that point, Maine may become more competitive in terms of energy costs.
Drill baby drill! Coal, natural gas, oil, nuke,frack away. We wouldn’t have to depend on a drop of oil from anyone and tell the UN and Obama what they can do with their carbon tax.
I don’t get LaPage, why does he want to buy energy from hydro-Quebec, when Maine can build it’s own clean green hydro plant and sell it to all of New England. The money is in selling energy not buying it. Let the deserts have the windmills and solar–crazy!
All of the high potential hydro sites in Maine that would be cost effective to build have been developed. Even the Big A and Dickey Lincoln sites were not developed due to cost versus output. Big A also was on the West Branch of the Penobscot right on the border of Baxter Park. The summertime flow of the St. John at Dickey wasn’t dependable. We have some modest redevelopment oppostunities for existing hydro in Maine and lots of localized small-hydro but that is about it. Churchill Falls in Laborador is one of the world’s largest hydro developments. Maine is sitting between Laborador and power-hungry northeast mega-urban area. We ought to be smart enough to find a way to prosper from that situation. It starts, as Gov. LePage says, by getting rid of the arbitrary ban on 100 MW sources that was enacted only to protect the wind industry, which deserves no such favoritism.
Not true, we can start with the 34 dams owned by the State of Maine and assess their power potential; then we have all the tidal lagoons and their power potential; then all the tidal mill sites, approx. 2,000 of them, then all the ‘artificial’ lakes and ponds with dammed outfalls capable of producing power.
Thanks for that information.
N.Maine has been getting power from Canada for a long time and there are basically two power grids, one frfom the North and the other from the south. I guess you know that those Northern wind farms sell into the Canadian power market.
“‘The biggest subsidy of all is the government’s refusal to price coal (and oil) to include their social costs on the environment and health,’ Colgan said via email.”
As long as the coal and oil people own Congress, would you expect this to change?
The humble Farmer
Except Robert, The government doesn’t OWN the coal companies. Nor do they OWN the oil companies. They set the prices based on their costs the government doesn’t set their prices based on some arbitrary figure they come up with. Nor do you. There is no subsidy involved.
Actually, DOD owns congress and they are the largest single user of fossil fuels in the world…as a farmer shouldn’t you be sowing the seeds of change in the heads of your fellow democrats…send a message to Obama, and endorse Romney for a start; send the same one to Pingree, if you dare.
It is all quite Orwellian. “A former Maine state economist” – (thank goodness for former) says we should raise taxes and the price will go down. That does not even pass the laugh out loud test. We do not have a shortage of energy, what we have, in spades, is a shortage of courage to make it. It really isn’t hard at all. The problem is too many people are afraid, afraid of everything except sitting quietly alone on facebook.
From the Commentary: “There were several comments he made that were odd (natural gas is not a renewable) or gratuitous (the implied rebuke to Angus King misses the point that wind power development was well under way in Maine before Angus got into the business; he was something of a late-comer),” Colgan said.”
No, Mr. Colgan, Mr. King wasn’t a ‘late-comer’. Below is a copy of the letter sent to Alec Giffen–the Chair of Governor Baldacci’s Wind Power Task Force, written way back in 2007, before the passage of Maine’s Wind Energy Act and the creation of Maine’s ‘Expedited Permitting Zone’. The author? Rob Gardiner–one of the two ‘principals’ (at that time) of Independence Wind. The other ‘principal’? Former governor Angus King. Unless Mr. Colgan is implying that Mr. King had no say in the actions of his partner or the direction of his company, I think it goes without saying that Mr. King was intricately involved in ‘the business’.
Comments from
Rob Gardiner
December 6, 2007
Alec,
Thank
you for listening to my opinions on your wind task force’s efforts. You have an
important
mission,
and I know you have addressed it with energy and skill. You asked me to put my
thoughts
in writing. In this memo I’ll try to capture only my most important points, and
please
feel
free to share them.
First,
I should say that in the year that I have been a developer I have not yet
encountered any
problems
at either LURC or DEP. We are still six months away from being ready to submit
our
first
project for DEP review, and our second project, which will be in LURC
territory, is only at
the
earliest stages. Nonetheless, I have learned a few things about the regulatory
processes and
have developed
some strong views.
Assuming
that everyone is trying to fulfill the Governor’s charge to your task force to
facilitate
the
development of appropriate wind energy in Maine, I think it is most important
to identify
where
there are sticking points that might be improved and where there really are no
problems.
In my
opinion, the biggest sticking point is visual impact. Under the standard of
“fitting
harmoniously
into the environment”, wind is at a serious disadvantage. Because it
involves 250′ high structures (now 450′ high [see any new industrial wind application before DEP]) that are usually on high ridges, the visual impacts are significant.
However, visual
impact is a very subjective matter. Christo is probably very jealous of wind
developers– they
get to put very large and beautiful kinetic sculptures on prominent sites. Yet
we treat wind projects
as if they were blights on the landscape. I acknowledge that there are places
where wind
farms
do not belong–Baxter and Acadia Parks, along the 100 mile wilderness section
of the
Appalachian
Trail, and some other special places. After listening to hundreds of people
tell me
their
reactions to seeing wind farms in Quebec, PEI, Pennsylvania, and Europe, I have
been
amazed
how they find them attractive–even beautiful to look at. But under
“visual impacts”
rules
in Maine’s regulatory processes, they are presumed guilty of being offensive.
This is wrong.
An
immediate executive order followed by legislation that specifically removes the
presumption
of
negative visual impact from wind farms would go a long way toward setting the
stage for
balanced
regulatory review.
A
second element of such executive order and legislation should be to declare
that reducing air
pollution
and greenhouse gas emissions is a public benefit, and that wind farms can make
a
significant
contribution toward a more sensible energy mix for Maine. Therefore, any
regulatory
agency
should accept these positions and not waste time receiving further evidence and
debating
them.
To the extent that regulators are charged with balancing the benefits of any
project against
the
negative impacts, these beneficial aspects should be “a given” for
wind farms.
Two
years ago, I participated in discussions with Harley Lee about mitigation on
his project–this
was
when I worked for Conservation Law Foundation–and I have heard about
negotiations
between
TransCanada and environmental groups on mitigation at Kibby. Both of these
projects
were in
protection zones, so mitigation may have been appropriate. But in MGN zones and
other
places
where there are not exceptionally rare habitat impacts, wind farms ought not to
be
expected
to help purchase conservation lands or do other types of mitigation. Wind farm
ARE
mitigation
for our energy consumption habits and for the impacts of fossil fuel
consumption.
They
should not be expected to pay any other fees “in mitigation” when
their major impact is so
positive.
This principle should be recognized in legislation.
I
understand that preserving Maine’s “quality of place” is an important
goal for your task force. I
fully
accept that having wind farms everywhere might ruin that quality. However, when
one
understands
the relative rarity of economically developable wind sites in Maine, this
concern
should
disappear. I estimate that less than 2% of this state has enough wind to
justify
development.
Most good wind sites are offshore and on high mountains. Offshore sites are not
economically
developable today or in the near future. Maine’s ten highest peaks are already
under
conservation protection, and because of proximity to the most special sections
of the
Appalachian
Trail many other high mountain sites are inappropriate or hard to develop. Of
the
remainder,
the vast majority are too far from transmission lines to be economic. In short,
Maine’s
“quality of place” can only be affected in a very small way by
commercial wind projects,
even if
one dislikes wind farms. I really do not feel that this issue needs any
recommendations.
There
is no doubt in my mind that the impacts of global climate change are many times
more
threatening
to “quality of place!”
Lastly,
I want to address what I understand is the inclination of your task force at
this stage of its
work:
to recommend a reassignment of regulatory responsibility between DEP and LURC
and
possibly
involving the PUC in some way. I fail to see how any change of this type could
be of
significant
benefit. I recognize that LURC feels overwhelmed by the volume of current
application
with three big wind farms and Plum Creek all at once. This may need attention,
but
it is a
short-term phenomenon. Don’t change the rules, provide the necessary resources.
The
Governor
can do that. Perhaps DEP staff can help LURC in the short term. But creating a
new
agency
or shifting responsibilities will, in actuality, make it harder for developers.
Now that
LURC
has had an intensive learning experience with wind power, it should be able to
marshal its
scarce
resources more sensibly and apply them where they are needed most.
I
believe that these recommendations for positive changes would make a difference
in wind
development
while protecting the environment and character of Maine. On the other hand,
please
do not just rearrange government agency responsibilities and think that any
meaningful
help
has been provided.
Thanks
for inviting these comments. I would be happy to try to help refine my points
if you feel
that
would help your task force.
Rob
Gardiner
*******
It’s naive or disengenuous of Mr. Colgan to portray Mr. King or any other industrial wind developer as being uninformed about the product they have worked so hard to sell. Maine citizens are learning the facts. It is hoped that our respected economists will do the same.
Karen Pease
Lexington Twp., Maine
Green Mountain Power’s Cow Power program, enables customers to purchase all or part of their electricity at a premium and support Vermont’s dairy farms. Killington Mt ski resort has announced that it is going to use Green Mountain energy to drive it’s K-1 Gondola ski lift this season. Anyone care to suggest other kinds of manure that could be used? Good bye industrial wind turbines.
The VT legislature tried and failed to close VT Yankee. Now VT gets no power from VY Yankee, they buy nuclear power from Seabrook instead. This “economist” should get his facts straight.
What really scares me is having an economist like Charles Colgan teach our young people economic theory. He is completely antithetical to solid economic reasoning, something that most of the liberal economists continue to try and push down our throats. He believes that imposing onerous taxes and fees on certain industries will level the playing field. This is communism. In a country where new and different industries are treated like that, every price goes up. Industries should be judged on their value to the customer, and the price set as to what the market will bear. If it is too expensive, it will die and something new will try and take its place. If it is subsidized, it will only increase the price and nothing new will come forth, forcing the customer to settle for something they don’t want, but are forced to pay for. We are a FREE MARKET country, or at least we were until the last decade or so, and especially the last four years. This is really simple, and should be what is taught to young entrepreneurs of today.
Let’s look at some of the issues Mr. Colgan raises.
First, look at the picture attached to the story. If you notice, the exhaust rising from the stacks is white, not grey or black. Coal fired plants have been forced to clean up their act over the last 20 years, and at great cost have done so. In spite of the huge expenditures, the energy they produce is still among the cheapest power we have. New England has very few coal fired plants.
Second, raising everyone else’s rates does NOTHING to reduce the high costs we pay here. Our costs are going up to pay for upgrades to our grid, a grid that is perfectly adequate to perform for us based on population expectations for the next forty years. The only thing that makes it unacceptable is trying to force huge amounts of wind power, power that is unreliable, skittering, pulsing and surging all the time. Our recent upgrade, $1.5 BILLION, is just a start, and it raised our rates for supply 20%. Iberdrola, the Spanish Wind company that now owns CMP, had told us we need further upgrades to the tune of $19 to $26 BILLION if we want to go further with wind. Just think how high our rates will go then!!! That is 20 times the current upgrade. Where is your economics now Mr. Colgan.
Third, the carbon tax is a scam. Nothing more needs to be said. It is the creation of non-scientists and non-economists like Al Gore and his ilk.
Fourth, Angus King set the whole Wind Scam in motion as he left office and turned things over to Baldacci. He has been involved in the wind business since 1989 when he founded Northeast Energy Management who championed tearing down our dams to make way for wind. He sold the company in 1994 and netted (after taxes) $8 million. This funded the carpetbagger’s run for Governor. On his way out the door of the Blaine House, he passed a bill that further set the course for wind. The bill set a goal to make Maine’s energy 30% renewable, but excluded hydro . . . . isn’t that interesting. Probably the cleanest, cheapest most environmentally friendly and totally renewable power source was excluded. He and his partner Rob Gardiner promptly opened up Independence Wind and petitioned the Baldacci regime for an open door to decimate our mountaintops. Please Professor Colgan. Do not try and minimize King’s participation.
Fourth, we are still watching some of the best power producers in our state ripped out. The dams in Old Town and Veazie, perfectly good and important to our state, are being torn out to restore sea run salmon and other fish to the Penobscot. There is no guarantee that the salmon will ever run up the river again, but there was a guarantee that those dams would have produced power, cheap and reliable, for the next hundred years. No one currently alive can ever remember a sea run salmon on the river. The dams have been there for more than 100 years. Building fish ladders around the dams would have been a cheaper and more energy saving alternative.
I think that Professor Colgan should recheck his facts and figures before diving head first into waters he has no idea how deep they are, especially for Mainers.
I always regarded Mr. Colgan as an ideologically driven buffoon and this piece proves it. It also proves the bias of the BDN against the Governor. Go to the video and listen to what the Governor has to say. It has nothing to do with coal and everything to do with choices we should make for Maine to improve it’s business competetiveness and to seek some relief for Maine consumers.
There is nothing about social costs of coal plants that will help us retian an excellent employer like Texas Instruments or Fairchild in South Portland, for example. These two companies provide thousands of high tech jobs and are huge users of electricity in their processes. They are coveted by any economic development entity anywhere else in the world. If we keep increasing the electricity rates from costly wind power, we drive these thousands of jobs away, replaced by a couple dozen turbine maintenance workers. What does economist Colgan have to say about that trade-off? That the turbine jobs are more valuable because they are “green” or they are wonderful because taxpayer subsidies help to pay for them?
Let’s get real, here. If we are smart, we will find a way to prosper by our position between one of the largest hydro projects in the world, Chruchill Falls, Laborador and the power hungry northeast USA urban region. Imagine steady revenue for the state and lower electricity rates and no useless wind turbines.
People tend to get all wound up about Canadian electricity. Let’s take a breath and think rationally for a minute:
1. We are not desperate for new electricity generation. We have plenty and the ISO-NE predicts no more than 1% annual demand growth for two decades. Yes some older and dirtier New England plants will need to close eventually. But those tend to be base load or peak load plants. Wind power is just an add-on that cannot provide either kind of power so it cannot replace or displace those plants. And more wind turbines means more natural gas plants. Big Hydro is Big Versatile. 2. Quebec and Labrador already have massive hydro resources that COULD satisfy New England states’ government Renewable Portfolio Standard (RPS) mandates. But we all exclude large hydro (100MW) from satisfying those mandates. 3. We would be the customer. If we negotiate a deal that is satisfactory to both customer and seller, so be it.4. 2/3 of Quebec homes heat with electricity. So Quebec has high electricity demand in winter, when our demand is low. Summer is our peak demand, so it is a match made in heaven. 5. Back to points 1 and 4: Large hydro can satisfy base load, peak load, and load following demands. Wind can do none of those. So if we intend to decommission an old base load coal plant, having an electric “pipeline” from Canada will be useful. Likewise, peak load plants like the Cousins Island oil fired plant are hardly ever used (Cousins Island is Maine’s largest generator yet in only produced .4% of Maine generation in 2011….at a sky-high cost to ratepayers of 61 cents per KwH!) Could Canadian hydro be relied upon to provide the occasional peak load on those hot days in August? Of course it could.6. Assuming New England states do not repeal their renewable portfolio mandates, would we rather build thousands of miserable wind towers over hundreds of Maine mountains, or would we rather have a power line provide real electricity at predictable schedules and rates? Yes, it’s time to take off the Boogy Man glasses and get real about our energy and environmental future.