Hydro-Quebec says two other Mass. clean energy bidders still want to move forward 

CONCORD – What a difference a week makes.

Last Thursday, Northern Pass was selected as the only bidder of 46 to be given the green light to negotiate with Massachusetts electric utilities on a 20-year contract for 1,200 megawatts of clean energy.

One week later state regulators in New Hampshire denied Northern Pass’s application to build a $1.6 billion, 192-mile transmission line to transport Hydro-Quebec electricity to the Commonwealth.

Northern Pass, first proposed in 2010, partnered with Hydro-Quebec in winning the Massachusetts contract, but the Crowne company also worked with two other bidders – TDI Inc. and Central Maine Power.

Northern Pass and Hydro-Quebec have a Transmission Service Agreement, unlike the other two bidders, but the agreement would need to change due to the Massachusetts contract.

Lynn St-Laurent of Hydro-Quebec said the two projects continue to be interested in moving forward after the New Hampshire decision.

“We’re waiting to see what happens, we knew there were risks,” she said, noting Massachusetts sent a clear signal that Hydro-Quebec power would help satisfy its clean energy goals.

“We are still very much interested in exporting electricity to Massachusetts,” St-Laurent said. “We have a clean, reliable, easily dispatchable energy with a foreseeable cost.”
She said Hydro-Quebec believed it had three solid proposals for the Massachusetts program with proven energy leaders.

“We are in the wait and see position right now,” St-Laurent said. She said the Northern Pass project was further along with an in-service date of 2020.

“We need to see what is going to happen,” St-Laurent said, “to see if the in-service date 2020 still holds.”

The company did say in a prepared statement that it remains committed to Northern Pass and it is too early to speculate what the effects of the Site Evaluation Committee’s decision will be.

The company’s own transmission line to connect to Northern Pass was recently approved by the province and is waiting for federal approval, St-Laurent said.

Northern Pass has 30 days after the Site Evaluation Committee issues a written decision to ask for reconsideration. The committee’s deadline is the end of March but it could issue a decision sooner.

Appeals

If the SEC denies the request, Northern Pass has said it will appeal the decision to the state Supreme Court.

Most appeals of regulatory board decisions take at least a year before a decision is issued, said SEC legal counsel Michael Iacopino.

Northern Pass spokesman Martin Murray said Friday the company will file for reconsideration.

“Obviously we were quite surprised by the SEC’s decision and the seemingly hasty manner in which it was made,” Murray said. “Most surprising, it was made without considering two of the four criteria to move forward.”

In rejecting the application, the seven-member committee said project developer Eversource failed to meet its burden of proof that the project would not negatively impact the orderly development of the region, one of four criteria that must be met for approval.

The committee said the project’s expert witnesses did not convince the panel the project would not adversely impact tourism, property values or be inconsistent with the 31 host communities’ master plans and zoning ordinances.

Incentives off table?

The project included incentives that were contingent on its success and some are concerned those programs will fall by the wayside.

Eversource would have invested in the North Country through its $200 million Forward NH economic development fund, and $7.5 million North Country Job Creation Fund.

Murray said those funds unfortunately depend on the success of the project. He noted some expenditures have been made from the jobs funds.

Les Otten who is redeveloping the Balsams resort told state regulators he received a $5 million loan from the Forward NH fund that he intends to repay.

Eversource had also agreed to upgrade the Coos Loop transmission line – a project that is projected to cost $50 million so additional wind and solar generating projects could move their electricity onto the Northern Grid.

The current transmission system is at capacity. Murray said that project depends on the success of Northern Pass.

As of Sept. 3, Eversource had spent $249 million on Northern Pass, including $2 million for the Counsel for the Public and its experts, more than $1 million to the Department of Environmental Services for permit fees and $600,000 to the Site Evaluation Committee in applications fees, according to Murray.

Massachusetts monitoring

Massachusetts energy officials are monitoring the New Hampshire developments.

The Mass. Office of Energy and Environmental Affairs officials said they will “monitor and evaluate” the Site Evaluation Committee’s decision.

In announcing the selection, Massachusetts energy officials said one of the key reasons was Northern Pass’ ability to begin operations in 2020, at least two years earlier than other proposals.

“Massachusetts’ recently selected clean energy procurement project remains conditional on necessary siting approvals and EEA will continue to monitor and evaluate developments in New Hampshire as the administration works to ensure a clean and affordable energy future that progresses toward greenhouse gas emissions reductions,” said Peter Lorenz, Mass. EEA Communications Director in an email.

Massachusetts Attorney General Maura Healey who under the state law establishing the clean energy program is to review the award, said energy officials may want to reevaluate their decision.

While the denial has plunged the project and the Massachusetts contract into uncertainty, there is little uncertainty among opponents of the project who cheered the SEC’s unexpected decision Thursday.

Long-time Lancaster realtor Peter Powell said the decision should restore people’s faith that government can work on behalf of people and in their interests.

“We know this probably isn’t entirely over,” Powell said, “but we feel very confident about it. We are reinforced by the great decision, it is a good one and well-founded.”

Working on behalf of the people is a good thing and a wonderful thing, he said. “I really applaud the SEC for going through this very difficult process and making a simple and direct decision.”

He said there has been so much misinformation about the project and what Northern Pass would and would not accomplish.

“This is not the only act in town,” Powell said, “but it is the most abusive one for much of New Hampshire and least beneficial because of the cost we would have to incur individually and as communities.”

Powell testified during adjudicative hearings contradicting Northern Pass’s real estate expert who said the project would not affect property values except for a few abutting or encumbered by the utility right-of-way where the new transmission line would be located.

Credibility

The lack of credibility of Northern Pass’s expert witnesses on property values and tourism were reasons several members of the SEC gave for finding the company did not meet its burden of proof the project would not adversely affect the region.

Powell told the committee the proposal itself had lowered property values where the line would be visible, sending potential buyers to other areas of the state and to other states.

The property appraisal business is not cut and dry, he said, noting you have to use good information not just information that supports the conclusion you want to reach.

There are no high-voltage transmission lines in the North Country so it is impossible to understand how that would impact property values.

“All real estate is local just like politics,” Powell said. “They were not familiar with the marketplace.”

The site evaluation law establishes four criteria that must be met before a permit is issued:

*The applicant has the financial, technical and managerial capability to construct and operate the facility in compliance with the certificate’s terms and conditions;

*The site and facility will not interfere with the region’s orderly development with consideration given to the opinions of local and regional planning commissions and municipal governments;

*The site and facility will not have an unreasonable adverse effect on aesthetics, historic sites, air and water quality, the natural environment, and public health and safety;

*And issuing a certificate will serve the public interest.

The SEC earlier in the week concluded Eversource has the financial, technical and managerial capability and experience to construct Northern Pass.

On Thursday the SEC members said the project does not meet the criteria that it not negatively impact orderly development of the region and voted the project down on a 7-0 vote.