Comments on: Will Northern Pass raise electric rates in New Hampshire? http://www.clf.org/blog/clean-energy-climate-change/will-northern-pass-raise-electric-rates-in-new-hampshire/ For a thriving New England Tue, 17 Sep 2013 14:27:54 +0000 hourly 1 http://wordpress.org/?v=3.6.1 By: Christophe Courchesne http://www.clf.org/blog/clean-energy-climate-change/will-northern-pass-raise-electric-rates-in-new-hampshire/#comment-1187 Christophe Courchesne Sat, 30 Jul 2011 13:06:57 +0000 http://www.clf.org/?p=5209#comment-1187 Jim and Sandy –

Your interpretation of the TSA filing is consistent with ours. We have seen no direct additional information on this issue beyond the TSA filing and the Presidential Permit application, and the statements in those documents are not necessarily consistent. The Presidential Permit application does state that, “To the extent possible, Northern Pass intends to use existing transmission ROW under an arrangement with PSNH.” We have assumed that this arrangement is either a conveyance of the ROW to Northern Pass (as many documents imply) or a rental agreement. Either way, we agree that it should be expected that PSNH and Northern Pass each have substantial incentives to use PSNH ROWs over other alternatives. CLF believes these incentives should not be relevant to permitting of the project – the key question is what is in the public interest.

]]> By: Jim Dannis http://www.clf.org/blog/clean-energy-climate-change/will-northern-pass-raise-electric-rates-in-new-hampshire/#comment-1186 Jim Dannis Sat, 30 Jul 2011 01:18:06 +0000 http://www.clf.org/?p=5209#comment-1186 Thanks Christophe, excellent post! It’s still hard to see what PSNH, as a separate, stand-alone entity, gains from Northern Pass. Sure, the parent company, Northeast Utilities, gets the fat, above-market 12.56% return on equity, fully guaranteed by Hydro Quebec.

But what does PSNH get?

There has been some suggestion that PSNH may get its own separate money stream from Northern Pass. The first year revenue/expense sheet for Northern Pass included in the FERC TSA filing indicates that NP may pay “right of way rental fees”. Have any facts been developed that would show that PSNH will be paid ROW rental fees by NP, for the 140 miles of existing PSNH ROW that the project would use?

If that were the case (and it is entirely unclear whether it is the case!), that would provide a few explanations. It would explain why PSNH so vehemently opposes any alternative routing that would be “off” the PSNH ROWs. If a more sensible routing (burying the lines on rail or highway ROWs, or the existing northern Vermont route) were used, PSNH would not receive any ROW rental fees for this route.

Also, if PSNH in fact stands to be paid a market value rental for the value to Northern Pass of the existing ROW corridor, the numbers could be very large. On basic financial valuation principles, annual rentals could run well into the tens of millions of dollars. That would give money to PSNH that could represent fingers in the dike for migration and other strategic issues.

Could you post an update with CLF’s thoughts on this, plus any information you’ve managed to find on whether in fact PSNH expects to receive ROW rentals from NP?

Thanks,

Jim and Sandy Dannis

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