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The operator of the New England electric grid has endorsed a $740 million plan by the region’s two largest utilities to build new power lines between Massachusetts and New Hampshire, rejecting a competing proposal that would have involved an underwater cable.

ISO New England, the nonprofit administrator of the region’s electricity market, said Thursday that the overland route proposed by National Grid and Eversource Energy was superior to the proposed “SeaLink” cable in most ways and should cost $260 million less. The grid operator also urged the new transmission lines, which were proposed three years ago, be built quickly to avoid the risk of rolling blackouts.

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“Without these upgrades, the Greater Boston area faces increasing risks to grid reliability,” ISO New England said.

National Grid and Eversource Energy, the new name for NStar and its parent company Northeast Utilities, called the decision a “win-win.” The companies plan to build a 25-mile power line from Londonderry, N.H. to Tewksbury, add new lines from Wakefield through Woburn to Everett, and increase the capacity of power lines between Tewksbury and Wilmington.

The proposals for new power lines came after a 2010 study by ISO New England concluded the Boston area would need more transmission lines because of the shutdown of the Salem Harbor power plant, a process that concluded last summer. The cost of either project would ultimately be borne by ratepayers.

In its analysis, the ISO said the high-voltage cables would be cheaper to install and more reliable to operate in all but the most extreme circumstances, such as the total failure of an electrical substation.

“The ISO is analyzing whether additional special operating plans need to be developed to be able to manage the system in Greater Boston during peak load conditions,” the grid operator said.

In a Friday statement, the utility companies said their project would be completed by 2018. They said they would be holding community meetings before submitting plans to state regulators “in the spring.”

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New Hampshire Transmission, the company that proposed the SeaLink cable, issued a brief statement on Friday alluding to the fact that it had offered to put a binding price cap on its underwater power line plan.

“While we don’t agree with ISO’s analysis and look forward to further discussion next week, customers in Greater Boston will ultimately bear the risk of our competitors’ non-binding proposal,” said Steve Stengel, a spokesman for New Hampshire Transmission.


Jack Newsham can be reached at jack.newsham@globe.com. Follow him on Twitter @TheNewsHam.