Hydro-Quebec withheld power from Massachusetts during a January cold snap, shortly after a new power line was completed in Maine to bring that electricity here.
Now, the Quebec energy company is sparring in court with the state’s publicly traded utilities over who should pay for that surprising interruption.
Eversource, National Grid, and Unitil sued Hydro-Quebec in Boston federal court on Tuesday, claiming they are well within their rights to withhold $40 million in payments to Hydro-Quebec after they unexpectedly had to turn to other sources of power during that frigid time. Hydro-Quebec, meanwhile sued the utilities that same day, saying they are wrong, and wants to be paid what it says it’s owed.
The companies tried to negotiate a deal before heading to court, to no avail. The core of the legal debate: whether a “force majeure” clause in Hydro-Quebec’s utility contracts allowed it to withhold power to protect residents and businesses in its home province of Quebec. Hydro-Quebec argues yes, of course it does, while the utilities say no way.
Both sides now want this to be ironed out under the review of a federal judge. It’s not only about which companies get to keep the $40 million. The fight’s also about how this clause and similar extreme events get treated for the rest of the 20-year contracts between the utilities and the hydroelectricity provider.
The fight’s about something else as well: a cornerstone of the state’s clean-energy future. In 2016, Massachusetts legislators passed a law that prompted bids to procure hydropower from Canada and build a power line to bring it here. That process eventually led to the construction of New England Clean Energy Connect, an Avangrid-developed power line through western Maine that ended up costing $1.6 billion, with the Massachusetts utility contracts used to finance the cost.
The Healey administration celebrated the completion of the line in mid-January. But then the frigid temperatures and snow hit New England — and, crucially, Quebec. Barely a week later, the power flowing over the NECEC line from Hydro-Quebec had stopped. Hydro-Quebec, in its lawsuit, described the cold as life-threatening: Two elderly women died in Montreal, and many residents had to drive in their cars around their neighborhoods to stay warm.
Hydro-Quebec, in its lawsuit, accuses the utilities of engaging in a form of unauthorized “self help” by withholding $40 million from the payments they’ve made to Hydro-Quebec for the power, to compensate themselves for what they claim is owed because of the cold-snap interruption.
The utilities, meanwhile, underscore that their contracts with Hydro-Quebec call for “firm hydropower” — meaning, delivered on an uninterrupted basis. Hydro-Quebec, the utilities claim, violated this clause by cutting off power deliveries over all or parts of 12 days in the stretch from Jan. 24 through Jan. 31 and from Feb. 6 through Feb. 9. The utilities say they were forced to rely on higher-cost, dirtier oil-fired power plants to meet demand and maintain the grid’s reliability as a result, and need to be repaid on behalf of their customers.
“First and foremost, our claims are focused on protecting the interests of our Massachusetts electric customers,” Eversource spokesman William Hinkle said in a statement. “This supply of clean, reliable power would help Massachusetts in achieving carbon reduction goals and play an important role in an all-of-the-above approach to addressing our region’s longstanding energy supply constraints.”
Hinkle said the utilities want a court order to enforce Hydro-Quebec’s firm supply obligations, and to validate the assessment of financial damages. Customers, Hinkle said, also need clarity around Hydro-Quebec’s obligations with 19-plus years remaining on the contracts.
National Grid and Unitil offered similar statements in response to the suit, with National Grid saying that it signed this deal with Hydro-Quebec to bring “reliable, affordable power” to its customers, and that the lawsuit seeks to uphold the commitments contained in that agreement.
As of Thursday, electricity on the NECEC line was flowing from Hydro-Quebec — roughly 1,100 megawatts, or enough power for 1 million homes, essentially the full amount required under the contracts.
Jon Chesto can be reached at jon.chesto@globe.com. Follow him @jonchesto.