PUC Terminated the Procurement!!
LS Power's Contract for this RFP has ended
This transmission line is dead! (For now)
The Maine PUC met at noon today to deliberate the procurement and contract issues with the Aroostook Renewable Gateway project. LS Power wanted a contract price change and the PUC said no.
You can watch the proceedings here:
The comments for this project begin at approximately the 8:00 mark.
I also transcribed the statements so you can read it if you’d prefer. Any transcription errors made are mine.
Commissioner Carrie Gilbert recused herself from the proceedings.
Commissioner Bartlett - On November 1, 2022 we approved term sheet for LS Power to build the transmission line. Subsequently, Massachusetts agreed to purchase up to 40% of the project and we issued an order on February 3, 2023 directing staff to negotiate a contract for the purchase of 60% of the project. Because significant differences have persisted among the parties and with staff, LS Power was directed to file a proposed transmission agreement which they've done, along with a brief and studies quantifying the benefits of a project. Unfortunately, LS power made clear in this submission that it can no longer hold to its price though nowhere in its brief or proposed transmission agreement did LS Power indicate what the new price would need to be. This is a non-starter. At a minimum any contract would need to be consistent with the terms in the term sheet and of course that includes the binding price contained therein. It would be fundamentally unfair to other bidders to permit any adjustment to price much less not specified one. By changing the price knowing that the commitments in the approved term sheet were binding, LS Power has effectively withdrawn its original bid. Accordingly, I would terminate the procurement.
The statute gives us authority to initiate a new procurement which we will do. In the meantime, we'll consider what changes, if any, could be made to the process to increase the likelihood of success.
I surely understand that this is a frustrating outcome for all involved but I do want to thank all the bidders who participated in this process as well as staff for their hard work and trying to bring a contract to fruition.
Commissioner Scully - I agree with Chair Bartlett. I conclude that we have no choice but to terminate this procurement as LS Power has withdrawn its commitment to a core component of this procurement and the LS term sheet, namely it's fixed price bid. And I agree with Chair Bartlett that proceeding with an unknown changed price would not only be unfair to bidders, but I believe it would be unfair to ratepayers as we have no assurance that the project remained the most cost-effective way to achieve the legislative goal. And so, while the price term is the basis for our decision today, I would also note that LS Power has in its proposed transmission agreement insisted on provisions regarding price and contingencies that would shift a substantial amount of risk and thus cost exposure to ratepayers, and I view those provisions as inconsistent with our RFP and inconsistent with the approved term sheet. I say that because I think it will be relevant and that that concern should be relevant as we proceed in the future with any new procurement.
Over 3,500 people received letters telling them their land was on or near this proposed transmission line. Some found out their land was targeted to “host” the line through friends, neighbors, and word of mouth, as they never received word directly from LS Power. We all spent countless hours learning about this project, the rights of landowners, the permitting process, legal options, and legislative options. Many towns put moratoriums in place and began or completed work on writing and voting ordinances into place regarding high voltage transmission lines. We need to continue this work, but we should all take some time to celebrate.
Now that we all have a better understanding of how easily the state can change our lives, we need to ensure this doesn’t happen again.