If costs get too high big customers can always walk

If costs get too high big customers
can always walk?

They certainly can self generate but will they get punished at the PUC?
     The high cost of electricity in eastern Maine is prompting a couple of major customers to bail on Bangor Hydro-Electric and the utility is fighting back in an attempt to keep them connected.
     The controversy highlights the latest push for onsite power in a state with a tradition of paper companies and other industrial users generating their own electricity.
     Eastern Maine Medical Center in Bangor filed with the state's health and human resources department for permission to build a 4.6 mw gas-fired cogen plant on the hospital's campus.
     The hospital now pays Bangor Hydro $3 million a year in T&D charges. EMMC estimated it could save $1 million a year, and help hold down costs for patients.
     Not so fast, Bangor Hydro told state regulators.
     The move will cost other customers money, the utility argued. It wants to charge the hospital $1.2 million a year in standby rates to make up for lost T&D revenue and grid hook-up fees.
     EMMC's consultants figure the standby rates should be closer to $385,000.
     The next step is for Bangor Hydro to file an application for standby rates at the Maine PUC.
     But now Bangor Hydro -- owned by Nova Scotia-based Emera -- is facing another potential hit. The University of Maine announced a similar plan for onsite power.
     The university is considering a 9-mw cogen plant on its Orono campus in hopes of saving $1 million a year and thus avoid a 2% rise in tuition.
     Meanwhile the state's Public Advocate worries that homeowners and businesses will be saddled with a higher percentage of the utility's fixed costs.
     Thus now pending at the Maine PUC is the question of whether big customers such as EMMC and the University of Maine will pay stranded costs to leave the grid.
     Originally published in Restructuring Today on March 15, 2005

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