How To Sign Maine Banking Medical History

How to industry sign banking maine medical history

pleasure to be here i trust you can hear me we can hear you good um to start with what's the role of public utilities commission in this whole process and the economic theory behind regulation is that some public functions are natural monopolies and therefore the price terms and service quality need some degree of government oversight so what i've shown here is is a little bit of history um the agency's been around for a little over 100 years interestingly uh even back in 1913 there was a recognition that it was useful to separate to some degree the political influence from the public utilities commission process the current structure recognizes that commissioners have six year staggered terms they can only be removed for cause they don't report to the governor and this indicates an understanding i think a correct understanding that sometimes the public utilities commission has to make decisions for example raising people's rates that may not be immediately politically popular and it's useful to have some degree of separation in my own experience i've done a lot of work in eastern europe and it is often the case there that the ministry or some other direct arm of the political structure controls the utilities commission or controls utilities and the virtually universal result is significant under investment um in the infrastructure which has led to a significant service quality degradation among other things maine like other most other states in the u.s requires that for major infrastructure projects particularly in transmission that the commission give permission to the utility to build it and this is understandable because utilities have a strong shareholder incentive to invest and therefore this particular level of oversight is considered to be useful it's not the only permit that's required others include the department of environmental protection army corps of engineers but it is the one without which the utility really can't move forward at all [Music] so the main step main law sets the standard for reviewing transmission projects um if you can read the standard it's 31 32 sub 6. principally it looks at economics but there is a laundry list of other factors to be considered some of them fairly recent conservation distributed generation non-transmission alternatives are relatively new things that the commission is to look at the commission's rules themselves focus on rate payer interest whether rate payers will benefit by the particular line that's how they have defined public need as public need is is incorporate into the statute interestingly in the statute there's no assignment of weights to any of those elements it's simply an admonition to the commission that it must look at those things and take them into account in some way also the the impact by the p when the poc is looking at impact it's looking at impact in maine um not elsewhere so in this particular case for example the fact that any cec would be very useful to massachusetts in massachusetts achieving its own carbon reducing goals was actually not given any weight at all by the commission the fact that massachusetts benefited was not weighed as a positive factor by the commission at all um the history of the case uh is pretty elaborate there there's close to 700 separate formal filings in this docket it was originally filed in 2017 very extensive process the utilities just to give you a flavor of how various parties lined up the utility sponsors obviously were in favor the business customers intervened principally through the industrial energy consumers group their typical interest is ensuring that benefits outweigh any costs and they have traditionally been quite hostile to the utilities the environmental non-government organizations were kind of divided here some saw significant carbon benefits others were concerned over the impact on other renewable providers and the effect on the forest generation owners were opposed since they would make less money if this project is built recreational interests the ones who were most directly impacted by this tended to oppose it the municipalities were mixed some were quite in favor some some were opposed chambers of commerce typically in favor labor unions typically in favor individuals who spoke up there's an opportunity for individual participation in the proceeding were generally opposed and they were generally opposed for reasons of aesthetics or what it would do to their particular activities the public advocate also intervened public advocate has a responsibility in maine of representing the interests of residential and small commercial consumers um and the governor's office was also an intervener in the case and i would say the public advocate in the governor's energy office were initially skeptical uh they wanted some evidence that this would actually be beneficial and finally the commission staff itself which reports to but is not specifically directed by the commission in terms of what it might want to say is very skilled very experienced staff and values its independence the commissioners the the tradition not just tradition it's it's the policy of the commission is that the commissioners want the best information possible from the staff and the staff's best judgment and then the commissioners decide for themselves based on that evidence and those recommendations what to do um and i will simply note that in the recommendation that was submitted by the staff in march of 2019 the the staff recommended that this the certificate be granted so here's the evidence that the commission relied upon a summary of it uh these the things in italics and this are in this um powerpoint are direct quotes from an order in in deciding to approve the necec request for a certificate and i think to summarize this the the commission recognized the basic economics of the transaction as it related to maine and that is that all of the costs of the line are paid for by somebody else they're paid for by massachusetts um interestingly the energy itself the power coming into to to the system to the extent it helps strengthen the system or actually turns on people's lights that energy also stays in maine massachusetts pays for it but the energy itself stays here assistant massachusetts pays for it and under massachusetts law you can get credit for the carbon reduction for anything delivered to the new england system um so i think what the commission reached the con the conclusion they reached to paraphrase a little bit is that from the perspective of an electricity customer the only possible consequence of the project was that their electricity costs would go down there's there's no possibility there's electricity costs go up so the commission saw its tasks given the statute to estimate the value of the customer benefits and determine whether they're whether there were other relevant benefits or costs and whether on balance the benefits outweighed any costs that it's that it found and as this conclusion shows the staff and the commission both reached the conclusion that there would be significant benefits and those outweighed any costs now this is a very short and grossly oversimplified uh chart showing why it is that electricity prices go down if the necec goes forward this is how the new england wholesale market works for every hour there are a number of generators who offer to provide power and they are ranked by cost by price in the wholesale market with what they bid so j in this example is bidding the highest cost and a is bidding the lowest where where the amount of generation that is offered meets the amount of demand for electricity and in electricity you have to have a man demand and supply match exactly all the time or the system collapses that sets the price and that's the price that everybody gets and the price that everybody pays in the wholesale market so in this case the demand means that the price bid by provider d is going to clear the market so when any cec comes in because of the nature of the contract with hydro quebec in massachusetts hydroquebec will come in at a very very low price with a bid they will probably bid zero almost all the time because it is never to their advantage not to run it is always their advantage to run they only get paid by massachusetts when they're actually running so essentially any cec if you think about this chart if you look back at a there would be an a sub prime to the left of the a on this map that would be right at the bottom of the chart and the width of that would be determined by the amount of energy they were putting in which is substantial and everybody would shift to the right so if the demand doesn't change in this example it's more likely than not that provider c would be setting the price which is a lower price and that's what produces you know savings for everybody in the wholesale market now wholesale market and retail markets are very closely connected it's not an immediate translation but in essence if you see a saving in the wholesale market you will see a saving the retail market so this is the source a an estimation done by a variety of people i'll touch on the moment of how much saving you would have from this project over time that's what then in turn feeds into the the uh part of the analysis that ryan was doing in terms of the benefits for maine and this is just a summary of the uh that was prepared by lei london economics as to what those savings would be in each year of the project again assuming here the project started and started operating in 2023 and the different colors just represent different areas of maine but in essence the savings you know are in the multi-million category every year now the the when the commission was doing its its analysis the project and evaluation the evidence they had evidence presented by daymark which was a firm hired by the proponents by evangrid but the commission also wanted its own assessment so it hired london economics and london economics looked at the price impacts the day market put forward and frankly it found they were somewhat lower than what daymark had proposed and a lot of this has to do with their estimate of what costs how the market would behave in the future in my experience london economics has traditionally made estimates that for lack of a better word are unfriendly to utilities they're perfectly reasonable and they tend to be fair but they are certainly not shills for the utilities and that's why the utility that's why the commission has hired them many times over the years to give sort of a skeptical view as to what the utilities are putting forward what they found here was that the benefits were less than what daymark had proposed but still quite substantial they found electricity market benefits in the range of 33 million dollars a year um the commission also hired london economics to look at the uh university southern maine analysis in terms of these ripple effects the macroeconomic effects and here they came very close to what university of southern maine found again it was just another opportunity for them to take an independent view of the commission take an independent view and again the numbers are telling the commission that there are some significant monetary benefits flowing into maine out of the project many of which will accrue to electricity customers who if you look back at the statute and the main rules are the things that the commission should care about when it's trying to determine whether to approve a project but there are other things the commission had to look at as well and one of them was community impacts and these for example are the impact on scenic historic and recreational values interestingly here the commission wasn't able to come up with a number for what they were worth it just didn't have a specific number but it did conclude that those values would not exceed or reach the level of benefit so that when the commission was doing its balancing act it would it could it in fact concluded that on balance the project should go forward even taking into account the fact that there were some harms identifiable harms to recreational interests and scenic issues the commission did not specifically rely on what the department of environmental protection was doing but it was aware of that process it expected some mitigation efforts to be undertaken and in fact the dep did under did require some very substantial mitigation efforts including you know conservation easement on forty thousand acres and uh narrowing the limit to the corridor in some in some areas now the other issue another issue the commission is tasked to consider was was whether there would be an effect on the environment what the overall environmental effect would be and there were a couple elements aspects of this one of them was would it reduce carbon and the commission concluded based on the evidence that was in front of it um that there would be a significant reduction in carbon emissions they estimated three to three and a half million metric tons a year by virtue of introducing hydro and the reason that that happens if you think back to the bid stack the the unit that's being knocked off the stock stack that's not running or is running less is almost certainly going to be oil or natural gas or coal so nuclear is going to nuclearize bids very cheap and that's going to run other renewables run very cheap and they're going to run so what doesn't run at the margin is going to be the carbon resources and that's the basis for the conclusion that there was three to three and a half million metric tons of carbon saving as a result of this project going forward the second element of the environmental issue is the concern raised by some principally the environmental or the the renewable energy producers in maine existing or prospective who were concerned that they would lose an opportunity to bring projects forward that somehow there wouldn't be enough headroom either in the transmission system or in the main portfolio requirement to accommodate uh what they wanted to bring out and what the conclusion what the commission found here again based on a lot of evidence was that in fact this project would probably improve their situation vis-a-vis transmission because it actually relieves some of the constraints that otherwise existed in the system and that there was plenty of headroom in terms of main policy for bringing on additional renewables for one thing this particular project doesn't even qualify for the main portfolio standard so it doesn't take up any room in that standard at all and beyond that it it seemed to the commission that it might not be a great idea to say that you know something good might come down the road in the future so we're going to ignore something good that's in front of us today um i think my work in the climate change council or climate change working group has suggested that there is a great deal that needs to be done to help maine's climate to reach maine's climate goals and that this project by no means exhausts what has to be done there indeed there's a huge amount more that needs to be done so that so again the commission concluded it just wasn't um it wasn't was not persuaded that this would be an impediment uh to the further development of the renewable providers in maine there was also opposition um from other generators including fossil generators in maine who said that you know we're not going to make as much money which is true and therefore you shouldn't allow the project because if we don't make enough money we may go away that'll hurt reliability uh we'll retire um and the commission was was unpersuaded by this as well it said listen there are a lot of other things going on as to why you might retire in fact you already claimed before this project was ever announced that you might have to retire for completely different reasons and again beyond that um it isn't the commission's job according to the commission to worry about providers who might be priced out of the market because someone else has a cheaper product to sell or because someone else has taken advantage of a of an opportunity to sell into massachusetts so you know as i said the commission is interested in in maine customers um probably it's a paramo nt matter now there was a stipulation entered into this case and and the stipulation came in very late in the case and it essentially amounted to an agreement among many of the parties in the case but not all that if certain conditions were met then they would support the grant of the certificate and the parties included the utility clearly the public advocate governor's office the industrial consumers conservation law foundation acadia center western maine mountains river corp the town of lewiston the chamber ibew and friends of maine mountains so it was sort of a pretty broad cross-section and it touched on all of the interests that had come forward it was the stipulation was opposed in other words people said notwithstanding the stipulation the commission should not grant the certificate by the pretty much the same people who had been most vocal in their opposition during the case principally the generator interests some environmental groups and some of the local residents and recreational interests the benefits of the stipulation fall into a couple categories a fair amount of money into rate reductions both low income and more general some money for what i would characterize as beneficial electricity uses such as heat pumps and electric vehicles some amount for support for local communities and interestingly the the recent agreement between hydro quebec and the governor's office and others that gary mentioned actually brings these benefits forward they originally contemplated to start in 2023 they will now start in later this year and one of that was something that was urged upon hydroquebec by the governor uh in part in recognition of the rather difficult economic situation that maine finds itself in so most of the money that's shown in this chart will actually start flowing as early as october of this year so the overall conclusion the commission was we should grant the certificate interestingly they said that even without the benefits that were articulated in the in the stipulation the project met the standard of for approval so even though they said yes those are nice they but they also said they were not necessary for decisions the case was appealed to the law court um and the law court essentially found the commission did not make any errors of law or any errors of fact that the commission had acted consistent within its rules and within the law they did not they heard and rejected all of the arguments uh made by the appellants which were very similar to the ones in the in the case itself um noted that it didn't rely on the stipulation so any concerns that about the validity of the stipulation were not relevant um and that it followed the right procedure and and there was sufficient evidence according to the court for the commission to reach its decision so that i would be pleased to answer any questions you