PSNH's Merrimack Station (photo credit: flickr/Jim Richmond)

I appeared on NHPR’s The Exchange with Laura Knoy this morning, and the topic was the potential energy and economic impacts of the Northern Pass project. The show provided a good opportunity to explain why the project is inspiring so much opposition, why CLF has been skeptical of the current proposal, and how Canadian hydropower could play a role in the New England electric system if pursued appropriately. There was also a segment on the project’s potential impact on property values. You can catch the replay here if you’re interested.

Joining me on the show was Julia Frayer, an economist hired by the Public Service Company of New Hampshire (PSNH) to tout the energy and economic benefits of the project. Recently, she penned a widely-reprinted op-ed and provided testimony to the New Hampshire legislature, suggesting the project will be a boon to consumers and the reliability of the electric system.

Unfortunately, and as I made an effort to point out on the show, the arguments for the current proposal are pleasant talking points without much to back them up. All the cited benefits are speculative, rather than firm commitments, and are not forthrightly presented alongside the proposal’s potential costs. As any student of economics can attest, an intelligent discussion about the economics of a project requires that we at least try to describe and compare the costs and benefits.  We know that the project may have significant negative impacts, ranging from the environmental impacts of generating the power in Canada to the potential effects of major new transmission lines on New Hampshire’s tourism and recreation industries. PSNH and the project developer, Northern Pass Transmission, LLC, have stubbornly failed to acknowledge these impacts, and there is no evidence they were taken seriously in the planning of the current proposal.

One point worth highlighting – the current plan calls for all of the supposed clean energy benefits and electric rate reductions to be delivered through the wholesale market, where Hydro-Quebec intends to sell the power delivered by the project.  But these benefits would mostly bypass the very residential ratepayers in New Hampshire who pay PSNH for electricity – because PSNH acquires very little power from the wholesale market. Instead, as customers of PSNH’s retail power, PSNH residential customers have been left to shoulder the uneconomic costs of PSNH operating several coal-fired generating units – and to pay the highest electric rates in New Hampshire as a result. Northern Pass does nothing to change this situation.  Many commercial ratepayers in PSNH territory have “migrated” in increasing numbers to other utilities that – unlike PSNH – do buy substantial power from the wholesale market to supply their customers. Residential ratepayers don’t have this choice – which means they’re saddled with PSNH’s higher costs, as PSNH loses more and more of its commercial rate base.  Again, Northern Pass does nothing to change this situation.  On closer inspection, the claimed benefits for New Hampshire consumers look more like phantom benefits than anything real.

The proposal promises to send huge profits to Hydro-Quebec, as it bids power into the wholesale market (easily paying back its investment in the transmission lines), and to provide a revenue stream of transmission payments to Northeast Utilities, PSNH’s parent company. But this structure makes very little sense because it means New Hampshire residents will continue to bear the burden of high cost power and dirty air from PSNH’s coal plants and will also face the environmental and economic impacts of a massive transmission project, while the power would only displace relatively less-polluting natural gas generation and may undermine the development of local renewable energy projects in the state. If it does indeed lower costs on the New England market, the effect will be to increase costs for PSNH’s residential customers as more large customers migrate to the competitive market and fewer customers are left to pay the costs of PSNH’s expensive coal plants.

The current proposal is coming into focus as a bad energy and economic deal for New Hampshire, and regionally the benefits seem less than impressive – especially because the emissions reductions made possible could be so much greater if there was a firm commitment to pair the new imports with the retirement of coal-fired units. As the project continues to wind its way through the federal and state permitting process, CLF will keep pushing for the project to make sense for New Hampshire and for the energy future of the region as a whole.

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

Photo credit: Flickr/peupleloup

As noted in numerous media reports (for example, here and here), the Province of Québec has formally announced its “Plan Nord,” a 25 year, $80 billion plan to develop Québec’s northern region (official “nutshell” here).  Plan Nord reflects major new public investments in mining operations, hydroelectric and wind energy facilities, forestry, and transportation and communications infrastructure.

The scale of Plan Nord is hard to overstate; Premier Jean Charest is proudly proclaiming that Plan Nord is the “project of a generation,” “a sweeping, human adventure,” and “unique both in its scope and its approach.”  The plan adds that “the scope of the Plan Nord will make it in the coming decades what the development of La Manicouagan and James Bay were to the 1960s and 1970s.”  The land area covered by the plan is about twice the size of Texas.

The formal public launch of Plan Nord is an opportunity to think about what Québec’s plans may mean for New England and our regional energy future. A fundamental part of Plan Nord is developing the region’s energy resources, including new hydroelectric generating capacity totaling 3,000 megawatts.  (This amount of power is equivalent to five Vermont Yankees.) While important to the plan’s projections of provincial energy needs, these facilities are also integral to Québec utility Hydro-Québec’s strategy to step up exports of electric power to the northeastern United States, including New England.  The plan itself notes Vermont’s recent renewal of a long-term agreement to import 225 megawatts of power from Hydro-Québec as a key early success.

Although Québec has marketed Plan Nord as at the vanguard of “sustainable development,” any plan this massive and costly should inspire a fair amount of skepticism, especially when its scale is compared to the breathtaking ecological manipulations of Québec’s recent history. Indeed, the plan’s economic focus on new investments in mining suggests less than a total commitment to sustainability. On the other hand, as our colleagues at the Pew Environment Group’s International Boreal Conservation Campaign noted yesterday, the plan commits to protection of 50% of Québec’s northern land area for environmental protection and safeguarding biodiversity. It remains to be seen if this commitment is meaningful; if it is, it would be a historic and farsighted move.

CLF is deeply concerned about what this plan – including its focus on resource extraction and exploitation - means for Québec, New England, and indeed the global environment.  Hydroelectric developments on the scale contemplated by Plan Nord involve inundation of vast land areas, which in turn results in the destruction of wide swathes of Canada’s boreal forest – one of the world’s largest intact carbon sinks - as well as methane and other greenhouse gas emissions from decomposing vegetation and releases of heavy metals from flooded soils. Hydropower reservoirs in Québec already cover an area greater than the size of New Hampshire, and further inundation will be required for Plan Nord projects.   These projects have dramatic impacts on indigenous people and their way of life; at least some indigenous groups appear deeply dissatisfied with the public process that led to the Plan Nord.

With Plan Nord moving forward, the time is now for the U.S. Department of Energy to answer CLF’s call for a regional, comprehensive analysis of the nature and extent of the need for energy imports from Québec.  Québec clearly has a plan for its future, and – laudable environmental “commitments” aside – that plan is all about enriching Québec; New England and the northeastern U.S. need a coherent plan of our own that reflects our energy policies and environmental values.

The Hydro-Quebec building in Montreal. (Photo credit: Wikimedia Creative Commons)

As the U.S. Department of Energy (DOE) moves forward with the environmental review of the Northern Pass electric transmission project, one crucial question still remains–how much does New England need imports of Canadian power?

Today, CLF filed a motion to postpone the environmental review in order to answer that question, calling for a comprehensive public review of the region’s energy needs, the environmental impacts of the Canadian hydropower that would be imported through the project, the best transmission technologies available, and the alternatives to imports, such as renewable energy sources, energy efficiency and energy conservation measures. That analysis could then be used to guide future reviews of individual projects, as opposed to having DOE review each project independently.

“Before DOE can make a reasoned decision on whether the Northern Pass project or any similar proposal is in the ‘public interest,’ it needs to take a step back and consider whether and how new imports from Canada should be a part of our regional energy picture,” says CLF New Hampshire Director Tom Irwin.

> Read the rest of the story
> Visit CLF’s Northern Pass Information Center

CLF intervened today in proceedings regarding the proposed Northern Pass electricity supply and transmission project in New Hampshire. The proposed project, which involves creating 180 miles of new transmission lines in the state and installing new transmission infrastructure in the White Mountain National Forest, is intended to import 1,200 megawatts (MW) of electricity generated in Canada by Hydro-Quebec, the Canadian public utility. If constructed, the project would have significant impacts on New Hampshire communities and the environment.

CONCORD, NH  December 16, 2010 – The Conservation Law Foundation (CLF) intervened today in the Presidential Permit proceeding recently initiated by the U.S. Department of Energy, for the proposed Northern Pass electricity supply and transmission project.  The proposed project – involving 180 miles of new transmission lines in New Hampshire – is intended to import 1,200 MW of electricity generated by Hydro-Quebec, in Canada.

“This project could profoundly affect New Hampshire’s energy future,” said Jonathan Peress, director of CLF’s Clean Energy and Climate Change program.  “It remains to be seen whether it will help or hinder our efforts in New Hampshire and New England to achieve necessary greenhouse gas reductions and develop a clean energy economy.  Unfortunately, the application is more noteworthy for what it omits, rather than the sparse information it provides.”

The proposed project would include the construction of new transmission corridor in northern-most New Hampshire, as well as the installation of new transmission infrastructure through the White Mountain National Forest. Read more>>