Would Northern Pass Swamp the Regional Market for Renewable Projects?

Dec 21, 2011 by  | Bio |  2 Comment »

photo credit: Witthaya Phonsawat

With the Northern Pass project on the table, as well as other looming projects and initiatives to increase New England’s imports of Canadian hydroelectric power, the region’s energy future is coming to a crossroads. The choice to rely on new imports will have consequences that endure for decades, so it’s critical the region use the best possible data and analysis to weigh the public costs and benefits of going down this road. To date, there have been almost no objective, professional assessments of the ramifications.

Today, CLF is making available to the public a technical report prepared by Synapse Energy Economics addressing a crucial issue: the potential effects of new imports on the region’s own renewable power industry. 

The report, Renewable Portfolio Standards and Requirements (PDF), explains how the Renewable Portfolio Standards (RPS) of each New England state and New York address hydropower and then examines the potential effects of allowing Canadian large-scale hydropower to qualify for incentives by allowing such power to count toward states’ goals for renewable power under RPS programs.

Vermont is currently the only state that allows Canadian hydropower to qualify for its (now voluntary) RPS. If Vermont elects to use Canadian hydropower to fulfill all or most of its RPS goal (which is contemplated by pending legislation that would make Vermont’s RPS mandatory), there would be a modest but important reduction in the incentives available to new renewable projects in the region. The report concludes that there would be a much more significant impact if the RPS programs in other states were changed to allow Canadian hydropower to qualify (as was proposed in New Hampshire and Connecticut earlier this year and is being discussed right now in Massachusetts). In that scenario, imports from Northern Pass (or import projects of similar size) would swamp the market, taking up 45% of the region’s mandate for new renewable power and deeply undermining the viability of new renewable development in the Northeast.

This finding is a new illustration of why CLF opposes changing RPS laws to count large-scale hydropower toward the region’s renewable goals, a result that would both harm local renewable projects and send incentives funded by New England ratepayers out of the country to suppliers that do not need them.

For their part, Northern Pass’s developers have downplayed any risks to local renewable energy but have refused to refrain from lobbying for and securing the very changes to the RPS laws that Synapse predicts would, when paired with new imports through Northern Pass, cut the legs out from under renewable energy based in New England. It is no wonder that it’s not only CLF sounding the alarm on this issue:  electric industry veterans like Cynthia Arcate and the trade association of New England’s competitive electric generating companies have also expressed concern.

The bottom line for CLF: any plan to increase imports will need a robust and comprehensive set of enforceable commitments – which are completely absent in the current Northern Pass proposal – for the region to ensure that New England’s own renewable energy industry will prosper and grow into the future. 

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

2 Responses to “Would Northern Pass Swamp the Regional Market for Renewable Projects?”

  1. Katharyn S Hok

    What kind of enforceable and comprehensive commitments need to be made by the Northern Pass to ensure that New England’s own renewable energy industry will prosper and grow into the future? It seems as if our laws should read that the 45% of power required from renewable energy sources must be generated in New England itself. Then the northern pass would not deter this development in the same way.

    Please comment.

    • Christophe Courchesne

      State renewable energy laws are complex and must operate within federal constitutional parameters, but you are absolutely right that they should be designed, in part, to focus on incentivizing local, renewable sources. Current law already does this to some extent. The question of how to make renewable energy laws more effective at incentivizing local development is important, and a more robust requirement like the one you envision – if crafted appropriately – is something to be explored; some changes to the RPS in New Hampshire are now pending in the legislature that would help move us further in that direction. Unfortunately, many in the region’s state houses feel that the laws should be even looser than they already are, and some are trying to eliminate renewable energy laws altogether, so securing improvements remains a challenge.

      As an example of the type of commitment that is necessary, NPT and its affiliates could commit not to seek changes to qualify large hydro for RPS incentives. This could be a condition of the NU/NSTAR merger approval in Massachusetts and/or Connecticut, and of the Northern Pass project’s permitting. So far, NPT has rejected the idea of making this commitment. There are many other potential ways to safeguard local renewable energy that should be evaluated, and we will be advocating for a close look at them during the upcoming proceedings regarding the project. Thanks for your comment, Katharyn.