AUGUSTA, Maine -- Norwegian company Statoil announced on Tuesday that it was abandoning a proposed $120 million wind project off the coast of Maine, which industry officials once said could make Maine a leader in offshore wind power, after Republican Gov. Paul LePage's administration maneuvered to reopen the competitive bidding process.
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 said it was focusing on a project in Scotland while continuing to explore the United States' offshore wind market.
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."
In January, Statoil gained initial state regulatory approval for a 20-year contract with the state to put four wind turbines 12 miles off the coast. But the company 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 proposal. LePage opposed Statoil's project, saying it would push $200 million in costs onto ratepayers.
An Associated Press review of documents found the administration had also initially floated "a much more aggressive effort to explicitly void" Statoil's agreement even before its move to reopen bidding became public. 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.
The governor's top energy official said Tuesday that Statoil has long expressed concerns about the U.S. regulatory environment. He said it was prudent for the state to consider other proposals for a contract that will require a 20-year commitment from ratepayers.
"At this point, we still want to move forward with Maine's offshore wind industry in a manner that makes sense for ratepayers," said Patrick Woodcock, director of the governor's energy office. "At a time when our economy is struggling, we need to be certain that this investment will bring Maine's jobs along with it."
Statoil's decision to leave Maine means that the University of Maine's proposal is now the only project being considered for a state contract. While UMaine and its partner companies submitted a bid in August, their proposal remains confidential. The Public Utilities Commission recently ruled that the university must release some details by the end of this month.
Maine Aqua Ventus, the umbrella company that includes the university and the partner companies, said in a statement that it will continue pursuing its contract and remains committed to developing Maine's offshore wind potential.
But the lack of publicly available information about UMaine's proposal creates uncertainty about whether any contract will move forward, said Sean Mahoney, executive vice president and director of the Conservation Law Foundation of Maine.
"Without any information it's hard to know what the technical and financial capacity is for the UMaine proposal," Mahoney said.
Democratic Senate President Justin Alfond said that while he hopes the university's proposal will advance, he is fearful that the state could be left with no offshore wind projects.
"There's definitely a dark cloud over the state of Maine with Statoil leaving today," he said, "and I don't know if we ever recover fully from this in our offshore wind industry."