Distant Dome is co-published by Manchester Ink Link and InDepthNH.org
By GARRY RAYNO, Distant Dome
What a difference a day makes; well actually a week.
Eversource and its wholly-owned subsidiary Northern Pass Transmission celebrated being the only project moving to the final step in the Massachusetts Clean Energy Project, negotiating with the three major electric distributions utilities — including itself — before final approval by the Massachusetts Department of Public Utilities.
But a mere seven days later the contract and the entire project are at the edge of an abyss after the New Hampshire Site Evaluation Committee voted 7-0 to deny the project’s application.
Northern Pass officials say they are not giving up and will ask regulators to reconsider their decision, something that is unlikely given the 7-0 vote, so an appeal to the state Supreme Court appears almost certain.
If that happens, at least a year’s delay lies ahead with no guarantee of success.
The Massachusetts Clean Energy award made through Gov. Charlie Baker’s office and the Department of Energy and Environmental Resources took a big question mark away — the project’s economic viability without the 20-year contract — but also reinforced the opponents’ contention New Hampshire was being used as an extension cord — or pawn — for the Connecticut-based parent company.
The $1.6 billion, 192-mile, high-voltage transmission line stretching from Pittsburg to Deerfield to bring Hydro-Quebec electricity to the New England grid was first proposed in 2010 and many things have changed since then.
One of the biggest changes is the Site Evaluation Committee’s review and approval process.
The plethora of wind farm projects proposed to dot the ridges of mountains around New Hampshire proposed by foreign utilities and conglomerates to take advantage of federal tax credits spurred lawmakers to increase public involvement.
Gone are the days when a transmission line carrying 2,000 megawatts of Hydro-Quebec electricity through the state to Massachusetts is approved with little fanfare.
That line was approved about 25 years ago and would be used in National Grid’s Granite State Power Link Project to bring Canadian renewable energy to the New England grid.
Before the changes, an energy project before the Site Evaluation Committee had to be in the public good. Now it has to be in the public interest with specific guidelines and standards.
Other changes require the SEC to consider the views of municipal and regional officials in determining if a project would unduly impact the orderly development of a community and the region.
That is a high bar to clear when only one of 31 host communities supports the project, 29 vehemently oppose it and and one city’s support is contingent on favorable conditions for that community.
Economic conditions also changed. The New England electric grid has grown increasingly dependent on natural gas for generation, now responsible for about half of New England’s power.
In 2010, natural gas was very expensive and scarce in winter months when the top priority is heat, not producing electricity and that spikes the price.
Hydro-Quebec’s electric rate is fairly stable with no “fuel costs” after the dam and generation systems are built and paid off.
In the past five or six years, natural gas costs have decreased significantly as fracking has made the fossil fuel much more plentiful.
Today natural gas generated electricity is competitive with large hydro. Hydro is desirable to diversify the region’s generation sources, which helps to stabilize the market reducing spikes.
Hydro powers also helps states met their clean power goals of reducing carbon emissions and will become increasingly important if the Regional Greenhouse Gas Initiative RGGI increases its carbon reduction goals as proposed.
When first proposed, Northern Pass was an economic winner that would lower prices and still provide a robust source of revenue for Eversource investors and help the Crown Corporation lower prices for its Canadian customers.
But the sliding electric prices made the proposed line more economically iffy as the years went by and approval took longer than anticipated.
Early in the adjudicative hearings last spring, Eversource vice president of engineering Kenneth Bowes told the SEC the market had changed since 2010 making it uneconomical to bury the entire 192-mile transmission line at a cost of $2.6 billion.
He acknowledged Hydro-Quebec could not make enough money selling its power on the wholesale market to cover the company’s obligation under the their Transmission Service Agreement.
Bowes did say there were options for Hydro-Quebec such as entering the forward capacity market auction for additional revenues. And he noted they intended to bid for the Massachusetts Clean Energy contract.
When Northern Pass was announced as the winner, the economic concerns went away because Massachusetts electric customers would be paying for constructing the transmission project for the first 20 years.
So when the Site Evaluation Committee met last week to begin 12 scheduled days of public deliberations on the project, financial issues were a non-issue.
Finances and technological and managerial capabilities are the first of four criteria needed to approve the project and the seven-member board quickly agreed that standard would be met.
But the committee’s mood changed on the second day after reviewing evidence on the second criterion: that the project would not unduly interfere with the orderly development of the region.
The unduly interfere standard included more than just land use issues such as communities’ master plans and zoning ordinances.
The discussion included the effect on business due to construction, particularly along the 52-mile buried section between Bethlehem and Bridgewater including Plymouth’s Main Street, authority over local roads, property values, tourism and financial plans to allow business owners to recoup their loses during construction.
Some long festering concerns about Northern Pass’s experts on tourism and property values surfaced with the Department of Business and Economic Affairs representative Christopher Way saying they didn’t pass the “straight-face test.” SEC chair Martin Honigberg said “it is all inadequate.”
During the adjudicative hearings, the committee not only heard from Northern Pass experts but from North Country people impacted by the project.
The region is no longer dependent on paper mills and the ancillary industries like logging.
People often talk about two New Hampshires, one above Concord and one below. But the hearings showed there are two New Hampshires in the North Country.
People from many walks of life have moved to Northern New Hampshire to enjoy the pristine landscape, the quiet pace of life and the beauty.
For lack of a better term, the North Country has become a bit gentrified with people who know how to fight back and point out deficiencies in “expert’s testimony.”
On the third day of deliberations, Honigberg asked what committee members were thinking about the second criterion. Over the course of 90 minutes, the seven members said they did not believe Northern Pass met its burden of proof.
After lunch, committee vice chair Kathryn Bailey moved to deny the application saying they could not issue a permit if one of the four criteria could not be met.
The 7-0 vote shocked the 40 people in the room from opponents to the project’s attorneys.
The company has spent $249 million on the project through Sept. 30 and is not about to give it up, but faces a long delay.
The vote also throws the Massachusetts program, an upgrade of the Coos Loop transmission line as well as multimillion dollar economic development funds, the jobs of electrical and construction workers and material suppliers into chaos until there is a resolution.
The company and other supporters have criticized the SEC for failing to review all four criteria before voting, but the other two standards, public interest, and aesthetics, historic and cultural landmarks, air and water quality and other issues present problems as well for Northern Pass.
Hydro-Quebec covered its bases pretty well also partnering with TDI-NE and Central Maine Power on two proposals that also sought the Massachusetts contract.
The likelihood of Hydro-Quebec electricity flowing into New England is greater than the likelihood that Northern Pass is built in its current configuration.
Major changes to the plans now would be difficult and take time, something it may not have if it wants to hold onto the security of the Massachusetts contract.
Garry Rayno can be reached at email@example.com
Garry Rayno’s Distant Dome runs exclusively on Manchester Ink Link and InDepthNH.org, where Rayno will explore a broader perspective on State House – and state – happenings. Over his three-decade career Rayno has closely covered the NH State House for the New Hampshire Union Leader and Foster’s Daily Democrat, and his coverage spanned the news spectrum, from local planning, school and select boards, to national issues such as electric industry deregulation and Presidential primaries. He is former editor of The Hillsboro Messenger and Assistant Editor of The Argus-Champion. Rayno graduated from the University of New Hampshire with a BA in English Literature and lives with his wife Carolyn in New London.