Eversource Energy’s Northern Pass project suffered a significant and potentially fatal blow Wednesday when Massachusetts pulled the plug on a contract to use the proposed $1.6 billion transmission line to import Canadian hydropower through New Hampshire.
Governor Charlie Baker’s administration, working with a selection committee representing three big electric utilities, will instead try to seal a deal with a competing transmission project that would bring the hydropower through western Maine. Eversource said it is not giving up on Northern Pass after spending more than a quarter of a billion dollars developing it.
The announcement follows unsuccessful attempts by Eversource to persuade officials in New Hampshire to drop their opposition to the 192-mile Northern Pass. In February, the New Hampshire Site Evaluation Committee denied a crucial permit for the project, ruling that the huge towers required for portions of the line could despoil the state’s scenic rural countryside and affect the important tourism industry there.
Like Northern Pass, the Maine transmission project, from energy company Avangrid, would import more than 1,000 megawatts of electricity from Hydro-Quebec. An Avangrid spokesman said its project would bolster the regional power grid and help curb greenhouse gas emissions by substituting hydropower for electricity from fossil fuel plants.
“This was an opportunity to make a really major regional contribution,” Avangrid spokesman John Carroll said. “It really leverages the limited resources that Maine has to contribute to the regional solution to New England’s energy challenges.”
The state’s three big electric utilities — Eversource, National Grid, and Unitil — are required under a 2016 state law to purchase additional sources of cleaner energy. For that reason, Eversource was on both sides of the bargaining table: It’s part of a team of utility executives and state officials that will negotiate the renewable power contracts while being a backer of one of the projects to deliver that power to Massachusetts.
But after the initial rejection by New Hampshire, the selection team tapped the Avangrid project as a backup, while giving Eversource a March 27 deadline to reverse its fortunes in the Granite State. With Eversource unable to do so by Tuesday, the selection committee officially moved on to the Maine project.
State officials said the selection committee will try to negotiate a contract with Avangrid by the end of April and submit it to the Massachusetts Department of Public Utilities for approval.
Meanwhile, Eversource said it will continue to fight its case in New Hampshire, taking its appeal to the state’s Supreme Court if necessary.
“Northern Pass isn’t going away,” said spokesman Martin Murray. “We have opportunities to earn the permit that is required here in New Hampshire. We have virtually every other permit that is necessary.”
Eversource has spent $277 million as of the end of 2017 planning and promoting Northern Pass, costs that will be borne by shareholders, Murray said, not its ratepayers.
Going with Avangrid also skirts possible potential conflict-of-interest issues, with Eversource in a position to help pick its own transmission project.
“You have got one company signing a contract with another company that’s affiliated with them. There is always a risk of the possibility of self-dealing,” said Cynthia Arcate, chief executive of PowerOptions, a Boston-based group that negotiates power contracts for nonprofit organizations.
The Avangrid project is estimated to cost less than Northern Pass — $950 million — and could be finished in 2022. Most of it would run through existing utility rights of way, and would tie into an electrical station in Lewiston, Maine, where the hydropower would then flow over the existing transmission system to Massachusetts.
Maine Governor Paul LePage has welcomed the Avangrid project and vowed an expeditious permitting review. LePage is in his last year in office, but Carroll said Avangrid and its Central Maine Power subsidiary expect to have all their state permits in hand by the end of this year. He said construction could start in the second half of 2019.
But the nearly 150-mile Avangrid project, known as New England Clean Energy Connect, faces its own opposition. Critics are particularly concerned about the effects the power line would have on Kennebec River Gorge and the Appalachian Trail.
“As more people in Maine know about the project, there’s going to be more opposition that arises over the impacts,” said Dylan Voorhees, clean energy project director with the Natural Resources Council of Maine.
Avangrid said it has offered millions of dollars to offset the impacts of the power line crossing over the gorge. But it’s also possible the state of Maine may require the company to bury the line underground, which would drive up the costs.
Emily Norton, Massachusetts director for the Sierra Club, said her group has many of the same concerns with the Avangrid line as it does with Northern Pass, such as displacing other forms of clean energy, particularly at projects that could be built within New England.
“You have money going to the Canadian government, rather than staying in our own region,” Norton said.
However, the Conservation Law Foundation, a powerful environmental group based in Boston that fiercely opposed Northern Pass, is so far undecided on the Avangrid plan.
Massachusetts electricity customers will end up paying for the new power line. But Avangrid maintains that its project would result in lower electric bills over time because it would displace more expensive electricity from fossil fuel sources.
But Dan Dolan, president of the New England Power Generators Association, whose members include natural gas-fired electricity plants, predicted the Maine project would drive up costs for ratepayers.
“This is a project that doesn’t have a single one of its permits and it’s going to face significant opposition,” Dolan said. “There’s a long way to go here.”