Hydroelectric companies will eventually fight with each other for a piece of Massachusetts’ power market, but first they are teaming up to make sure they can get significant amounts of their energy into the state at all.
The rivals united to form the Massachusetts Clean Electricity Partnership, a group that will formally launch its marketing efforts this week. Their focus: making sure Governor Charlie Baker’s pro-hydro bill, or some version of it, makes it through the Legislature this year.
“Everyone is aligned that we need to get that legislation first,” said Donald Jessome, chief executive of Transmission Developers Inc., which wants to build a power line through Vermont to connect with Canada’s large electric dams. “We will compete after that [but] we need to have a common voice going into these meetings.”
The new coalition underscores the billions of dollars that are at stake as lawmakers debate bills that would spur the state’s two big electric utilities to enter into long-term contracts with clean-energy providers, such as owners of large dams in Canada and wind farms in Maine and upstate New York.
Proponents say hydroelectric power offers three key benefits: stabilizing electricity prices for the long haul, helping the state reach its greenhouse gas reduction targets for 2020, and improving the regional power grid’s reliability by replacing older power plants that are shutting down.
Baker filed a bill last summer that calls for contracts that would bring as much as 2,400 megawatts into the state, and he made this initiative a key part of his State of the Commonwealth address last month. The House and the Senate have yet to hold votes for their own versions of the bill.
Long-term contracts could be used to land financing for a power project but the utilities – namely, Eversource Energy and National Grid – aren’t likely to enter into these contracts unless they’re given the legislative authorization to do so.
The new group includes hydroelectric producers Brookfield Renewable Energy Partners, NB Power, Hydro-Quebec and Nalcor Energy, as well as wind farm developer SunEdison. Power-line developers TDI and Emera are also in this alliance with the hydro companies to lobby for this bill. A new transmission line or two would be needed to get much of this electricity from Canada into southern New England.
This partnership launch, to some extent, mirrors the creation of a similar group last year, called Offshore Wind MA. That group – consisting of three rival wind farm developers – is seeking a long-term contract requirement from lawmakers for windmills to be built in waters south of New England.
The emergence of the hydropower-transmission alliance comes just days after a variety of energy companies – including most members of the new alliance – filed dozens of proposals to supply clean energy to southern New England. The bidding process is unusual because it is being handled by officials in three states: Connecticut, Massachusetts, and Rhode Island.
The amount of power to be procured through this process is small in comparison to what the Baker bill would draw to the state. With not much more than 500 megawatts expected, it would be on about the same scale as the Pilgrim nuclear power plant in Plymouth, which will be retired by mid-2019.
Janet Gail Besser, vice president of government affairs with the Northeast Clean Energy Council, said the formation of the hydropower alliance and the flurry of submissions in the three-state process show widespread interest in the industry in some form of long-term contract legislation.
“These are all indications that there’s going to be a nice competitive market,” she said. “Once the policy is there, then they can all compete with each other and the best projects can win.”
But the pending legislation on Beacon Hill will still face resistance from existing power plant owners, who argue it would give big hydro and wind players an unfair advantage.
“They’re looking for what I consider to be a sweetheart deal,” said Dan Dolan, president of the New England Power Generators Association. “I have no problem with hydro. I just don’t want to give away the market to them.”
Dolan’s group argues that ratepayers in Massachusetts would spend hundreds of millions of dollars a year above existing market prices to help subsidize these new hydropower contracts.
But Jessome, the power-line developer, said locking in prices for 20 years or so ensures price stability for the long run, helping to curb some of the volatility of New England’s electricity market.
The Conservation Law Foundation is also expected to scrutinize the legislation. The Boston-based group has already found one big criticism with Baker’s bill: It doesn’t provide enough of a guarantee that onshore wind farms will be used alongside the Canadian hydropower.
“The governor’s bill makes hydro a certainty and wind a possibility,” CLF vice president Greg Cunningham said. “The priorities are backward there.”
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