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Norway's Statoil pulls $120M wind project in Maine

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ALANNA DURKIN | October 15, 2013 03:48 PM EST | AP


AUGUSTA, Maine — AUGUSTA, Maine (AP) — Norwegian company Statoil announced on Tuesday that it's abandoning a proposed $120 million wind project off the coast of Maine after Republican Gov. Paul LePage's administration maneuvered to reopen the competitive bidding process for a contract with the state.

The company said in a statement that changes in terms with the state and scheduling delays "made the project outlook too uncertain to proceed." Statoil says it's now focusing on pursuing a project in Scotland that it also has been working on for the last three years.

Renewable energy industry officials, environmental groups and lawmakers said Tuesday that losing Statoil's project is a significant blow to the state's ability to cultivate an offshore wind industry and doesn't bode well for future investment in the state.

"As a state economy looking to attract investment, this is a sad day for Maine," said Jeremy Payne, executive director of the Maine Renewable Energy Association. "Anytime you have a huge international player that was looking to Maine as a potential host for its investment and it shifts course, that calls into question whether this is a hospitable place for any type of investment."

LePage's office did not immediately respond to requests for comment.

Statoil gained regulatory approval for its proposal to put four wind turbines 12 miles off the coast of Maine in January but put its project on hold in July after LePage signed legislation to reopen the competitive bidding process to allow the University of Maine to submit a bid. LePage opposed Statoil's project, saying the company would push $200 million in costs onto ratepayers.

An Associated Press review of documents found that the administration had also initially floated "a much more aggressive effort to explicitly void" Statoil's agreement. In effect, the state would limit the amount that home and business owners would pay for the project to about half of what Statoil had proposed.

Trine Ulla, head of business development for floating wind in Statoil, said that while Statoil is choosing to leave Maine, it is continuing to explore the U.S. offshore wind market.

"The U.S. holds several locations with good wind conditions, deep waters and proximity to load centers," she said in a statement.

Statoil's decision to leave Maine means that the University of Maine's proposal is the only offshore wind project being considered for a contract with the state. While UMaine and its partner companies submitted a bid in August, the proposal remains confidential. The PUC recently ruled that the university must release some details by the end of this month.

But the lack of information publicly available about UMaine's proposal creates much uncertainty about whether any contract will move forward, said Sean Mahoney, executive vice president and director of the Conservation Law Foundation of Maine

"We're left with a proposal that to do date nobody knows what it's going to do," Mahoney said. "Without any information it's hard to know what the technical and financial capacity is for the UMaine proposal."

Democratic Senate President Justin Alfond said that while he hopes the university's proposal will move forward, he is fearful that the state could be left with no offshore wind projects as a result of Statoil's decision to leave Maine.

"There's definitely a dark cloud over the state of Maine with Statoil leaving today, and I don't know if we ever recover fully from this in our offshore wind industry," he said.

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