Canadian firm offers New England more hydropower 

A Canadian utility wants to transmit large amounts of energy from remote hydroelectric dams in Quebec to New England, an effort that comes as concerns over climate change prompt environmentalists and policy makers to reexamine the power source long vilified for its harm to wildlife and waterways.

Hydropower is inexpensive, making it attractive in Massachusetts, a state with some of the nation’s highest electricity rates, but there is debate over whether it should be eligible for state financial incentives awarded to renewable energy projects.

The issue is now percolating in the Massachusetts gubernatorial race and this week took on new urgency after NStar and Northeast Utilities announced a proposed merger and declared a strategy of importing renewable energy from distant places, including Quebec.

Republican candidate Charles D. Baker and Governor Deval Patrick, a Democrat, agree that “big hydro’’ will be an important part of the Massachusetts effort to lower greenhouse gas emissions.

But Baker wants to formally declare the plants as “renewable’’ so that hydropower would count toward meeting the state’s requirement that utilities purchase increasing amounts of renewable energy. This also would allow the plants to qualify for valuable green financial credits.

Patrick and many environmentalists oppose this step, saying hydropower does not need financial help and that such subsidies could kill efforts to build a renewable energy industry in Massachusetts. An influx of hydropower is unlikely to affect the controversial Cape Wind project in Nantucket Sound because it is so far along in its regulatory approvals.

“It does not make sense to give renewable energy incentives to a foreign-owned enterprise for something that needs no subsidy,’’ Patrick said in a statement to the Globe. “It would amount to a windfall of hundreds of millions of dollars for Canadian ratepayers at the expense of Massachusetts customers.’’

Baker, who has used the promise of inexpensive hydropower from Canada to argue against Cape Wind, said he sees hydropower as critical for bringing down electricity costs.

“It’s a proven renewable, sustainable and competitive alternative energy source,’’ Baker said in an interview. “My view is we could be talking about four or five times’’ the energy the state would get from Cape Wind and “get it cheaper,’’ he said.

Today, Hydro-Quebec provides about 8.5 percent of New England’s power; the utility wants to bump that up to around 10 to 12 percent, according to Christian Brosseau, president of Hydro-Quebec US. Much of that power would be imported through a long-planned $1.1 billion transmission line through New Hampshire. Hydro-Quebec is building more dam complexes in Quebec. But state officials and environmentalists are struggling to decide how green large-scale hydropower really is.

In the early 1990s, New York state canceled a large power contract with Hydro-Quebec after reports that its giant dams had destroyed river ecosystems, drowned large swaths of forest, and harmed native peoples. Since then, however, the giant utility has worked with – and compensated – local communities affected by dams and says it has strived to lessen its environmental impact. Among other things, the company has built fish and wetland restoration areas and eel passages.

Few environmentalists wholeheartedly embrace hydropower, but many say it’s become necessary to reexamine the water-based power source because of the threat of climate change caused by humans and the lack of progress toward reducing the use of fossil fuels. Still, many questions are unanswered, such as the amount of greenhouse gases released from trees that decay once they are submerged under reservoirs created by dams.

“Large-scale hydro has significant environmental impacts,’’ said Sandra Levine of the Conservation Law Foundation, an advocacy group that is part of a coalition reexamining hydropower in Quebec that includes the Pew Environment Group and two Canadian organizations. “Climate change is becoming a more significant issue. The question is: How do we provide power in the least environmentally damaging way possible?’’

Earlier this year, Vermont became the first state in the country to recognize large-scale hydropower as renewable, a public relations coup for Hydro-Quebec.

In Massachusetts, technologies that meet the state’s legal definition of renewables can receive financial incentives, known as renewable energy certificates, which can be worth up to six cents per kilowatt hour. Today, hydropower projects of up to 25 megawatts are eligible for the incentives if they don’t interrupt water flow or interfere with fish passage, state officials say.

Ian Bowles, the state’s energy and environmental affairs secretary, said hydropower – even if it’s not classified as renewable – will help the state meet its goal of lowering greenhouse gases 10 to 25 percent from 1990 levels by 2020. But the financial credits were designed to help renewable energy technologies that otherwise could not compete with lower-cost fossil fuels, he said. Big hydro, he said, can compete without a subsidy. “Hydro-Quebec is a mature technology; it doesn’t need this,’’ Bowles said.

But Caroline Allen, a spokeswoman for NStar, said it is time to revisit the hydropower restriction, as well as the state’s renewable energy targets, “to balance the environmental concerns with economic concerns.’’

Some energy analysts, however, say if hydropower received financial incentives it would probably mean renewable energy projects in the state would not get built because power imported by Hydro-Quebec would reduce demand for them.

“Hydro is going to need to play a significant role,’’ said Derek Murrow, energy and climate policy director for Environment Northeast, a research and advocacy group. “But we need to make sure it doesn’t crowd out other renewables. It should only crowd out fossil fuels.’’