A few hundred hours a year during the hottest afternoons in the summer months, when air conditioning is operating at full blast, Maine’s Boothbay peninsula comes close to critically straining the area’s electricity transmission lines. One option to avoid potential power outages was an $18 million upgrade of existing transmission lines so they could handle peak demand. But several years ago the Maine Public Utilities Commission instead approved an innovative pilot project that flips the conventional transmission solution around: meeting demand by generating power and improving energy efficiency right in Boothbay. The Boothbay Smart Grid Reliability Project is now fully operational and is proving that local energy resources can provide electrical services traditionally delivered by utilities.
The Boothbay pilot is first of its kind in Maine, and one of several “non-transmission alternatives” (NTA) pilots in the Northeast. NTAs can include local energy resources like energy efficiency, demand response, smart grid technologies, and small scale, clean distributed generation. Adopted alone or in combination, they can replace or defer the need for new transmission lines. In this way, NTAs also address concerns over the land use impacts of new lines. Contracted by the Maine Public Utilities Commission to oversee the pilot, GridSolar, LLC has positioned a total of 1,677 kilowatts of NTAs on the Boothbay Peninsular and is able to activate these resources as necessary to reduce stress on the grid and ensure grid reliability. The pilot includes five categories of NTAs: energy efficiency (243 kW), solar photovoltaics (PV) (308 kW), back-up generation (500 kW), demand response and peak load shifting (252 kW), and energy storage (500 kW). From its control center in Portland, GridSolar can dispatch these resources within 5 minutes to reduce the amount of power imported into Boothbay during peak hours.
The cost of the Boothbay Pilot Project is less than one-third of the $18 million estimated cost of the transmission line originally proposed by Central Maine Power. GridSolar estimates that the total savings to Maine ratepayers will be greater than $12 million. The long sprawling fingers of the Boothbay Peninsula make it particularly expensive to build transmission lines, improving the economics of the pilot project.
Boothbay Harbor, Maine
Despite the compelling economics of the Boothbay pilot, widespread use of NTAs faces several obstacles. Financial incentives are skewed in favor of transmission companies, which can earn a higher rate of return (13%) to build transmission lines than to invest in cleaner, lower cost options. In New England, the costs of paying for transmission projects are spread across all 6 states, while lower cost local options are rarely considered and not eligible for this type of regional cost recovery.
Maine is on the leading edge of changing the system to level the playing field for local energy resources, and various stakeholders are taking steps to change traditional ideas about the power grid and provide a different view of how to solve the state’s energy challenges. In October 2015, the Maine PUC proposed hiring a competitively-selected, independent NTA Coordinator that would be responsible for working with the transmission and distribution utility to identify and analyze NTA opportunities, pursue solutions, solicit and select proposals, and operate NTA resources. The PUC also proposed establishing an NTA Advisory Group that would review 10 year distribution and transmission plans and report back to the Commission. In December the PUC announced that it will continue to advance the concept of the NTA Coordinator in an adjudicatory proceeding. The Commission has also started analyzing whether NTAs can be used to address reliability needs in Maine’s Mid-Coast region.
Maine’s experience demonstrates that opening up the existing utility system to market forces can accelerate NTA integration, growth, completion, and innovation- all to the benefit of Maine ratepayers. The model of building very costly transmission infrastructure for brief periods of peak demand should not survive forever. States across the Northeast are asking utilities to actively incorporate clean, low cost local energy resources into their power grid planning, but reforming utilities’ financial incentives will be necessary to see widespread change.
Abigail Anthony leads Acadia Center’s Grid Modernization and Utility Reform initiative, focusing on changing regulatory and economic incentives in order to achieve a sustainable and consumer-friendly energy system. A Rhode Island native, Abigail is director of the Providence office and has played a leading role in advancing the state’s energy efficiency procurement policies.