Northeast Utilities, the Hartford-based company planning to merge with Boston-based NStar, wants authorities to amend state law so that Canadian hydropower would count toward the utility’s renewable energy quota, according to the company’s CEO.
In Massachusetts and other New England states, large-scale hydropower does not count toward the renewable power quotas that utilities must meet.
In Massachusetts, utilities must buy 5 percent of their power supply from qualified renewable sources this year, a figure set to rise by 1 percent a year under the state’s Renewable Portfolio Standard (RPS). Other New England states also have their own versions of a renewable energy requirement for utilities.
Speaking to Northeast Utilities employees on Tuesday, CEO Charles Shivery signaled that the company wants authorities to change these rules, so that hydropower the company hopes to bring in from Canada will qualify.
“If we can ever convince them to change the definition, it’ll help us meet the RPS goals,” Shivery said, according to a transcript filed with the U.S. Securities and Exchange Commission.
Northeast Utilities and NStar plan to build a $1.1 billion transmission line that would bring hydropower from Quebec to New England by 2015, a project that preceded the merger announcement this week.
The power for the 1,200-megawatt line would be produced by Hydro−Québec, a government-owned corporation in Montreal that has nearly 35,000 megawatts of hydroelectric generation.
Changing the renewable energy definition in Massachusetts to include large hydropower would require an act of the state Legislature, said Lisa Capone, spokesman for the state Executive Office of Energy and Environmental Affairs.
The purpose of the requirement is “to provide incentives for new sources of renewable power that need incentivizing,” Capone said. “Large, established hydropower is not seen as needing that financial assistance.”
Environmental advocates also say that large hydropower isn’t as clean as renewable sources like wind and solar, and that New England would lose the economic benefits associated with new clean energy projects if large hydropower from Canada was eligible.
“It’s very important to realize this is not a replacement for building renewable energy in New England,” said Seth Kaplan, vice president for policy and climate advocacy at the Boston-based Conservation Law Foundation.
The merger between Northeast Utilities (NYSE: NU) and NStar (NYSE: NST), under the Northeast Utilities name, would create a company with an enterprise value of $17.5 billion. The merger needs approvals from shareholders and regulators, which the companies expect to be complete by the end of 2011.
The utilities say their planned Northern Pass Transmission Line could carry enough hydropower to electrify 1 million New England homes. Construction on the line is expected to start in late 2012 or early 2013, with power expected to flow in the second half of 2015.
At NStar, however, spokesman Caroline Allen said the utility has no plans to pursue changes to the Massachusetts renewable power requirement to favor large hydropower.
“It is up to policy makers to set policy,” she wrote in an e-mail.
Canadian hydropower has become an issue in the Massachusetts governor’s race, with Republican gubernatorial candidate Charlie Baker saying that Gov. Deval Patrick should have focused on bringing it to Massachusetts, instead of working to support the proposed Cape Wind offshore wind farm in Nantucket Sound.
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