Massachusetts Sinks Eversource Power Project, Picks Avangrid (1)

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By Adrianne Appel

Massachusetts dropped Eversource’s $1.6 billion Northern Pass transmission project after the company failed to meet the state’s deadline for securing a necessary permit from nearby New Hampshire.

Massachusetts will instead move forward with a similar plan proposed by Avangrid Inc. and Central Maine Power to bring hydropower from Hydro-Quebec to Massachusetts on transmission lines in Maine by 2022, state officials announced March 28.

The switch to Avangrid will position Massachusetts to “achieve a clean, affordable, and resilient energy future while progressing towards greenhouse gas reduction requirements,” Peter Lorenz, spokesman for the Executive Office of Energy and Environmental Affairs, said in a March 28 statement.

Eversource and Hydro-Quebec are not giving up on Northern Pass, Eversource said March 28 in a statement.

“Despite recent delays, we continue to believe that Northern Pass is the best project for the region and New Hampshire, and we intend to pursue all options for making it a reality,” Eversource said.

Massachusetts in February picked Northern Pass over the Avangrid project and 44 other proposals to supply up to 1,200 megawatts of clean energy to the state, as called for under state law. But Eversource still needed a crucial permit, and on Feb. 2, the New Hampshire Site Evaluation Committee voted to deny it, citing concerns about the impact on land uses and local planning.

No Permit

By mid-February, with no permit forthcoming, Massachusetts lowered the boom on the Northern Pass project and told the electric distribution companies in the state, mainly National Grid and Eversource itself, to begin negotiating with Avangrid alongside Eversource’s Northern Pass project.

Massachusetts gave Eversource until March 27 to win the permit, saying it would otherwise direct electric distributors in the state to negotiate only with Avangrid for hydropower under the state’s clean energy law.

Lorenz said that as of March 28, the electric distribution companies were wrapping up their negotiations with Avangrid. The companies had “terminated the conditional selection of the Northern Pass Hydro project,” he said.

Right up until March 26, Eversource had hoped the electric companies would view the state’s directive to cease negotiations with the company as “optional” and that they would stick with Northern Pass, Martin Murray, a spokesman for Eversource, told Bloomberg Environment March 26.

Eversource Still Can Move Ahead: CEO

If Eversource can obtain the New Hampshire permit, it can sell the energy to states other than Massachusetts, Jim Judge, Eversource’s president and CEO, told reporters and investors Feb. 23.

And if Eversource killed the Northern Pass project, the company would not be harmed, Phil Lembo, Eversource’s chief financial officer, said Feb. 23.

The company will see 5 percent to 7 percent earnings growth by 2020, with or without the Northern Pass project, Lembo said.

“Our new end-of-year 2020 rate base forecast even without Northern Pass is about $500 million higher today than it was a year ago with Northern Pass,” Lembo said.

Avangrid Already Negotiating

Avangrid’s Clean Energy Connect plan will deliver 10 percent more energy than Northern Pass for less money— $950 million—the company has said. It will bring 1,200 megawatts of power to Massachusetts along 145 miles of transmission lines by 2022.

Avangrid has been negotiating long-term contracts with National Grid and Eversource for clean energy for Massachusetts since mid-February, when Massachusetts officials tapped the Clean Energy Connect project as a backup to the Northern Pass proposal should that plan fail.

Avangrid and the electric distributors must complete their negotiations ahead of April 25, the deadline for submitting their draft contracts to the Massachusetts Department of Public Utilities for approval, according to the Massachusetts Department of Energy Resources’ schedule.

Maine Approvals Pending

Avangrid and partner Central Maine Power need federal and state approvals, including a certificate from the Maine Public Utilities Commission. The commission has shown in recent years to be friendly to projects favored by Gov. Paul LePage (R), as this one is. But a look at the docket (Case 2017-00232) shows that it is not necessarily clear sailing ahead for the project and that the concerns of competing electric power generators, property owners, and an environmental organization will need to be addressed.

Avangrid has said it expects to receive all required state permits later this year and federal permits in 2019.

Good Public Relations

Avangrid is confident that it won’t run into the public relations disaster that sunk the Northern Pass project, John Carroll, spokesman for Avangrid, told Bloomberg Environment March 26.

Two-thirds of the power line has already been built, and the company owns all the land or corridor rights needed to complete the project. Only the northernmost section of the power line remains to be built, in counties where logging is a major industry, Carroll said.

“We have met extensively with communities to describe the project impacts and benefits as a way to inform our project planning and to gauge stakeholder sentiment about the line,” Carroll said.

Avangrid has received “expressed letters of support” along 97 percent of the transmission line, Carroll said. It needs official approval from just three more towns, he said.

“In general, these northern towns do not consider the line an intrusion, and the region is particularly welcoming to the jobs and property tax revenues associated with the project,” Carroll said.

An environmental organization, the Natural Resources Council of Maine, was quick to condemn the project.

The power line would “significantly harm Maine communities and the environment,” Dylan Voorhees, a director of the organization, said in a March 28 statement. Avangrid’s “well-orchestrated public relations campaign and its decision to name its project ‘Clean Energy Connect’ do not make this project ‘clean,’” Voorhees said. The company needs to show that it is creating new hydropower and not simply diverting existing hydroelectric power from Canadian communities and sending it to Massachusetts, he said.

National Grid declined to comment March 26 about the Massachusetts clean energy negotiations.

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