PORTLAND — Attorneys for Houlton’s municipal utility company and a group that advocates for lower energy prices argued before the state’s highest court on Wednesday that state regulators should have blocked a $333 million joint venture by Emera and First Wind.
The companies have since unwound that relationship, as part of renewable giant SunEdison’s purchase of First Wind, but the legal question remains alive: Can a company affiliated with a Maine transmission and distribution utility own power generators?
That has broader implications for investment in power generation in Maine, as Nova Scotia-based Emera and Central Maine Power Co. parent Iberdrola have interest in owning renewable and other power generation in the state.
Shortly after the Maine Public Utilities Commission approved the Emera and First Wind venture, the decision was appealed to the Maine Supreme Judicial Court by the Houlton Water Co., the Industrial Energy Consumers’ Group and the Office of the Public Advocate, which represents the interests of ratepayers in the state.
The appellants argued that the PUC approval violated the state’s landmark 2000 Electric Industry Restructuring Act, which prohibits utilities from owning both transmission and generation facilities because it could open the door to favorable treatment for such generators, which sell their power into a competitive regional market.
The court ruled unanimously in March 2014 that the PUC did not adequately determine when a financial relationship between a power generator and a transportation and distribution company provides an incentive for the utility to favor one power generator over another.
After the high court vacated the PUC’s approval, the commission reviewed the case again.
Then in October 2014, the PUC again approved Emera’s investment in First Wind, arguing that enough regulatory safeguards existed to assure utilities did not give preferential treatment to affiliated generators.
That decision prompted a second challenge from Houlton Water Co. In August 2015, while that appeal was pending, the PUC modified some of the conditions in its approval order. Houlton Water and IECG appealed that order too, according to court documents, and the appeals were consolidated.
Auburn attorney Benjamin J. Smith, arguing on behalf of the appellants on Wednesday, told the justices that the PUC had “abused the discretion entrusted to it, acted arbitrarily and capriciously, and failed to follow the mandate of the Legislature.”
Smith said that the PUC also “acted outside the bounds of its statutory authority and jurisdiction” when, as a basis for its decisions and orders, the commission imposed conditions “purporting to exercise jurisdiction over non-utilities and non-parties over which the commission has no statutory jurisdiction, including Emera Inc. and its affiliates and First Wind and its affiliates.”
During questioning of Smith, court justices touched on the fact that while that appeal was pending, the PUC modified some of the conditions in its approval order.
Smith told the justices that he believed the judiciary did have the authority in this case to step in and tell either the legislative or the executive branch that they could not act while an appeal was pending.
“I think the rule in this instance trumps the statute,” he said.
Attorneys Charles Cohen for the PUC and William Harwood for Emera denied the allegations made by Smith.
Cohen told the Law Court that questions about the joint venture between Emera Maine and First Wind were moot, because the partnership ended in November 2014 when the utility sold its interest back to the wind power developer for $223 million.
Cohen also argued in his brief to the Law Court that the “PUC did not exceed its authority or abuse its discretion through the imposition of conditions, which were found necessary to protect the interest of ratepayers.”
There is no timeline for which the justices have to rule.
BDN writer Darren Fishell contributed to this report.
