How are PSNH’s coal plants like Mark Sanchez? (photo credit: flickr/TexKap)

Earlier this week, the Concord Monitor published a must-read editorial addressing PSNH’s future. Much like an earlier widely-printed op-ed on the subject, the editorial correctly describes the PSNH death spiral of escalating costs, fleeing customers, and dirty inefficient power plants kept alive by massive ratepayer subsidies.

The editorial also points out one key reason why PSNH’s argument that its plants are an insurance policy against high natural gas prices is increasingly off the mark: it ignores the damage that those plants do to the climate and to the environment. In 2012, despite not operating for much of the year, PSNH’s plants were nonetheless collectively the single largest source of greenhouse gas emissions in New Hampshire.

As time goes on, PSNH’s “insurance policy” argument only gets more specious. Relying on inflexible power plants that take many hours to start up and shut down is diametrically at odds with the dynamic and advanced electric grid that will help New England move toward a clean energy future and address concerns around the region’s increasing use of natural gas. We know what we need to do: the region needs to reduce energy demand through cost-effective energy efficiency investments, to deploy clean renewable technologies like wind that displace fossil fuel use, and to optimize the rules of the wholesale electric market to ensure smooth operation of the grid. Indeed, regional grid operator ISO New England’s recent market design efforts will almost certainly make poor-performing, inflexible power plants like PSNH’s less competitive, not more.

Propping up outdated physical assets – with high fixed maintenance costs – in the hopes that they will someday become competitive again is not “insurance.” It’s the kind of backward thinking that no competent manager or economist would endorse.

As a matter of policy, PSNH’s strategy enacts the classic economic mistake of “throwing good money after bad” by placing too much emphasis on “sunk costs,” an unfortunately common problem that James Surowiecki recently discussed in The New Yorker in describing the irrationality of sports teams’ commitments to ineffective players, like the Jets’ Mark Sanchez, after years of poor performance and bloated salaries.

At least sports teams suffer the consequences of their choices – they lose. With guaranteed profit and regulator-approved rates to recover its costs, PSNH and its parent Northeast Utilities have continued to win, even after a decade or more of terrible investment decisions. Unless of course PSNH can be made to pay for the mess it has created.

The key paragraph of the Concord Monitor’s editorial argues precisely this same point:

[L]awmakers must ensure that the lion’s share of the loss is incurred by investors in PSNH’s parent company, Northeast Utilities, not by New Hampshire ratepayers. That includes the huge cost of the mercury scrubber. It was investors, after all, who gambled that it made sense to spend hundreds of millions of dollars to keep an old coal plant running. They could have said no. So it’s investors who should lose if that gamble doesn’t pay off.

As PSNH looks for opportunities to spread its costs to the New Hampshire businesses and households that have escaped PSNH’s high rates, this is timely advice for New Hampshire policymakers. They should heed it.

New Year's Eve in Times Square (photo credit: flickr/Mondayne)

The ball and other ceremonial objects have dropped, and 2013 has arrived. Although we mark the turn of the year with champagne, Auld Lang Syne, and a bevy of news stories and year-end blog posts, there’s not much genuinely “new” about the New Year. We hang a new calendar and start writing 2013 on legal briefs and checks (as the case may be), and life goes on.

Here in New Hampshire, the developer of the Northern Pass transmission project celebrated New Year’s Eve without any year-end changes. As revelers made their way to New Year’s Eve parties, in a classic “news dump” to minimize attention, Northern Pass Transmission LLC (NPT) posted a cryptic “project update” to its website. The update stated:

[W]e have identified a new route in the North Country that we will submit to the New Hampshire Site Evaluation Commission [sic] in the future for consideration and review.  We are in the process of finalizing this new proposal and will soon be prepared to announce its specific details….

We also recognize that while we are communicating with local citizens, stakeholders and public officials across New Hampshire, there is still much that can be done.  We believe this communication and dialogue is critical to the ultimate success of the new route and the project overall and felt it was necessary to take some additional time to continue these efforts before we publicly announce the new routing proposal.

In other words, NPT and its parent company Northeast Utilities (NU) had nothing new to announce, and the public will continue to wait for actual details and updated regulatory filings. And it’s not the first time Northern Pass’s developer has failed to deliver on its promise of a new route.

In May, NU set an August deadline for a route announcement; in July, NU set a September deadline; and throughout the fall, NU promised to finalize a route and file an updated Presidential Permit application with the U.S. Department of Energy by the end of the 2012, even going so far as to say that it had already obtained 99% of the land it needs. In this context, the Concord Monitor aptly reported on the New Year’s Eve “update”: Northern Pass misses deadline to unveil new route.

While NPT’s non-announcement wasn’t a surprise to CLF or others following the project closely, it was an important moment. It was, most of all, an embarrassing setback – the latest blown deadline after a series of blown deadlines stretching back to April 2011, when NPT decided to seek out a “new route” for the northernmost portion of the project.

NPT has been banking on its capacity to pay above-market land prices for a transmission corridor in the North Country. So far, the Society for the Protection of New Hampshire Forests, its supporters from more than two hundred New Hampshire towns and cities and also from around the region and country, and a number of courageous landowners unwilling to sell at any price have achieved remarkable success in blocking NPT’s efforts on the ground, property-by-property. It would appear NPT’s confidence was misplaced.

For NU executives and investors, Hydro-Québec, and Northern Pass enthusiasts in southern New England, the project’s latest blown deadline should be a wake-up call.

It’s not working.

Not NPT’s back-room strategy to assemble a serpentine series of parcels for a new transmission corridor in the North Country, without any meaningful changes to the project’s design or the southern 80% of its proposed route.

Not NPT’s attempts to game the federal permitting process in its favor.

Not NPT’s bogus claims of environmental and economic benefits for New Hampshire and of wide support for the project.

Not NPT’s campaign to discredit affected citizens in the nearly three dozen communities that have declared opposition to the project and the entire New Hampshire conservation community as “not in my backyard” types and “special interests.”

In the New Year, Northern Pass’s developers should recognize that half of the “dialogue” they are promising is listening. The latest blown deadline should signal, loud and clear, that the current Northern Pass proposal won’t be successful, new route in Coös County or not.

As CLF begins a third year of advocacy on the Northern Pass project, some updates are in order:

The “New Route” Drama

With 2013 only days away, it is looking more and more likely that Northern Pass Transmission LLC (NPT) will not have secured 100% of a “new route” for the project’s northernmost portion by year end, as its public statements have been promising for months. As chronicled in a Boston Globe front-page story published earlier this week (the national daily’s first major story on Northern Pass), landowners are rejecting repeated offers from NPT, and our friends at the Society for the Protection of New Hampshire Forests have secured agreements to conserve key parcels along what appears to NPT’s preferred new path. (According to report in yesterday’s Union Leader, NPT officials are readying some kind of “update” on the project’s progress, which may raise more questions than it answers.)

If NPT fails to make good on its promised “new route,” it will be a singular embarrassment and signal more wasted months of self-inflicted delay. It also will continue NPT’s troubling pattern of misleading investors and peddling falsehoods about the project.

Whatever the success of NPT’s attempt to buy a transmission corridor through New Hampshire’s North Country, Northern Pass overall will remain the same flawed proposal that affected communities and stakeholders have overwhelmingly rejected over the last two years. Susan Arnold of the Appalachian Mountain Club and I penned an op-ed with this message, and it was widely published in New Hampshire newspapers this month. Please take a moment to read the op-ed here.

NU’s False Statements Get Noticed

Over the last month, the Boston Globe, the Concord Monitor, Connecticut newspapers, and NHPR (complete with audio) published stories on Northeast Utilities CEO Tom May’s blatantly false statements about support for Northern Pass. Instead of correcting the comments, NU’s spokesperson compounded Mr. May’s misstatements by insisting, contrary to any possible interpretation of the comments, that Mr. May was speaking about support for the Cape Wind project – a renewable energy proposal backed by a strong public campaign that is co-sponsored by many of the region’s environmental groups. The contrast with Northern Pass couldn’t be starker.

A Broken Permitting Process

The Department of Energy’s permitting process for the Northern Pass project remains tainted by its abdication of responsibility to select an independent and impartial contractor to prepare the crucial environmental impact statement for the project. In a recent letter to Senator Shaheen, DOE repeated its prior position that it sees nothing wrong with the way the current contractor team was selected because NPT’s extraordinary role in the selection process was not unusual. As I explained in October, a precedent of repeating a mistake is no justification. In November, CLF filed a new Freedom of Information Act request to understand the activities of the contractor team, DOE, and NPT during the last year and the extent of NPT’s influence over the direction of the permitting process.

An Underground Alternative Emerges

Meanwhile, we are learning more about a realistic alternative to NPT’s current proposal that could address some community concerns and provide new public revenues. In November, a state legislative commission released an important report highlighting the feasibility of siting underground high-voltage transmission lines in state-owned transportation corridors. The report can be found here (PDF) and followed a lengthy process of collecting testimony and input from dozens of stakeholders, including CLF and a number of other conservation organizations. The report found that underground transmission technologies and corridors are “being used extensively throughout the U.S. and internationally,” “may increase the reliability and security of the electric transmission system,” and “may be technically and financially competitive with other transmission designs and locations.” The commission pointed to other pending transmission projects that incorporate underground technologies sited in state-owned transportation corridors as an indication that this approach “can be technically and financially viable.” (Earlier this week, New York officials recommended approval of one of these projects – the Champlain Hudson Power Express between Québec and New York City, which now includes more than 120 miles of underground high-voltage transmission in active railroad corridors and highways.)

While the state agency officials participating in the commission were reluctant to endorse specific policy proposals in the report (which they saw as outside the commission’s charge), many commission members emphasized the need for a proactive, comprehensive energy plan and a regulatory framework that would help New Hampshire assure that new transmission projects provide meaningful public benefits.

A majority of the commission’s legislator members recommended changes to the state siting process for energy projects, including a requirement that a transmission developer bring forward an underground alternative to any overhead project. It is expected that these recommendations will be among the many legislative proposals to amend the state siting law during the 2013 session of the New Hampshire legislature.

*             *             *

What will 2013 bring for the Northern Pass project and New Hampshire’s energy future? Stay updated by signing up for our newsletter Northern Pass Wire, and be sure to check in with CLF’s Northern Pass Information Center (http://www.clf.org/northern-pass) and all of our latest Northern Pass posts on CLF Scoop. You can also follow me on Twitter, where I often point to recent news articles on Northern Pass.

photo credit: TimothyJ/flickr

Today, the New Hampshire Public Utilities Commission takes up PSNH’s request to charge its customers 9.54 cents per kilowatt hour for electric energy service in 2013. In a op-ed published this week, long-time CLF friends Ken Colburn and Rick Russman explain why New Hampshire’s crisis of escalating PSNH rates – and how New Hampshire policymakers resolve it – may be the defining economic issue for New Hampshire’s new class of leaders next year.

With PSNH’s rates to be by far the highest in the state and almost three cents higher than those of its sister utility NSTAR in Massachusetts, New Hampshire is dealing with an untenable situation: small businesses and residents are subsidizing PSNH’s above-market costs to operate and maintain dirty, inefficient, and uneconomic coal plants, to the tune of $128 million.* The average residential customer will pay $212 extra in 2013 for the dirtiest energy in the region.

To put $128 million in perspective, in 2011 New Hampshire invested less than a seventh of that amount, a mere $17.6 million, in electric energy efficiency programs – an energy solution that is lowering rates, reducing pollution, avoiding expensive new transmission projects, and creating jobs.

New Hampshire energy users are in effect giving this money away to keep alive New Hampshire’s biggest sources of toxic and greenhouse gas pollution (even though PSNH projects they will only operate at around 25% of their capacity in 2013) and to pay dividends to PSNH’s owner, New England mega-utility Northeast Utilities. And the situation will only get worse with time as PSNH customers join the thousands who have already picked an alternative energy supplier, leaving a shrinking base of customers to bear the heavy costs of PSNH’s coal fleet. (If you’re still a PSNH customer, you should definitely make the switch before the new year begins and PSNH’s new rates kick in.)

The blame for this economic and environmental travesty lies squarely with PSNH’s self-serving failure to plan for the future.

Yet PSNH is already trying to make the case that it needs a “fix” from the New Hampshire legislature to protect its coal plants, its 10% profit margin guarantee, and its protection from cleaner, cheaper competition. What’s even more bizarre – and indicative of its refusal to approach these issues honestly – is that PSNH is pinning its skyrocketing rates on the very factors that have reduced electric rates for everyone else in New England – namely, investments in energy efficiency and environmental protection and the increasing use of natural gas and competitive renewable energy sources. PSNH’s foolhardy but lucrative investments in its outdated power plants – for which it fought tooth and nail over the last decade – are the culprit, not environmental requirements that apply to all power plants in New Hampshire and across the region.

Please take a moment to read the op-ed and share widely with friends, neighbors, and especially your new representatives in Concord. For the good of the state’s economic and environmental health, they need to hear from you!

*  The math: PSNH customers will pay a 2.85 cent “premium” for every kilowatt hour over and above PSNH affiliate NSTAR’s market-based rates, and PSNH is projecting that it will sell more than 4 billion kilowatt hours of power to its remaining customers in 2013. The average household in New Hampshire uses 7,428 kilowatt hours per year.

PSNH's Merrimack Station

Grounded in our Colonial history, America’s harvest feast – Thanksgiving – is a quintessentially New England holiday, a time to be grateful for our region’s rich agricultural traditions of hard-fought bounty and community-minded collaboration.

As we head off to celebrate with our families (as the famous New England poem goes), it is worth remembering that many of our neighbors in New England are struggling, day in day out, to cobble together three meals of good, healthy food. We know that, here in my relatively prosperous state of New Hampshire, more than 1 in 5 households with children experience food insecurity, and more than 130,000 people turn to emergency sources of food like food pantries every year (a number that has more than doubled in the last six years). Hunger and poor nutrition pose special risks for children, who may experience lasting damage to their health, educational outcomes, and economic opportunities.

The stark reality of childhood hunger is one of the driving forces behind CLF’s Farm and Food Initiative, our ongoing work to build a thriving, sustainable food system that grows our region’s farming economy – in rural and urban areas alike – to benefit all people in New England.

In this spirit, CLF is grateful to be a part of a new effort in New Hampshire to tackle childhood hunger, which was formally launched yesterday. Spearheaded by Children’s Alliance of New Hampshire and a diverse coalition of stakeholders known as NH Hunger Solutions, the effort – New Hampshire’s Roadmap to End Child Hunger – has identified three key goals for the state: (1) increase access to healthy food by expanding the number of families that benefit from school meal, food assistance, and nutrition programs, (2) strengthen New Hampshire’s food systems with policies that improve the availability of affordable, local, healthy foods for families of all economic groups and that strengthen farmers’ connections with schools and community food programs, and (3) ensure overall economic security for all families by enhancing public financial assistance for those in need. Yesterday’s rollout of the Roadmap was a terrific event in the gymnasium at Henniker’s Community School, featuring a number of community and food system leaders. You can read more about the event in this NewHampshire.com article.

We at CLF are particularly gratified that the Roadmap recognizes the importance of a strong, resilient food system that connects all people to healthy, affordable foods produced locally and sustainably by New England and New Hampshire farmers. As we noted on Food Day last month, CLF and others are hard at work identifying the policy and practical barriers to this kind of system and developing recommended solutions.

As implementation of the Roadmap begins – in collaboration with the companion efforts of Food Solutions New England to build a statewide Food Advisory Council – we look forward to helping New Hampshire achieve the Roadmap’s ambitious goals. As we share Thanksgiving with our families, CLF and our partners are committed to living up to New England’s heritage of sharing the harvest.

This week, the developer of the Northern Pass transmission project, Northeast Utilities (NU), sunk to a new low. In a presentation at a utility industry conference, NU CEO Tom May stated that:

• “[T]his project has the support of every environmental group in New England basically.”

This is unequivocally untrue. In fact, CLF is not aware of a single New England environmental group that supports the Northern Pass project as proposed. You don’t have to take our word for it: literally dozens of New England’s environmental organizations – regional, state, and local – have registered significant concerns with, or outright opposition to, the proposed project in public comments to the U.S. Department of Energy. May’s statement is all the more puzzling given the energy that NU has devoted to attacking the efforts of groups like CLF (e.g., here and here), the Appalachian Mountain Club (e.g., here), and the Society for the Protection of New Hampshire Forests (e.g., here).

• The regional electric grid operator, ISO-NE, has been a “big proponent of this project.”

This is also inaccurate. Northern Pass is an “elective” transmission project that is not intended to address any electric grid needs identified by ISO-NE. As a result, ISO-NE is obligated to consider the project objectively alongside competing elective projects (of which there are several), and Northern Pass is not specifically endorsed in any of ISO-NE’s planning documents, such as ISO-NE’s recently released 10-year Regional System Plan for the New England electric grid. Because it is an elective project that ISO-NE didn’t ask for and doesn’t plan to rely on, ISO-NE’s primary role in reviewing Northern Pass will be to assure that it won’t have an adverse impact on the reliability of the grid, not to advocate for the project.

• New Hampshire’s new governor-elect, Maggie Hassan, is “supportive of the project.”

Governor-elect Hassan’s website contains this statement to the contrary:

Maggie opposes the first Northern Pass proposal.  As a state senator, Maggie worked to pass a constitutional amendment to prohibit the use of eminent domain for private gain, and she opposes the use of eminent domain for this project.

Maggie believes that we must protect the scenic views of the North Country, which are vital to our tourism industry.  As Governor, she will ensure that, in accordance with the law, New Hampshire undertakes a rigorous review process of any proposal and provide significant opportunities for public voices to be heard.

Maggie hopes that the next proposal will address the concerns of the communities involved.  She believes that burying the lines would be a more appropriate approach, and also supports looking into home-grown energy sources, such as the new biomass plant under construction in Berlin.

Governor-elect Hassan has also expressed her support for Governor Lynch’s approach to the project: namely, that the directly affected communities must support the project before it moves forward. With almost all the communities on the record opposing the project (and no willingness on the part of Northern Pass’s developer to consider burial as an alternative to overhead lines), it’s impossible to characterize Governor-elect Hassan’s position as support for the project.

(May’s remarks on Northern Pass are at 21:00 – 25:30 in the webcast linked here.)

Since the Northern Pass project was announced more than two years ago, CLF has identified significant problems with the proposal, including the developer’s egregiously misleading marketing of the project’s environmental attributes and other supposed benefits. CLF has repeatedly emphasized, in the words of our President John Kassel, that “long-term supplies of hydro, wind and other sources of power – that respect and significantly benefit the landscape through which they are transmitted, support rather than undermine the development of New England’s own renewable energy resources, replace coal and other dirty fuels, keep the lights on at reasonable cost, and accurately account for their impacts – are what New England needs.” Thus far, the Northern Pass project, as proposed, meets none of these criteria, and therefore is not a project CLF can support.

Beyond our specific concerns, we’ve been fighting for some basic principles that should not be controversial, such as transparency, fairness, and especially honesty. Again and again, NU has unfortunately refused to abide by these principles, repeating discredited claims about the project’s emissions reductions and outdated accounts of other benefits, marginalizing the many stakeholders raising legitimate questions about the project, and employing bullying tactics against project opponents (for the most recent example, see here).

As we explained more than two months ago, Northern Pass still has no clear path forward. In concocting a story of broad-based political and stakeholder support, NU is – deliberately or recklessly – misleading its investors with plainly false information: an unacceptable breach of NU’s legal obligations as a public company and of investors’ trust. It is incumbent upon NU to correct the record immediately and to jettison its aggressively deceptive approach to securing approval of the Northern Pass project. The public deserves far, far better.

It’s not news that New Hampshire’s ratepayers are paying too much money to support PSNH’s ancient, massively inefficient, and heavily polluting coal-fired power plants. CLF has repeatedly called out PSNH’s calamitous insistence on continuing to operate coal-fired units at Merrimack Station in Bow and Schiller Station in Portsmouth and the resulting exorbitant electric rates that PSNH customers pay.

It’s still possible to be shocked, however, by the magnitude of PSNH’s growing problems and the environmental and economic harm that PSNH’s collapse is causing in New Hampshire. And the situation is worsening: new data are confirming the futility and waste of operating coal plants, and New Hampshire ratepayers are, in what is now a full-scale stampede, abandoning PSNH to meet their electric needs with cleaner, cheaper energy from competitors.

Here is an update on PSNH’s so-called “death spiral”:

Unprecedented Idling of Power Plants

A power plant’s “capacity factor” is a ratio between the amount of electricity the plant actually produced over a given period and the amount that it would have produced had it been running at full capacity during that time. Because coal plants – like nuclear plants – take some time to ramp up and take offline, they are built to operate with a very high capacity factor, on a 24-7 basis. In 2007, PSNH operated Merrimack Station’s coal boilers at 91% capacity and Schiller Station’s coal boilers at 84%.

The new reality for PSNH: these numbers have fallen precipitously since then; over the first nine months of 2012, Merrimack’s coal units had a capacity factor of 31%, and Schiller’s coal units 9.7%.

* 2012 data through September (source: EPA and ISO-NE data)

With dirty coal being trounced in the marketplace by cheaper power sources, especially natural gas, it is a disproportionately expensive undertaking to operate a coal unit – and a veritable folly at these levels of output.

Energy Service Rate Hike in 2013

The problem for PSNH’s customers is that even though the writing is on the wall for coal power plants around the country and here in New England, PSNH is still guaranteed a ratepayer-funded profit for owning Merrimack and Schiller, which is handed over to PSNH whether or not the plants produce power. Add it all together – PSNH’s operating costs for Merrimack, Schiller, and its other power plants, PSNH’s guaranteed profit, and the cost of the “replacement” power PSNH buys from the regional market to provide electricity to its customers while its plants sit idle – and PSNH customers are paying a huge and increasing premium over rates in the competitive market.

While there are many separate charges on an electricity bill, the “energy service” rate reflects the costs of generating the electricity. At the end of September, PSNH filed a projection (PDF) with the New Hampshire Public Utilities Commission warning of a residential energy service rate increase to take effect on January 1, 2013. The utility requested a 26% increase in the amount customers pay for electricity supplied by PSNH, bringing the overall default energy service rate to 8.97 cents per kilowatt hour. PSNH has also separately requested a permanent rate increase to recover the costs of the $422 million mercury scrubber that, if passed, would bring the default energy service rate to 9.27 cents per kilowatt hour.

By contrast, just over the border in Massachusetts, PSNH affiliate NStar’s residential customers will be paying a mere 6.69 cents per kilowatt hour for power that NStar almost wholly buys from the regional market. NStar’s rates are, like virtually all New England utilities other than PSNH, reflective of the historically low electricity prices available in that market, which have steadily fallen since 2008.

What this means is that, come January, the average PSNH-served New Hampshire home will be subsidizing PSNH and its power plants to the tune of $169 per year, or more than $190 per year with the addition of the extra charge for the scrubber.

Residential and Small Business Customers Increasingly Abandoning PSNH

As CLF documented recently, PSNH’s increasing rates represent an enormous market opportunity for competitive energy suppliers in New Hampshire.

They are seizing it. September 2012 data show 17,507 residential PSNH customers (about 5%) purchasing power from non-PSNH suppliers, an increase of more than 6,000 customers over the month before and a whopping 16,000 more than September of 2011. The number of small businesses fleeing PSNH’s electricity supply has grown at a steady rate: 14,617 purchased power from non-PSNH suppliers in September 2012, compared to 9,351 in September 2011.

(source: PSNH filings with N.H. Public Utilities Commmission)

Meanwhile, the most recent data show that there are now virtually no large or medium-sized businesses that buy power from PSNH.

While retail choice in suppliers for New Hampshire’s residential and small business customers was slow in coming, the available options have expanded considerably in the past year. Resident Power, Electricity NH, and Glacial Energy all quote lower rates than PSNH, and they are increasingly offering additional choices of electricity supply from coal-free, renewable, and sustainable sources at fixed rates lower than PSNH. We can expect an even faster exodus to these suppliers and new ones like them after PSNH’s rate increase in January.

Despite the rapidly increasing number of customers choosing alternative electricity suppliers, the vast majority of New Hampshire’s residential customers still purchase their electricity from PSNH. Many customers are unable or too busy to research comparative rates and make the change. And energy supply choice alone will neither affect the astounding subsidies that PSNH is getting to prop up its failing business nor force PSNH to make the economically rational decision to retire its dirty, outdated coal plants.

We need to correct this massive public policy failure and bring to an end the severe economic, environmental, and public health damage that PSNH’s ancient coal plants are causing in the Granite State. There is now reason to believe that we are turning a corner. Maggie Hassan, New Hampshire’s new governor-elect, has been outspoken about the importance of reducing pollution from electricity generation, especially from PSNH’s coal fleet. CLF is ready to work with the new administration and Legislature to develop a comprehensive climate and energy plan that transitions the state out of the grip of PSNH’s coal-fired business model and moves New Hampshire toward a cleaner and affordable energy future.

Fellowship Attorney Caitlin Peale co-authored this post.

Members of NH's Congressional delegation are demanding that DOE Secretary Steven Chu (pictured) explain DOE's process for selecting the current contractor team working on the Northern Pass envrionmental review.

Two weeks ago, CLF exposed and brought to the public’s attention internal government documents showing that the Department of Energy (DOE) has illegally allowed the developer of the Northern Pass transmission project, Northern Pass Transmission LLC (NPT) to have significant and improper influence over the ongoing permitting process and environmental review of the project. After filing its concerns about the information with DOE, CLF issued a call to action, urging the public to join CLF in demanding that DOE replace the contractor team charged with preparing the crucial Environmental Impact Statement (EIS), which was handpicked by NPT, with a new, unbiased contractor or internal team with no conflict of interest.

We’re pleased to report that the responses – your responses – to the revelations and our call to action has been remarkable.

In the past two weeks, more than 300 members of the public (and counting) filed comments with DOE demanding replacement of the contractor team and a new commitment to a fair and open permitting process for Northern Pass. (You can take action yourself and file your own comment via this link.)

Yesterday, in a joint letter to DOE, a group of nine organizations representing New Hampshire’s conservation community and the grassroots opposition to Northern Pass, along with more than 60 individuals, expressed their deep concerns about the information exposed by CLF and called for a new EIS contractor with no conflict of interest. (Coverage on NHPR here.)

In the past week, Senator Jeanne Shaheen, Senator Kelly Ayotte, and Congressman Charlie Bass have each sent letters to DOE Secretary Steven Chu demanding that the matter be reviewed and addressed immediately. (Union Leader coverage here.)

• In her letter to Secretary Chu, Senator Jeanne Shaheen demands an “immediate, detailed response” from DOE to determine whether a conflict of interest exists, emphasizing that “in order for the public to have confidence in DOE and the outcome of any Presidential Permit application there can be no conflict of interest or appearance of conflict in the application process” and that “[a] loss of faith from stakeholders would be difficult, if not impossible, to restore. “
• Senator Ayotte’s letter urges DOE to review CLF’s concerns and highlighted the need to “make certain that the outcome of this process is perceived as legitimate and that the process remains transparent.”
• Congressman Bass is asking for a “detailed explanation of the DOE selection of the EIS contractor” in light of “the importance of this matter to the state of New Hampshire and the absolute necessity for a fair and transparent process for all stakeholders.”

It’s clear that the documents CLF disclosed provide only the part of the story of DOE’s mishandled process so far – we don’t know exactly what DOE did internally, in phone calls with NPT and others, or in closed-door in-person meetings. That’s why the members of the delegation are right that DOE owes them and the public a detailed explanation of what happened.

Since CLF’s detailed filing with DOE, we’ve actually learned more about the process from NPT than from DOE. In a letter sent to DOE last week, NPT admitted – rather than rebutted – the facts CLF has exposed. NPT admits that DOE directed it to conduct the contractor search, including the vetting of potential contractors for conflicts of interest .  NPT also admits that it – not DOE – drafted several key documents governing the environmental review and DOE’s arrangement with the contractor team. In effect, NPT admits its enormous, behind-the-scenes role and still can’t understand why anyone would have a problem with it. (We previously explained why NPT’s and DOE’s defensive responses to this effect were off the mark.)

NPT’s letter also publicly disclosed a crucial part of the story for the first time. According to a footnote in the letter, NPT was permitted to “rule out” the qualified environmental review teams at DOE’s own National Laboratories because their rates were higher than NPT wanted to pay. The fact that DOE deferred to NPT’s desire to keep down the costs of the federal environmental review of Northern Pass (even as it spends many multiples of market value to acquire properties in Coos County for the northernmost corridor for the project) is among the most troubling information we’ve yet obtained: if true, DOE did not even consider hiring its own experts to prepare the EIS. It’s hard to imagine clearer evidence that the contractor selection process violated the federal regulations requiring that that the choice be “solely” DOE’s or that the violation directly threatens the integrity and rigor of the environmental review.

Above all, the public’s responses to the revelations about NPT’s role in the DOE permitting process make crystal clear that New Hampshire deserves – and is insisting on – a truly fair, rigorous, and objective review of the Northern Pass project, not the deeply mishandled, applicant-driven process we’ve seen to date.

For more information about Northern Pass, sign-up for our monthly newsletter Northern Pass Wire, visit CLF’s Northern Pass Information Center (http://www.clf.org/northern-pass), and take a look at our prior Northern Pass posts on CLF Scoop.

Yesterday, the U.S. Department of Energy (DOE) and Northern Pass Transmission LLC (NPT) reacted in the media (here and here) to news stories reporting that the federal review of the Northern Pass project has been tainted by DOE’s abdication of critical responsibilities to the project developer and permit applicant, NPT. It is frustrating, but not unexpected given what the document trail revealed, that DOE and NPT don’t see any problems with the permitting process to date.

DOE says that it exercised independent judgment in selecting the contractor team and considered other contractors for the job (while it won’t say which ones or how many, apparently absent a FOIA request, which – if CLF’s last request is an indication – could take as long as a year).

While it is clear DOE signed off on the new team, DOE is ignoring that its actions were wrong because of the undisputedly pervasive role DOE allowed NPT to play –with NPT’s counsel personally recruiting, assembling, and coaching the team, helping the team make its proposal to DOE, making a side agreement (of which DOE apparently has no copy) with the team setting the budget and schedule for the process, and actively helping to draft key DOE documents governing the environmental review.

Giving NPT this role and opportunity for influence is at odds with the core purpose of the legal requirement that any third-party contractor be chosen solely by DOE without meaningful participation by the permit applicant: the selected contractor must have no conflict of interest in favor of the applicant – even a perceived conflict of interest. Like DOE itself, the contractor must be seen by the public as an impartial, independent arbiter of the data, the facts, and the analysis contained in the environmental impact statement of the project. Here, the public can have no confidence that this will be true precisely because NPT was so instrumental in choosing the contractor team. The documents make clear that the contractor team owes its job to NPT. How can the public have any confidence that the team will fulfill its obligations indepedently, with no special treatment or preferences for NPT?

DOE’s other comment – that it is routine for applicants to be involved in selecting contractors – is merely an admission that DOE always handles permitting processes in unacceptably close coordination with developers. “We always do it this way,” is no excuse for illegal and improper conduct.

Indeed, it is telling that DOE has no comment on evidence of actual bias on the part of a senior member of the contractor team who – even before being hired – stated the position (one favored by NPT) that the Champlain-Hudson transmission project is not an alternative to be considered as part of the Northern Pass alternatives review. This evidence means that there is not only a risk of bias with the current contractor team, but that bias already has crept into the process – and on a critically important aspect of the environmental review.

By just adding CLF’s filing (PDF) to the pile of public comments received on the project to date, DOE appears to be following a strategy of bureaucratic defensiveness and imperviousness to public feedback – a strategy that is reflected in one of the most troubling documents CLF obtained, an internal email revealing that one of DOE’s principal priorities is to avoid “setting the precedent of backing down under the weight of public criticism.” If DOE continues on this path, as we say in our filing, “it would be fair for the public to conclude that DOE is not interested in meaningful public involvement and is incapable of reaching a legitimate final decision on the permitting applications that the President and Congress have entrusted it with faithfully reviewing on the nation’s behalf.”

For its part, NPT’s response reflects the absurd allegation that CLF merely is trying to cause delay. To the contrary, our filing with DOE implores the agency to fix the process now, before the permitting process begins again in earnest. Given that there are still several months before NPT says it will restart the process by filing a new northernmost route for the project, DOE has ample opportunity to cure deficiencies.    To be clear, every day of delay that has occurred to date is NPT’s doing – DOE has allowed NPT to drag out the federal environmental review for two years so that it can assemble a new northernmost route, without a definitive end in sight.

NPT also says CLF is trying to “preemptively discredit” the process. Of course, it isn’t CLF’s filing but instead DOE’s and NPT’s own actions, documented in black and white in the 22 exhibits to our filing, that are preemptively discrediting the process.

You can help CLF tell DOE – in only a few clicks – that its actions are unacceptable and that New Hampshire deserves a truly fair review of Northern Pass. Please take action now.

To learn more about this issue, take a moment to review our posts from earlier this week here and here.

For more information about Northern Pass, sign-up for our monthly newsletter Northern Pass Wire, visit CLF’s Northern Pass Information Center (http://www.clf.org/northern-pass), and take a look at our prior Northern Pass posts on CLF Scoop.