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Little money expected for alternative energy

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STEPHEN SINGER | March 25, 2010 06:15 PM EST | AP

HARTFORD, Conn. — The head of New England's power grid said Thursday that alternative energy is popular but is not being funded, leading to uncertainty in the market.

Gordon van Welie, president and chief executive officer of ISO-New England in Holyoke, Mass., said in a media briefing that it's not clear where markets are headed in the use of renewable energy.

"There's a lot of rhetoric about renewable, especially wind," he said.

However, sufficient funding is uncertain, van Welie said.

He also said he doesn't believe nuclear power will soon be part of the energy mix.

Van Welie said he believes facilities will be built for natural gas because it's one of the cheapest resources.

Many oil-burning power plants in New England are about 40 years old and will likely be replaced in the next two decades, he said.

"The single greatest issue facing the operation, expansion, and regulation of the power system is the uncertainty about national energy policy," he said.

Congress has been considering major changes to the electricity industry to quicken the pace of development of cleaner power sources, reduce their affect on climate and use power more efficiently, he said. But final decisions have yet to be made and debate continues, he said.

"As the industry awaits federal policy direction, it is likely that a lot of investment could be on hold," van Welie said.

Governors of the six New England states asked the ISO to help create a regional blueprint for integrating renewable resources, van Welie said. A study by the power grid operator found that up to 12,000 megawatts of wind power could potentially be developed in the region, but it is pricey.

Under one possibility, adding about 8,500 megawatts of wind energy in New England, and from Canada would require about $10 billion in new transmission infrastructure, he said.

Stephen J. Rourke, vice president of system planning for ISO-New England, said nearly 10,000 megawatts of potential new resources – in natural gas and wind – represents a potential one-third increase from current levels.

In New Hampshire, for example, proposals account for about 500 megawatts of new power generation, with about 400 megawatts for wood burning plants and wind projects in Coos County, he said.

However, in Vermont, an assessment by ISO found "potential reliability problems," he said.

Under certain conditions, transmission lines in the state could become overloaded with more electricity than they were designed to carry, which can damage the lines, Rourke said. In addition, if the Vermont Yankee nuclear plant shuts, more "system vulnerabilities" would affect Vermont and some surrounding areas, including portions of New Hampshire and north-central Massachusetts, he said.

The Vermont Senate voted Feb. 24 to block Yankee Power, the state's only nuclear plant, from operating after its license expires in 2012.

(This version CORRECTS name of ISO-New England head to van Welie.)