Today, CLF, the Appalachian Mountain Club, and the Society for the Protection of New Hampshire Forests filed joint comments with the U.S. Department of Energy (DOE) bearing a simple message: the Northern Pass project’s new “amended” application for a federal Presidential Permit once again doesn’t cut it. The application, filed in July, fails to provide the comprehensive and required information that DOE and the public need to evaluate the project. This time, project developer Northern Pass Transmission LLC (NPT) should not get another bite at the apple.

After more than two years of self-imposed delay and thousands of good-faith comments from the public expressing concerns about the project’s impacts and offering a wide range of potential alternatives, project developer Northern Pass Transmission LLC (NPT) has had ample opportunity to right the wrongs in its original, incomplete permit application by fully describing the practical alternatives to the project and its important environmental impacts, including at the project’s power sources in Canada. Instead, as we say in our comments, NPT’s 80-page amended application amounts to a poorly cited legal brief. It fails to include much of the detailed technical and environmental information in NPT’s possession and seeks to avoid thorough and rigorous review of the project and alternatives by dismissively branding each and every alternative to the current proposal unreasonable and impractical.

Enough is enough: no more bites at the apple for Northern Pass (photo credit: flickr/shane o mac)

Why is what’s in NPT’s application so important? For one, the content of the application provides the crucial starting point for DOE’s review of the project and its alternatives. And the application also should provide a set of sound technical and environmental information about the project and its alternatives that the public can reference, evaluate, and hold NPT accountable for. This is especially important in the wake of a saturation public relations campaign that superficially touts the project’s supposed benefits, including a series of “open houses” where project officials control the agenda and won’t answer key questions.

CLF and its partners agree: NPT had its chance to present a revised project, an amended permit application, and a new approach that respected host communities, acknowledged the feasible alternatives to overhead transmission technology outside the original corridor, and made a credible environmental and economic case for increasing imports in the context of the region’s overall energy future and in the face of its affiliate PSNH’s stubborn insistence on continuing to operate uneconomic, dirty coal plants. With its barely changed ”new route” and unwavering adversarial stance, NPT blew it.

As CLF’s President John Kassel made clear this summer, the region should pursue a robust regional discussion of the right approach to importing more power from eastern Canada. But without even the solid ground of a complete federal permit application, NPT’s proposal should stop here.

Don’t forget: next week, Show Up and Speak Out at the Final Round of Public Scoping Meetings for Northern Pass, and tomorrow is the deadline for intervening or filing specific comments on NPT’s amended Presidential Permit application.

During the week of September 23, the United States Department of Energy (DOE) has scheduled four additional public scoping meetings in different communities in New Hampshire as part of the scoping process for DOE’s Environmental Impact Statement (EIS) for the Northern Pass transmission project.

As with the well-attended meetings more than two years ago, these new meetings are a vital opportunity to explain your concerns about the project to DOE officials. These meetings are the last in-person moments to influence DOE’s decisions on the scope and content of the draft EIS, including the environmental and social impacts of the project to be considered and the alternatives to be seriously studied. Those decisions will have lasting ramifications as the federal and state permitting processes continue. Here is the schedule:

• Monday, September 23, 2013, 6–9 p.m., Grappone Conference Center, Concord, NH (map)
• Tuesday, September 24, 2013, 5–8 p.m, Plymouth State University, Silver Center for the Arts, Hanaway Theater, Plymouth, NH (map)
• Wednesday, September 25, 2013, 5–8 p.m., Mountain View Grand Resort & Spa, Presidential Room, Whitefield, NH (map)
• Thursday, September 26, 2013, 5–8 p.m., Colebrook Elementary School, Colebrook, NH (map) (this meeting was moved from a smaller location in W. Stewartstown)

Each meeting will include both an “informal workshop” and a more formal session where the public will have the opportunity to make brief statements. In the 2011 meetings, speakers were limited to 3 minutes. If you want to speak, we advise that you reserve a slot in advance by emailing DOE’s Brian Mills at Brian.Mills@hq.doe.gov. The formal portion of the meeting will be transcribed by a stenographer, and all public testimony will be included in the official administrative record of DOE’s review of the project.

Even if you aren’t interested in making any remarks in the formal session, please attend and bring your neighbors, friends, and family. The turnout at these meetings is important to the course of the permitting process, and many will be watching to gauge the public’s reaction to Northern Pass’s revised route. Showing up matters!

(photo credit: flickr/Christchurch City Libraries)

You can also weigh in with written scoping comments on DOE’s EIS website. The deadline for these comments is November 5, 2013. (The deadline to file comments with DOE on the amended application and to ”intervene” remains September 18.)

What should you say or write? Any reasonable concern or question about the proposed Northern Pass project and alternatives is relevant to the scoping process and will help inform DOE’s decision-making. As a starting point, it may be helpful to review the maps of the project route prepared by Northern Pass Transmission LLC in its amended permit application; both the maps and the application are available at DOE’s EIS website. CLF’s Northern Pass site, our detailed 2011 scoping comments, and three years of our Northern Pass blog posts are also at your disposal. Consider submitting comments on the potential impacts of the project on communities, the White Mountain National Forest, the climate, wildlife, forest resources, wetlands, recreation areas, the renewable energy sector, the local economy, and natural resources in Canada.  And don’t hesitate to tell DOE, once again, that its review of the project needs to be more fair, transparent, and objective than it is now. Note also that Northern Pass’s many rejections of potential alternatives to the project, including in its permit application, aren’t the final word, and DOE must conduct a rigorous review of all reasonable alternatives, including not building the project, and alternative routes and project designs that may have fewer impacts. It’s well settled that an objective and comprehensive analysis of alternatives is an ironclad legal requirement and, indeed, the heart of the federal environmental review of the project.

Show up and speak out!

On the cusp of the Northern Pass transmission project’s fourth year, it is no closer to community acceptance, government approvals, or construction. But, for the first time since 2011, the permitting process is moving forward once again, as are the developer’s efforts to sell the project to a skeptical Granite State. That means new opportunities to register your concerns with the federal agency reviewing the project and to provide feedback directly to the people on the developer’s team. Here is a Northern Pass update.

Recent Developments

The project came back from a long lull this summer, with the developer, Northern Pass Transmission LLC (NPT), announcing a slightly revised “new” route, initiating a new statewide marketing campaign (complete with long-discredited talking points), holding “open houses” for some towns that would be affected by the project, and unveiling a plan to create a fund to support North Country jobs if the project is approved. Meanwhile, op-ed and letter writers took to the state’s and region’s newspapers to renew the public debate about the project.* A key obstacle to Northern Pass’s revised proposal immediately emerged: it is unclear that the project has the legal ability to use several miles of North Country roads.

In July, the developer filed an amended application for a Presidential Permit to U.S. Department of Energy (DOE). Earlier this month, DOE published a notice in the Federal Register that it had received the amended application and that it would accept public comments on the filing.

NPT rendering of Northern Pass project from the Rocks Estate in Bethlehem, NH

The federal permitting process for Northern Pass will include a full environmental review of the entire project, evaluation of alternatives to the current proposal, and special consideration of the proposed sections that cross the White Mountain National Forest. It is now clear that the federal government’s review of the project will be a critical part of the state’s consideration of the project’s application for state approval as well. As CLF has said from the beginning, by law and as a matter of good government, New Hampshire deserves a federal permitting process for Northern Pass that is comprehensive, rigorous, open, and fair.

While the defects in DOE’s passive and troubling approach thus far have not been addressed, what is encouraging is that, earlier this month, New Hampshire’s Congressional delegation, in an extraordinary moment of bicameral, bipartisan unity, requested improvements in DOE’s handling of the permitting process to ensure a “thorough, transparent, and effective” environmental review, including the public release of information about the project’s impacts and the alternatives to be studied. Their full letter to DOE Secretary Moniz is here. (In a separate letter, the delegation also jointly asked the Secretary of Agriculture to reaffirm that the terms of the Connecticut Lakes Headwaters Easement would not allow the Northern Pass project to use the conservation land it protects, the only project alternative that NPT included in its amended application.)

Get Involved

If you are concerned about Northern Pass, you have three immediate opportunities to weigh in on the project and its amended permit application:

• Submit comments to DOE on Northern Pass’s amended application.

The application is a lengthy document with additional information on the project and a number of exhibits, but much of the proposal is exactly the same as the proposal that has been on the table for almost three years. This is an opportunity to tell DOE, for example: what your concerns are with the project, what you think of the changes to NPT’s proposal, what you think is missing from the application, whether NPT’s discussion of alternatives is adequate, and whether DOE should require NPT to submit more information for public review before the permitting process continues. You may file comments by sending them to Christopher.Lawrence@hq.doe.gov and then sending a hard copy of the comments to Christopher Lawrence, Office of Electricity Delivery and Energy Reliability (OE-20), U.S. Department of Energy, 1000 Independence Avenue SW., Washington, DC 20585.  The deadline for submitting comments is September 18.

Regardless of this deadline, you can continue to file “scoping comments” on DOE’s environmental review of Northern Pass at http://www.northernpasseis.us/. DOE has not announced a deadline for those comments.

• Request intervener status in the DOE permitting process.

You should consider filing for intervener status if you want to play an ongoing role in the process. Landowners, residents of affected communities, and interested organizations, as well as local communities and municipal boards should consider filing for this status, if they didn’t do so in 2010 (a list of those that did is here). To give you an idea of what an intervention filing looks like, take a look at CLF’s filing from 2010 (20 MB PDF). Another simpler example is the 2010 filing of the North Country Council.  The requirements are spelled out in federal regulations (18 C.F.R. 385.214) and DOE’s Federal Register notice. The deadline for filing for intervener status is September 18.

• Attend a developer-sponsored open house.

This is your chance to speak your mind and ask hard questions. Let us know what you hear! The next open house is in Concord on September 4, and more are scheduled. Here are some suggestions:

• These open houses seem to be targeted at residents and landowners; project representatives have maps and computer programs to show where the project would be located. Find out how the project would affect your town or places that are special to you, and tell the representatives what you think about the impacts.
• Ask project representatives to explain if and by how much the project will reduce your energy bill, especially if you are a PSNH customer.
• Ask why they continue to use an estimate of the project’s climate benefits that is completely untrue.
• Ask why the project is not proposing to use the new imports to phase out PSNH’s dirty, costly coal plants.
• Ask why siting a non-reliability transmission project in roadbeds owned by unwilling landowners is different from using eminent domain.
• Ask why underground transmission technology is not an option for more of the project.
• Ask why the proposed jobs fund contributions are less than 1% of the project’s annual profits.
• Insist that project representatives follow up and provide information and proof in response to your questions in writing.
• Keep in mind that these open houses are not part of the public review process for the project. They are a public relations gesture and a showcase for NPT to get its message out. Whether or not they reflect any form of honest engagement with the public remains to be seen.

There will be many future opportunities to participate in the federal and state permitting processes for Northern Pass, including at additional scoping meetings for the federal environmental review, which have not yet been scheduled but will likely be later this fall. We’ll keep you posted. UPDATE: DOE has announced the final round of public scoping meetings for the project’s environmental review for the week of September 23. More on those meetings here.

* A sampling of the many thought-provoking pieces authored by concerned citizens this summer:

• Lee Sullivan, Northern Pass Project Power Is Not Needed (Foster’s Daily Democrat)
• Nancy Martland, Unneeded Power Line Would Scar New Hampshire (Hartford Courant)
• Dolly McPhaul, How Dare They? PSNH Exploiting NH (Nashua Telegraph)
• Kathy Sullivan, Northern Pass Numbers Do Not Add Up (Manchester Union Leader)
• Fergus Cullen, Northern Bailout – PSNH, Public Assets and Private Profits (Manchester Union Leader)
• Terry Cronin, Psst, PSNH, Why Not Join the 21st Century? (Concord Monitor)

(photo credit: flickr/macwagen)

With last month’s Northern Pass route announcement and last week’s filing of an amended application for a Presidential Permit, Northeast Utilities and PSNH have repackaged and repeated the very same arguments for the project that have filled air waves and op-ed pages throughout New England for nearly three years. We keep hearing the same sales pitch—cleaner air, a more reliable grid, economic prosperity, low-cost energy—with the same numbers: 5 million fewer tons of carbon pollution, 1,200 jobs, and millions in energy savings and tax revenue.

From a distance, the claims look real enough; on closer inspection, it becomes clear that they were born in a long-gone energy landscape and are aggressively deceptive. And they live not only in Northern Pass’s marketing materials, but in the disseminations of Northern Pass’s cadre of PSNH-aligned supporters, such as this recent op-ed by an avowed clean energy opponent who worked for a group that calls climate change “pseudo-science.”

CLF and others have been examining and debunking these talking points for a long time. But like zombies, they keep coming back. And there is perhaps no uglier member of Northern Pass’s living dead than the claim that Northern Pass will reduce carbon pollution by up to 5 million tons per year.

The number is an estimate of the carbon dioxide emissions from the typically natural gas power that Northern Pass imports would displace in our regional energy mix, based on a 2010 market modeling report by an economic consultant hired by Northern Pass—a report that, despite numerous references to it in the project’s amended application, no longer appears on Northern Pass’s website but is available here (25 MB PDF). The estimate assumes four things:

Assumption No. 1: Northern Pass power would not result in any carbon dioxide emissions. (See pp. 5 and 34 of the report.)

This is unequivocally wrong. Scientific research conducted by Hydro-Québec scientists and published in peer reviewed journals says just the opposite. The science confirms that, by flooding vast areas of boreal forests, new large-scale hydropower facilities have net greenhouse gas emissions (from the decomposition of flooded biological material, the elimination of forest carbon “sinks,” and other sources) that may initially exceed those of natural gas power plants and that, despite declining and producing fewer net greenhouse gas emissions than natural gas over time, may continue at meaningful levels even over the long term. Northern Pass’s continued “zero-carbon” assumption is dishonest and cynical, especially given the fact that Northeast Utilities has submitted summaries of the very same research findings on hydropower emissions to regulatory authorities and has steadfastly refused to change its marketing materials despite CLF’s effort to point out the error.

Assumption No. 2: Over the next ten years, New England’s energy market will look like government forecasts predicted in 2010. (See pp. 23-24 of the report.)

Northern Pass’s 5 million ton estimate is highly dependent on outdated modeling of an energy market that no longer exists. Its consultant report was prepared three years ago—in 2010—with U.S. Energy Information Administration forecasts of energy commodity prices, including natural gas prices approaching $7 per million cubic feet by 2022. The forecast price of natural gas is crucial to predicting how Northern Pass power will affect New England’s energy market because that price helps determine the market price of electricity in New England. Since 2010, domestic natural gas supplies have driven down prices, and the EIA’s forecast has changed dramatically, now estimating that average prices won’t crack $5 until 2026. (The spot natural gas price today is well below $4; the 2010 projection for 2013 was $6.13.) While CLF and many other stakeholders are deeply concerned about proposed long-term investments in natural gas (and their climate impacts), there is no denying that the fuel’s role in the region’s energy market is different than what was predicted in 2010.

In addition to lower power prices in New England, the report failed to account for the availability of an additional path for Hydro-Québec to export its power—the Champlain Hudson Power Express—which won approval from New York officials earlier this year and is in the process of obtaining federal permits.

All this means is that Hydro-Québec will likely sell less power into New England than previously estimated, replacing (by Northern Pass’s own logic) less natural gas power and its associated pollution.

Assumption No. 3: Hydro-Québec will continue to build more hydropower facilities, including the Romaine River dams that are under construction, which will facilitate additional exports to the United States. (See pp. 2 and 28 of the report)

The report on which Northern Pass’ claimed 5 million ton greenhouse gas reduction is based explains that “[i]n reality, the additional transmission capacity provided by [Northern Pass] could lead to additional development of resources to support exports from Québec….” In fact, the 5 million ton estimate is only that high because it includes emissions reductions (which are inflated for the reasons identified above) that will happen if Hydro-Québec develops new hydropower projects and as a result has more surplus energy available than it does today. (If not, the report itself predicts emissions reductions of only about half the 5 million ton estimate.) The assumption suggests that Hydro-Québec will rely on a succession of new projects –the Eastmain-Rupert River complex just completed, the Romaine River complex under construction, and the Magpie and Petit-Mécatina complexes that are in Hydro-Quebec’s strategic plan—to feed exports to New England.

With this context, the 5 million ton estimate is even more unrealistic because the short-term greenhouse gas emissions of new projects are worse than older facilities. The assumption of new projects in Canada is noteworthy as well because, while consistent with sworn testimony by a Northeast Utilities executive about the source of Northern Pass power, it is directly at odds with Northern Pass’s repeated refrain that Northern Pass power will merely be excess “system power” from Hydro-Québec and won’t require the construction of new hydropower facilities. (See p. 6, footnote 1 of the amended application.)

Assumption No. 4: There won’t be any greenhouse gas emissions associated with the energy that Québec’s other neighbors may need when Northern Pass comes online and more Hydro-Québec power flows to New England.

Where would Hydro-Québec sell its energy without Northern Pass, and what power sources other than Hydro-Québec power will those places use if Northern Pass is built? Whether Northern Pass has any climate benefit depends on the answers. The report’s estimate of increased Hydro-Québec power sales into New England predicts that New England will get power that would otherwise flow to New York and Ontario. (See p. 27 of the report.) In both markets, natural gas is the marginal fuel, meaning that it both sets energy prices and tends to be the power source that makes up for unavailable sources. In other words, it would be reasonable to assume that natural gas power plants in New York and Ontario will run more if Northern Pass is built and shifts Hydro-Quebec’s exports to New England. Northern Pass’s 5 million ton greenhouse gas reduction estimate wrongly assumes that other regions’ replacement power won’t have any carbon emissions—in fact, it doesn’t address this critical issue at all. Because climate change is a global phenomenon, what we have here looks like a shell game: the supposed climate benefits of Northern Pass from displacing natural gas power in New England could very well be cancelled out by power plants in other regions burning natural gas (or other fossil fuels).

With all these assumptions in the open, Northern Pass’s 5 million ton estimate is, in a word, indefensible. Northern Pass’s strategy of endlessly repeating this 5 million ton fabrication—to investors, to permitting agencies, and to the public— signals that Northern Pass version 2.0 will be pursued with exactly the same adversarial, greenwashing tactics that accompanied version 1.0. Worse, it reflects apparent contempt on the part of Northeast Utilities and PSNH for well-informed dialogue regarding a key supposed benefit of their project.

And we certainly need a rational, fact-based dialogue as the region embarks on what CLF hopes will be a productive and rigorous process for considering the merits of and best options for importing more large-scale hydropower from Canada. A clear-eyed regional approach requires real, well-grounded numbers addressing pollution and economic impacts. (The now-revived permitting process for Northern Pass needs them, too.)

Zombies need not apply.

Northern Pass’s “new route”

Today, we learned from PSNH President Gary Long about the Northern Pass transmission project’s long-awaited “new route.” As predicted, the “new route” hardly changes the original proposal and corrects none of its serious flaws. You can read CLF’s official statement on the announcement here.

It’s critical to see Mr. Long’s announcement for what it is: a desperate (one might say “last ditch”) effort to resuscitate his company, PSNH, and its failing business model of operating inefficient and costly power plants on the backs of New Hampshire households and small businesses, leading to the highest energy rates in the region. True to form, PSNH parent company Northeast Utilities and its shareholders would still collect the lucrative fees from Northern Pass partner Hydro-Québec, while PSNH customers, who have to live with the project, would likely see even higher rates if Northern Pass were built and PSNH’s power plants continue to operate (and pollute) as they do today. Nothing about today’s announcement changes that reality.

The “improvements” announced today involve moving a small portion of the project’s path through the northernmost towns in New Hampshire (a forty-mile stretch where an entirely new transmission corridor would be constructed) and include 8 miles of new underground lines, less than 5% of the overall route, to be buried in publicly-owned roads. Designed to make the project marginally less offensive to a few communities, these pathetically modest revisions are all PSNH can show for itself after two years and millions of dollars of closed-door land deals. Notably, Northern Pass does not currently have rights to use state and local roads and will seek them during the permitting process. In other words, Northern Pass could not find enough willing landowners to secure a complete route. Unaffected by the changes announced today, Northern Pass’s overhead lines would still cross the protected White Mountain National Forest, the Appalachian National Scenic Trail, the Pondicherry division of the Conte National Wildlife Refuge, and Bear Brook and Pawtuckaway State Parks, among other state lands and conservation areas.

Filled with gauzy statements about working with stakeholders and using precisely the same song and dance we’ve been hearing since 2010 regarding the project’s supposed benefits (complete with deliberate falsehoods about emissions reductions), Mr. Long’s announcement follows two years of adversarial, scorched earth tactics by PSNH, and PSNH affiliate Northern Pass Transmission LLC, like gaming the federal permitting process, attacking land conservation efforts, and blatantly misrepresenting the project’s support and its illusory economic and environmental benefits.

In this context, it’s not surprising that PSNH can’t keep its story straight. For example, Mr. Long is continuing to insist that Northern Pass needs no subsidies, even as the economic reality has changed and Northeast Utilities lobbyists have spent the last year fighting for subsidies to keep the project on track.

Likewise, the new plan to bury 8 miles of the project is flatly at odds with Northern Pass’s repeated insistence (including in a legal filing with the Department of Energy) that any burial would be too expensive. If burial is beneficial and practical for communities and stakeholders along a portion of the route, much more of the project – if not the whole line – should be sited underground, as Governor Hassan suggests in her first reaction to the route announcement.

Unfortunately, the new route moves the project no closer to a genuine solution that would bring meaningful economic and environmental benefits to New Hampshire and real progress toward a clean energy future for New England. It was just last week that CLF expressed cautious optimism that the region could benefit from imports of large hydropower from Canada, if the deals, policies and projects were done right. What is now clear: the “new and improved” Northern Pass project is nothing new, and isn’t the solution.

(photo credit: flickr/crschmidt)

With the Northern Pass “new route” drama entering its third year (Northeast Utilities executives once again failed to announce any progress on last week’s investor conference call), it’s important to remember that all we’ve been talking about is the northernmost forty miles of what is a 180-mile project that stretches from the Canadian border to southeastern New Hampshire.

The “new route” will not change one of the proposed Northern Pass project’s most troubling segments: approximately 10 miles through the White Mountain National Forest, within the towns of Easton, Lincoln, and Woodstock. It goes without saying that the Forest is one of New Hampshire’s most treasured public assets: a vast and magnificent wilderness that is among the most accessible and visited natural wonders in the nation and the cornerstone of the state’s tourist and recreation economy. The Forest is an awe-inspiring place, and its ongoing stewardship is one of those things that make me profoundly proud of this country.

Project affiliate Public Service Company of New Hampshire (PSNH) has a “special use permit” from the United States Forest Service for an existing transmission line, built in 1948, which is largely comprised of H-frame wooden poles standing about 50 feet tall. Northern Pass developer Northern Pass Transmission LLC (NPT) is now seeking a special use permit to remove the existing line and build two new sets of towers (one carrying the new Northern Pass transmission line and the other carrying the existing line) with a “typical” height of 85 feet.

Proposed Northern Pass tower design (existing towers in background)

You can read NPT’s permit application here (PDF) and download its attachments here. The project’s construction would impact important wildlife habitat and ecologically sensitive high-altitude wetlands, and the new more prominent towers would cross the Appalachian Trail and impact a number of the Forest’s other signature hiking areas and viewsheds. It’s also worth noting that the project’s failure to provide meaningful greenhouse gas emission reductions falls particularly hard on the Forest, where climate change is already shifting seasons, reducing snowpack levels, and disrupting mountain ecosystems in significant ways.

It will be up to the United States Forest Service – and specifically the supervisor of the White Mountain National Forest  – to decide whether to approve NPT’s permit application. In particular, the Forest Service must determine whether granting the proposed use is “in the public interest” and consistent with the current management plan for the Forest, which includes special protections for the Forest’s most important natural and scenic resources. This decision will follow the United States Department of Energy’s environmental review of the Northern Pass project as a whole, which CLF has been fighting to improve since the project was first announced in 2010.

Earlier this year, a diverse coalition of conservation organizations, including CLF, along with a grassroots group, several Forest communities, and the regional land use planning commission wrote to the Forest Service, urging the agency to take all available steps at its disposal to ensure comprehensive and rigorous scrutiny of the Northern Pass project and a full analysis of all reasonable alternatives, especially those alternatives that avoid or minimize impacts within the Forest.

Our letter (PDF) highlighted the Forest Service’s stewardship obligations and the special and stringent standards for granting a special use permit. We explained that the Northern Pass project, as proposed, is very different from an ordinary utility transmission line constructed to extend service or improve system reliability; the project is much more like a private commercial development, with no specific policy or law encouraging or requiring its development. We suggested that it was critical for the Forest Service to take these features into account as it weighs whether the project would be consistent with the “public interest” and the Forest’s management plan. Finally, we recommended that the Forest Service avoid relying on data collected by the first contractor hired to conduct the federal environmental review of the project, which was withdrawn by NPT after a public uproar, and that the Forest Service exercise its prerogative to order Forest-specific studies and to scrutinize and question all data and analysis presented by the current contractor team, the objectivity of which is in serious doubt.

Oddly, the federal environmental review of Northern Pass seems to be moving forward even as the project is stalled and the northernmost route has not been disclosed. As field work, studies, and analysis proceed, the Forest Service is hearing from many voices registering strong opposition to Northern Pass’s special use permit application, through efforts like ProtectWMNF.org and this recent citizen-generated petition. If you are concerned about the impacts of the Northern Pass project on the White Mountains, you can add your voice through those resources or by filing a comment with the United States Department of Energy.

Earlier this week, I brought a message from New Hampshire to a gathering of major players in the Northeast’s energy industry in lower Manhattan, the Platt’s Northeast Energy Markets Conference.

(photo credit: flickr/Mathew Knott)

Remember Northern Pass, that novel Northeast Utilities transmission project that would import 1,200 megawatts of large-scale hydropower from Hydro-Québec?

The project, as it was conceived and pitched to the region and the industry, Northern Pass version 1.0 if you will, is dead.

I ran through the key financial elements of the original proposal, what I called the Northern Pass gambit:

• $1.1 billion to build a new transmission line, funded wholly by Hydro-Québec.
• A generous “return on equity,” or guaranteed profit on project costs, of 12.56% for project developer Northeast Utilities, paid by Hydro-Québec.
• Easy and inexpensive siting approvals for the line, which would be located solely in New Hampshire, mostly in corridors controlled by Northeast Utilities subsidiary Public Service of New Hampshire, the state’s largest and most powerful electric utility.
• Ample profits that would cover all Northern Pass costs and much more for Hydro-Québec, which would sell its hydropower in New England’s lucrative wholesale electric market, where energy prices were, in 2008 and 2009 when Northern Pass was conceived, orders of magnitude higher than Hydro-Quebec’s costs of generating power.
• Unlike New England-based renewable projects, no public or ratepayer subsidies.

These elements looked good to investors on paper. But they have, one by one, fallen apart, and they no longer add up. I took the audience through the Northern Pass reality:

• Years of a stalled siting process, as Northeast Utilities tries to purchase a new route for the northernmost 40 miles of the project, where PSNH has no transmission corridor, with repeated missed deadlines for announcing the new route and restarting the federal permitting process.
• Increasing costs – an estimated additional $100 million in project costs already, even without accounting for any new route, mitigation commitments, or any underground component.
• Growing doubt (even more pronounced than a year ago) that Hydro-Québec can recover Northern Pass development costs and its hydropower costs (which will only increase as costly new dam projects continue in northern Québec) through energy exports, given that wholesale energy prices in New England are now much lower.
• Opposition by the vast majority of communities affected by the project, 33 at last count, local chambers of commerce, political leaders, and a diverse, well-organized grassroots movement of residents.
• No support from any New England environmental group.
• Mounting risk to NU’s lucrative return on equity, with the underlying deal expiring in 2014, and any renewal subject to federal regulators’ recently more skeptical view of such incentives.

And finally, I gave the eulogy for the key financial element of Northern Pass 1.0 – the one that attracted so much interest in regional energy circles, was the project’s key distinguishing feature from New England renewable energy projects, and continues to reside within the project’s discredited and misleading media campaign: the promise that the project would not require any subsidies.

In the last several months, as CLF predicted, Northeast Utilities, Hydro-Québec, and their allies have launched a major initiative to secure out-of-market subsidies of one form or the other for Canadian hydropower.  These efforts are now raging in the legislatures of Connecticut and Rhode Island and are simmering in other New England states. CLF is deeply engaged in protecting our state Renewable Portfolio Standard laws from this incursion and in turning back any long-term deals that will supply Canadian hydropower to these states at above-market prices or in a way that threatens renewable deployment in New England.

To us and to others, the false urgency associated with these proposals seems transparently calculated to advance a “Northern Pass 2.0,” just as Northern Pass 1.0 falls apart.

What would Northern Pass 2.0 look like? On the ground, whatever the “new route” New Hampshire continues to wait for, it will almost certainly look the same as Northern Pass 1.0, suffering from many of the same failings. But there will be some key differences, as the project’s underpinnings shift to accommodate a new economic reality. It will rely on public and/or ratepayer subsidies that will mean that New England will pay an above-market premium for the power or will provide an out-of-market gift of long-term energy price certainty to Hydro-Québec, in part to finance the associated transmission. In addition, many in New Hampshire’s North Country believe that the project will need to be sited on public land that is legally off-limits to circumvent the strong, ongoing efforts of the Society for the Protection of New Hampshire Forests to secure blocking conservation easements – in effect, another public subsidy for the project that will face overwhelming pushback in New Hampshire. (Clearly, Northern Pass’s dogged legislative fight to secure an ability to use eminent domain for the project, which it lost in resounding fashion in 2012, was only a preview of coming tactics.)  

As CLF has consistently said, there may be appropriate alternatives to Northern Pass that strengthen New England’s access to Canadian hydropower resources, but only if those alternatives are pursued through well-informed, fair, and transparent public processes, provide meaningful community and ratepayer benefits, displace our dirtiest energy resources, and verifiably result in carbon and other emissions reductions. It does not appear that the emerging Northern Pass 2.0 – buoyed by a set of special deals and no discernible improvements – would do anything to advance these basic common sense principles, which should guide the region’s transition to a resource mix that will power New England’s clean energy future.

With few signs that Northern Pass’s sponsors have learned lessons from their missteps so far, Northern Pass 2.0 looks to have an even tougher path in New Hampshire than the dead end road that Northern Pass 1.0 has traveled. This was a message from the Granite State that the world of energy industry insiders and analysts needed to hear.

Northeast Utilities (NU) tells investors and the public that it is will announce a new northernmost route for its Northern Pass transmission project by a certain date. The date arrives. A “project update” appears on the website of NU subsidiary and project developer Northern Pass Transmission LLC, saying that it isn’t ready to announce the new route just yet.

What’s behind the curtain, Northern Pass? (photo credit: flickr/Nick Sherman)

Sound familiar? It happened at the end of 2012. As reported in the Caledonian Record, it happened again last week, a mere month after NU said – in writing to investors and the Securities and Exchange Commission – that it would announce a new route by the end of March. This is the fourth self-imposed deadline that Northern Pass’s developer has failed to meet since last summer. You’d be forgiven if you started asking yourself whether Northern Pass’s route is the transmission equivalent of vaporware.

For whatever reason, NU has repeatedly misled the public and its investors about the Northern Pass project, and not just the project’s schedule.

• Its claims regarding the climate benefits of the project are based on the demonstrably false assertion that large-scale hydropower has no greenhouse gas emissions. The other New Hampshire benefits that NU ascribes to the project are little more than overblown talking points that do not withstand scrutiny.  
• Last November, NU’s CEO misled investors by falsely claiming broad support for Northern Pass among environmental groups, New Hampshire’s governor, and the regional operator of the electric grid; a corporate spokesperson then misrepresented what he said in an attempt to cover up the misstatements. 
• While it continues to insist Northern Pass-transmitted hydropower needs no subsidies, NU has been openly lobbying to obtain special treatment for large-scale hydropower from Connecticut officials and the Connecticut state legislature.

Securities regulators should take note of this pattern of behavior and insist on honesty and transparency from NU, just as Massachusetts Attorney General Martha Coakley did when NU recently balked at revealing its CEO’s 2012 compensation package. As we’ve said before, investors, the public, and our energy future depend on accurate information and forthright disclosures from energy companies. That’s not what we’re getting from NU on Northern Pass.

(photo credit: Jack Zalium/flickr)

Get ready: long-simmering chatter among lobbyists and officials in state houses and administrative agencies is about to become a loud, insistent chorus proclaiming that New England needs to give Canadian hydropower financial incentives so that our region can meet renewable energy and climate goals. This policy change would be a wrong turn for a region that is trying to build a truly clean energy future.

As we’ve been discussing for several years now, Québec and other eastern Canadian provinces are eager to increase power exports to New England, including through proposed transmission projects like Northern Pass. Our neighbors to the north have developed and are building more power than they need, and, until New England power prices began their historic decline, the economic motivation for increasing exports was clear: Canadian utilities like Hydro-Québec could sell power to customers in New England and the northeastern U.S. at much higher prices than their own domestic customers are paying. Profits from existing exports to the United States were and remain a major contributor to those utilities’ bottom lines, and they saw and planned to take advantage of a major opportunity to increase profits with new transmission capacity and newly developed hydropower facilities.

The economics behind this long-term Canadian strategy are increasingly in question. Following on the heels of recent technical analysis questioning the strategy’s underpinnings, the most recent projections from the U.S. Energy Information Administration show that total U.S. imports of all energy and electricity in particular are slated to decline over the next fifteen years, with electricity imports never again to achieve the peak level of imports seen in 2012. Given the availability of U.S.-based energy supplies at lower long-term prices, especially natural gas but also wind and other renewable sources, there will be less market demand in the U.S. for Canadian power. These projections reflect a very different reality from the prevailing expectations in 2008, when Hydro-Québec’s strategic plan and the Northern Pass proposal were taking shape. In a research note published last week, Stéphane Marione of Canada’s National Bank Financial warned that “none of the Canadian energy-producing provinces can ignore the profound changes that are taking place in the U.S.”

Montréal, we have a problem. In this new world, the potential market profits from Hydro-Québec’s export strategy are far less compelling. Hydro-Québec may not be able to sell power in New England at the prices it needs to recover the costs of building new transmission like the Northern Pass project and new hydropower projects like the Romaine complex and also return substantial export-driven dividends to the provincial budget.

One possible way that Hydro-Quebec could restore some of these profits is by convincing New England states to increase the price New England customers will pay for Canadian hydropower above the market price. While this may directly contradict the widely held assumption (and marketing claim) that Canadian hydropower is a low-cost power source that is economic without any special incentives, the cognitive dissonance has not prevented Hydro-Québec and Northern Pass developer Northeast Utilities from lobbying New England states to achieve just this goal, an effort CLF has opposed around the region, including in New Hampshire. (Hydro-Québec succeeded several years ago in convincing Vermont to allow its power to count towards a portion of the state’s renewable targets.)

Although the utilities’ lobbying is mostly outside the public view, it is increasingly occurring out in the open, with a direct and urgent new tone. Case in point: Hydro-Québec and Northeast Utilities recently filed comments on Connecticut’s draft energy strategy, which contained some language favoring expansion of Connecticut’s renewable portfolio standard program to include Canadian hydropower, the very policy change that the utilities are seeking. (Incidentally, the final strategy, released last week, made a few changes to the language, and Connecticut is now considering whether and how it might incentivize new imports in a separate study, which is due out soon.) So what did they say?

Hydro-Québec, through its U.S. trading subsidiary HQUS, commented that hydropower should be counted towards meeting Connecticut’s renewable objectives and that its hydropower is less costly than other renewables, but not all power in the marketplace:

HQUS urges Connecticut to recognize Hydro-Québec hydropower as a renewable resource and consider how it might contribute to achieving renewable objectives, as well as other important energy and economic goals. HQUS recognizes that Connecticut has multiple objectives for its renewable programs including to support the development of in-state and in-region resources and emerging technologies. However, if Connecticut’s priority is to maintain its commitment to renewable supply in a cost-effective matter, consideration should be given to the participation of Canadian hydropower. Allowing these resources to contribute to renewable objectives offers a pragmatic way for the state to lower program costs in the near term and, if desired, to extend and increase renewable goals into the future. An approach that values the multiple benefits of Canadian hydropower could also create a market signal necessary in today’s market to promote the infrastructure needed for incremental deliveries into the region for the benefit of all consumers….

Some stakeholders suggest that Hydro-Québec hydropower facilities are “cheap” or low cost to construct. This is incorrect. In fact the cost of building hydropower facilities is significant and generally also requires the construction of new transmission facilities to deliver generator output to load centers, which is also very costly. (Hydro-Québec has also proven successful in the development and construction of transmission facilities to deliver large quantities of electricity over long distances.) However, even with the added cost of transmission to deliver hydropower from Quebec into New England, HQUS estimates its costs to be significantly less than the cost of the delivering equivalent quantities of renewable power from other potential renewable resources in and near New England.

Northeast Utilities, through its Connecticut subsidiary Connecticut Light & Power, commented that hydropower delivered through new transmission projects should get incentives, which would count against the state’s current renewable requirements:

Connecticut has an opportunity to tap into Canadian hydroelectric facilities that are available now or under development, through the development of new transmission infrastructure. A Connecticut RPS market design, which acknowledges that RPS can not only enable new generation, but also support new, clean energy transmission infrastructure could, in this instance, provide for significant Connecticut customer savings….

CL&P believes Connecticut could create a new class of RECs for incremental hydro-electric supply that is delivered over a new transmission interconnection that has been built as an economic project (as opposed to a reliability-based one) which would supplant the need for meeting some portion of Class I RPS requirements….

CL&P believes that embracing large scale hydro power delivered on new transmission as a qualified renewable would meet all three of the State’s energy goals:

• It would be cheaper than other clean energy resources,
• It is clean with very low lifecycle CO₂ emissions, established by independent scientific reviews, and
• It is reliable, and would lessen the region’s dependence on natural gas for power generation needs.

It’s clear from these comments – and the utilities’ growing campaign to secure changes to New England’s renewable energy policies – that they are looking for subsidies from electric ratepayers to support new hydropower imports into the region. In fact, the Northeast Utilities comments constitute a direct effort to secure ratepayer subsidies for Canadian hydropower transmitted over Northern Pass, something Northeast Utilities repeatedly claimed it would not seek and does not need (e.g., here, here,  and here).* (For the record, they are mischaracterizing the emissions benefits to support their argument for subsidies. But that’s another story, well chronicled in prior posts.) Certainly, Hydro-Québec’s own comments reveal that its power can no longer beat the market on its own.

It’s also clear that, depending on how it is pursued, this kind of policy change threatens to put New England’s renewable energy industry at a deep and unfair disadvantage and to undermine its growth. Even Northeast Utilities, in the comments linked above, acknowledges this risk.

CLF has been clear that more Canadian hydropower could be a good thing for the region under the right conditions. But why should New England customers be forced to pay an above-market price? State renewable portfolio laws are intended to get new renewable projects built here, not to force ratepayers to pay extra to improve the economics of Québec’s new hydropower facilities and specific transmission development plans. That’s why CLF strongly objected to the draft Connecticut strategy’s mention of potential inclusion of Canadian hydropower in Connecticut’s renewable portfolio standard law. You can read our full comments, which address other major Connecticut energy issues as well, here.

It’s not too late for the New England states to get smart about new imports and make sure that new imports only happen, if at all, in cost-effective ways that allow alternative power sources and companies to compete on a level playing field, respect local communities, and provide meaningful economic and environmental benefits, accounted for in fair and open processes. Committing New England residents and businesses to pay above-market prices for Canadian hydropower isn’t one of them.

* from Northern Pass’s website, accessed today:

Providing economic clean energy—without a government subsidy

This will be one of the few—if not the only—renewable energy projects in the region that does not need a government subsidy to move forward. Hydro-Québec can generate and sell the power to us at prices that will compete with the average market prices that are being set today by fossil fuel power plants.