A wind energy deal worth hundreds of millions of dollars is now in jeopardy because the Maine Public Utilities Commission erred in approving the venture.

In a recent article written by Naomi Schalit of the Maine Center for Public Interest Reporting, the reporter explained the complex deal, which amounted to $361 million in loans and investments: It would have seen wind developer First Wind ”“ with financial investments from utility companies Bangor Hydro and Maine Public Service, and Nova Scotia-based electric utilities owner Emera, Inc. ”“ build wind turbines across the region.

But earlier this month, Maine Supreme Judicial Court Chief Justice Leigh Saufley ruled that the PUC erred in approving the deal, because it violates the Restructuring Act. In her opinion, Saufley wrote that the PUC had determined that the transaction could be approved because the relationships between the companies did not amount to one company having a “controlling interest” in the other, but a “controlling interest” wasn’t the standard set by the law.

Saufley went on to say that the utilities involved have a financial interest that could provide an incentive to favor certain generators over others, and the companies would also have a competitive advantage over other generators in accessing transmission and distribution, “defeating the purposes of the Restructuring Act.”

It’s unfortunate for everyone involved that the deal is in jeopardy, but the responsibility lies with the PUC to get it right the first time, which it clearly did not.

The Restructuring Act was put in place so the PUC would have standards to protect consumers from companies having control of both the generation and the transmission and distribution of energy, much like other government agencies that regulate deals that create monopolies and unfair advantages in markets. Companies that both generate energy and then transmit and distribute that energy would have too much control over the market.

In Maine, due to the monopoly of electricity distribution, the PUC must approve the rates charged by utilities and regulate those companies. The act laid that out, as well as requiring the separation of generation and distribution. The statute is clear on the issue, stating: “… On or after March 1, 2000, an investor-owned transmission and distribution utility may not own, have a financial interest in or otherwise control generation or generation-related assets.”

Now that the court has ruled the wind deal violates the statute, the PUC has to reexamine the deal, using the court’s interpretation of the statute’s meaning, Saufley wrote in her opinion.

It remains unclear, however, if the deal is still valid, as it was completed with PUC approval back in 2012.

It’s important that these questions are answered swiftly and to the letter of the law ”“ according to the court, that is. It’s equally important that, going forward, the PUC be particularly careful when handling such issues so companies financial investments are not jeopardized in this manner.

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Today’s editorial was written by City Editor Robyn Burnham Rousseau on behalf of the Journal Tribune Editorial Board. Questions? Comments? Contact Managing Editor Kristen Schulze Muszynski by calling 282-1535, ext. 322, or via email at kristenm@journaltribune.com.