photo credit: flickr/OpenThreads

The Northern Pass transmission project is being pitched by its developers as a clean energy proposal for New Hampshire. As I’ve pointed out before, Northern Pass is a regional proposal with dubious benefits in the Granite State. Unfortunately, the developers’ hollow promises have found an audience further south, in Massachusetts.

From the public discussion as well as the developers’ PR blitz, you might think that the Northern Pass – a high voltage transmission line that would extend 180 miles from the New Hampshire-Canada border, through the White Mountains, to Deerfield, New Hampshire – is just a New Hampshire issue. It’s not: the ramifications of this project extend well beyond New Hampshire.  The implications are both regional and enduring, as they will shape the energy future of New England for decades to come.

Given this context, the U.S. Department of Energy (DOE) should be leading a pro-active, regional assessment of the options for additional imports of hydroelectric power from Canada. So far, DOE has squandered its opportunity to lead such an assessment while the Northern Pass permitting process remains on indefinite hold. Since April of this year, CLF has been urging the DOE to use this delay to deliver a fair, big picture review of the Northern Pass. It’s what New England deserves, and what DOE owes the public.

Although you wouldn’t know it from the media or the developers’ “MyNewHampshire” advertising campaign, Northern Pass also is a Massachusetts issue. Why? As if hidden in plain view, it’s at the center of Massachusetts’s plan to combat climate change. You might say it’s the elephant in the room.

Massachusetts’s 2010 “Clean Energy and Climate Plan for 2020” (the Plan) seeks to reduce Massachusetts’s greenhouse gas emissions (GHG) 25% below 1990 levels by 2020. CLF has applauded the Plan as an aggressive, nation-leading effort. However, we long have been dubious of the Plan’s reliance on potential imports of Canadian hydropower.

Regrettably, the final Plan (at pp. 45-46) uncritically bought the Northern Pass developers’ line that Northern Pass will reduce greenhouse gas emissions by 5.1 million metric tons annually by 2020. Where does the Plan get that figure? The figure was never publicly vetted or discussed during the public planning process in which CLF was an active participant. The only citations are to the developers’ website and to a 2010 report by an energy consulting firm hired by the developers. That’s it. Massachusetts is taking the developers’ sales pitch at face value.

The Plan goes on to claim that Massachusetts can take credit for the entire reduction, even though the current Northern Pass proposal, by design, does not guarantee that Massachusetts customers will purchase any hydropower from Hydro-Québec through Northern Pass or otherwise. So, just how much of Massachusetts’s ambitious GHG reduction goal does Northern Pass’s supposed 5 million tons represent? More than 70% of the Plan’s reduction goal for the electric sector and more than 20% of the Plan’s goal overall. Of the Plan’s “portfolio” of initiatives, the Plan credits Northern Pass with achieving the single highest amount of emissions reductions.

Northern Pass is a highly questionable element of the Plan for a number of reasons. First, it’s not clear how much power Massachusetts will actually get from Northern Pass. Second, the project faces myriad permitting hurdles and isn’t anywhere close to a done deal. Third, Massachusetts has no direct role in the project’s development.

But it’s worse than that. The report by the developers’ consultant – and its 5.1 million ton estimate of Northern Pass’s reductions of GHG emissions – is simply wrong. The report’s error is a contagion that directly undermines the Plan’s ambitious GHG reduction goal.

To make a long story short, the report assumes that Canadian hydropower results in no GHG emissions. That assumption is contradicted by Hydro-Québec’s own field research on the GHG emissions from the recently constructed Eastmain reservoir – the very reservoir where, according to testimony by a developer executive, Northern Pass’s power will be generated.  Together with other scientific literature, the research demonstrates that reservoirs have long-term, non-zero net GHG emissions (in part because they permanently eliminate important carbon “sinks” that absorb carbon dioxide from the atmosphere, such as boreal forests). That makes the  5 million tons, at a minimum, blatantly inflated.

But even more importantly for Northern Pass and Massachusetts’s GHG reduction goal, the same research suggests that Northern Pass may not reduce GHG emissions at all before 2020, if ever. According to Hydro-Québec, a newly inundated reservoir has GHG emissions comparable to a modern natural gas power plant in the decade following flooding.  This chart from a Hydro-Québec paper, which itself likely underestimates reservoir emissions over time, tells the tale:

Natural gas plant and reservoir (Eastmain 1) emissions are similar in first decade of reservoir operation

And according to the developers’ projections, Northern Pass would overwhelmingly displace natural gas-fired generation (itself a missed opportunity to displace the output of coal-fired power plants).  If Northern Pass relies on new hydroelectric facilities in Canada for its power (as the developers and their consultant are assuming), Northern Pass as proposed will have no net effect on emissions in its early years and may never result in meaningful reductions, let alone 5 million tons per year.

Without the claimed reductions from Northern Pass, the Plan cannot come close to achieving the bold 25% reduction in GHG emissions that made headlines, even if every element of the Plan is implemented. In other words, there is a 5 million ton hole in the Plan that Massachusetts needs to fill with real and verifiable reductions.

CLF has been making this case during Massachusetts regulators’ review of the proposed merger of Northeast Utilities and NSTAR – the same companies behind Northern Pass – that week approval to form the largest electric utility in New England. Piggybacking on the Plan, Northern Pass’s developers are citing the emissions reductions from the project as the premier “climate” benefit that Massachusetts will supposedly get from the merger. That benefit appears right now to be a zero; particularly in light of the merger’s negative impacts, Massachusetts deserves a lot more to satisfy the “net benefit” standard that the merger must achieve to gain approval.

In the months ahead, we also will be pushing back against Hydro-Québec and its corporate allies in Massachusetts, who are now urging radical changes to Massachusetts’s clean energy laws that would subsidize large-scale hydropower imports, at the expense of local renewable energy projects that provide jobs and economic benefits in Massachusetts and throughout New England. The Plan itself explains the reason this is a bad idea – large hydro is a mature technology that is economic and cost-competitive without any additional public support; large hydro also has caused dramatic environmental damage and major disruptions to native communities in Canada. If imports secure little or no reduction in GHG emissions, the case for new subsidies disappears altogether.

Some may be hoping that no one is looking seriously at what Northern Pass would mean for the climate and that the Northern Pass debate will remain within New Hampshire’s borders. CLF, however, is committed to securing real scrutiny of Northern Pass’s misleading claims, ridding Massachusetts’s climate plan of its faulty reliance on Northern Pass, and advancing clean energy solutions that will, in fact, meaningfully reduce our region’s carbon footprint while enabling Massachusetts to achieve its full 25% reduction in GHG emissions by 2020.

Are you concerned about the Northern Pass transmission project? Do you want to learn more about what it could mean for New Hampshire and New England’s energy future, for our climate, for energy rates, and for the communities and natural environment of New England and Québec? Do you want to keep up with the latest developments as the project progresses through the permitting process?

If you answered yes to any of these questions, you’ll want to sign up for CLF’s new email newsletter – Northern Pass Wire.  In a concise format, Northern Pass Wire will provide the latest news and analysis regarding the Northern Pass project direct from CLF advocates, with links to additional resources from CLF’s Northern Pass Information Center, our latest Northern Pass posts here on CLF Scoop, and CLF’s recent legal filings. Northern Pass Wire will also keep you informed about ways you can get involved and make your voice heard as the permitting process for the Northern Pass project continues. We expect to publish Northern Pass Wire about once a month, and perhaps more frequently when events warrant. The first edition can be previewed here, and you can sign up to get Northern Pass Wire here.

Please sign up and encourage your family, friends, and colleagues to do the same!

Click on the image to preview the first edition of CLF's Northern Pass Wire

photo credit: Hope Abrams/flickr

Here in New Hampshire, the leaves have turned.  What hasn’t changed is that the environmental review of the Northern Pass proposal remains stalled while the project developers – Northeast Utilities (and its subsidiary Public Service Company of New Hampshire) and NSTAR – seek a new route for the northernmost 40 miles of the project.  It’s a disgrace that the U.S. Department of Energy (DOE) has so far refused to use the developers’ significant delay to assess the nature and extent of New England’s need for Canadian hydropower and to develop an appropriate plan to bring that power into the region, as CLF and others have been requesting since April.

While DOE is in a holding pattern, CLF is continuing to fight for a fair and comprehensive environmental review of the Northern Pass project.  Earlier this month, CLF filed new comments with DOE, supplementing the detailed comments we filed in April.  Our new comments address:

• Why CLF has renewed concerns about DOE’s control over its new environmental review contractors.  Based on our review of the Memorandum of Understanding between Northern Pass, DOE, and its new contractors, posted here (PDF), we explain that Northern Pass could still have an unfair and inappropriate influence on the content of the environmental impact statement and the schedule for completing it.
• What the Northeast Energy Link proposal means for the Northern Pass environmental review.  The recently announced Northeast Energy Link proposal, along with the Champlain Hudson Power Express project, makes it clearer than ever that we need a regional assessment of our energy needs.  These other two transmission projects also show that burying transmission lines in transportation rights-of-way is an abundantly reasonable alternative to overhead lines.
• How Northern Pass hasn’t clearly disclosed the source of power for the project.  We bring to DOE’s attention important information, obtained by CLF through its cross-examination of an executive of Northeast Utilities before Massachusetts regulators, that the source of Northern Pass’s power is likely to be new hydroelectric projects that Hydro-Québec is now in the process of designing and building.  CLF is especially troubled by the new information because the impacts of the project are much more significant if it causes the construction of new dams and the associated negative environmental impacts, including well-documented spikes in early greenhouse gas emissions from flooded land.  Northern Pass and its parent companies have consistently failed to acknowledge that these emissions undermine their claims about the reductions in emissions the project will supposedly provide.

A copy of our new comments is available here.  We also filed a Freedom of Information Act request with DOE, seeking to obtain a copy of the “Consulting Services Agreement” between Northern Pass and the environmental review contractor team.  The Memorandum of Understanding suggests that this separate contract includes important information on the budget and schedule for the environmental review, and the public deserves to know these details.

With the permitting process due to continue when Northern Pass announces a new northernmost route, CLF will be launching new ways to keep you informed about the latest Northern Pass news and the best ways for you to get involved and make your voice heard. Please stay tuned!

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: l . e . o/flickr

With each passing day, the dire reality of PSNH’s coal-fired business model is becoming clearer in New Hampshire.  The cost of operating PSNH’s obsolete power plants continues to grow, accelerating the Company’s death spiral where fewer captive ratepayers are saddled with unsustainable above-market rates as more PSNH customers choose to buy power from better managed competitive suppliers.  We are also learning that Northern Pass will make the situation worse for ratepayers, not better, and that PSNH and its Northern Pass partners are poised to pull in huge profits.  In just the last few days:

• PSNH revealed that, as it has begun bringing online its $450 million scrubber project at PSNH’s 50 year old coal-fired Merrimack Station, the bill is now coming due. If state regulators at the New Hampshire Public Utilities Commission (PUC) approve passing the cost on to ratepayers, the energy rates for PSNH customers – already the highest in New Hampshire by a wide margin – will go up by at least 1.2 cents per kilowatt hour, or almost 15%.  CLF is seeking to intervene in the PUC proceeding on the rate increase.  PSNH, unsurprisingly, wants to keep CLF out, in addition to any other party seeking to intervene on behalf of ratepayers.  There is no better illustration of the folly – for ratepayers and the environment alike – of major new investments in coal-fired power plants than PSNH’s flawed effort to extend the life of Merrimack Station.  These investments are a disaster for ratepayers, and don’t even ensure compliance with the plant’s environmental requirements – a case CLF is making right now in federal court with regard to other modifications to Merrimack Station.
• Large commercial and industrial customers with the buying power to avoid the high rates for PSNH’s fossil power continue to do so in dramatic numbers.  PSNH announced that, in September, about 82% of these customers were buying power elsewhere in the market (accounting for 93% of the power delivered to these customers) – a phemonenon known as “migration.”  Meanwhile, more than 99% of New Hampshire residents in PSNH territory were left behind to pay PSNH’s already exorbitant rates.  The scrubber rate increase is going to make this situation even worse for residents – additional businesses will find other suppliers and PSNH will need to jack up its rates even more.  More cost-effective competitive suppliers are cleaning PSNH’s clock among large customers.  Given the company’s excessive and increasing rates, residential ratepayers are starting to vote with their pocketbooks for more sustainable energy supplies.
• It is becoming increasingly clear that the current Northern Pass proposal is designed around PSNH’s bottom line, not the interests of New Hampshire ratepayers.  As we’ve mentioned before, the large customer “migration” problem and its upward pressure on homeowners’ electric bills are likely to get worse with Northern Pass, which would further depress regional wholesale electric rates and encourage more customers to leave PSNH.   Adding in the cost of the scrubber will only widen the divide between the businesses that can choose other suppliers and potentially benefit from Northern Pass, and the residential customers who are currently  stuck with PSNH. A new wrinkle emerged last week – testimony from PUC staff showing that PSNH’s consultants estimated a year ago that Northern Pass will cannibalize PSNH’s already meager revenues from Newington Station, PSNH’s little-used power plant in Newington, New Hampshire, that can operate with either oil or natural gas.  Northern Pass would mean it would almost never run and that the investments ratepayers have made over the years to keep Newington Station operating will essentially be lost.  This same dynamic will apply to the rest of PSNH’s power plants:  Northern Pass will diminish their market value further exposing New Hampshire businesses and residents to the risk of excessive costs.  Once again, a series of poor decisions and self-interested advocacy by PSNH (at the expense of ratepayers) is forcing the legislature to intervene.

The costs of PSNH’s coal-fired power plants are becoming untenable, and a radically redesigned Northern Pass proposal and other alternatives could help PSNH meet its customers’ power needs more cheaply and with less damage to public health and the environment.  Instead of planning for a cleaner energy future, PSNH is working only to preserve its regulator-approved profits.  CLF will be using every tool at our disposal to force a rethinking of PSNH’s approach.

The Eastmain Powerhouses from space (photo credit: NASA)

Beyond the discredited sales pitch that Northern Pass will lower electric rates in New Hampshire, the developers have repeatedly claimed that the power to be imported through the Northern Pass project will be “low-carbon,” “clean,” and “green,” with “no greenhouse gases,” and “no global warming.” The power will also, we’re told, “improve the quality of the air we breathe.” The developers have said, over and over, that the project “is expected to reduce regional carbon dioxide emissions by up to 5 million tons per year, the equivalent of removing from the road one million cars annually.” In fact, the study on which this claim is based – a report (PDF) commissioned by Northern Pass and authored by Boston-based energy consultant Charles River Associates – began with the assumption that hydro power is “zero-carbon.” Let me repeat that: the developers’ claim that the project will reduce carbon dioxide emissions by a net 5 million tons is based on their unexamined presupposition that the power to be delivered by the project has no carbon dioxide emissions at all.

There’s no other way to say it: this assumption is false.

You don’t have to take my word for it; read Hydro-Québec’s own research report (4.4 MB PDF) on the net greenhouse gas emissions of the Eastmain 1 Reservoir, flooded in 2005 (aerial shots here). In an Orwellian twist, the developers of Northern Pass have repeatedly cited this very same research.

The Hydro-Québec report found that net carbon emissions from Eastmain-1 were 500,000 tons in 2006 and 165,000 tons in 2009, and are projected to average approximately 158,000 tons per year on a long-term basis.  While certainly less than coal-fired power plants – PSNH’s Merrimack Station emitted more than 2.8 million tons of carbon dioxide in 2010 – 158,000 tons of net carbon emissions per year is far from ”zero-carbon” or even “low-carbon” power.  Based on our own survey of reservoir greenhouse gas research, we have some serious questions about the report, and there is reason to believe that it understates emissions over time and per unit of energy generated. But the report does confirm that Hydro-Québec’s reservoirs will continue to emit more greenhouse gases per year than the natural environment they flooded. These emissions are locked in for decades if not centuries – unlike a power plant that burns fuel, you cannot turn off a reservoir.

When compared with the power plants that Northern Pass’s power could displace, new hydroelectric projects in their early years of operation are no cleaner in terms of carbon emissions.  According to the report, ”it takes about five years for the accumulated CO2 eq. emissions to fall below the [natural gas combined cycle] value” (p.15). So, on a net and cumulative basis since its flooding in 2005, the Eastmain 1 Reservoir has had the same carbon dioxide-equivalent emissions as a modern natural gas power plant that has the same power output and began operating in 2005. 

The report also highlights what appears to be a clear difference between the net emissions of a newly impounded reservoir and the emissions of a reservoir that was impounded decades ago: a new reservoir emits more greenhouse gases, as the vegetation and organic material in the newly inundated area decompose.

This distinction is especially important when considering the contradictory stories we have heard about where Northern Pass will get its power. On the one hand, Northern Pass’s website claims (click on “Hydro-Québec” on this page) that “Hydro-Québec does not need to build any new generation to support this project.” On the other hand, it is clear that Québec is developing and planning vast new hydroelectric projects, many of which will require new inundation and reservoirs, as part of a concerted strategy to maintain and increase exports to New England and the northeast United States. See Erin’s blog post from yesterday for more on Vermont’s new long-term contract with Hydro-Québec. 

In fact, Charles River Associates’ fundamentally flawed estimate of carbon emissions reductions depends on the development of new hydro projects in Canada. And just ten days ago, in testimony to Massachusetts regulators, Northeast Utilities’ CFO David McHale stated under oath: “We already know for a fact that the utility Hydro-Quebec has initiated the construction of dams, and we’ve already entered into the record a discussion about the Eastmain Water Reservoir that will provide the water source. So this is not speculative. They’re building the dams and they will go into service; and that will be the primary source, if not the exclusive source, of energy that will flow over [the Northern Pass] line. . . . [T]hat is the full expectation.” What McHale was referring to is Hydro-Québec’s major new project in the vicinity of Eastmain-1 – the Rupert River project (project website here and explanatory animation here). Since 2009, this 918-MW project – now in the final stages of development – has newly flooded 346 square kilometers  - an area about the size of two Lake Winnipesaukees. That Northern Pass power will be coming from new projects means that Northern Pass will enable and contribute to the substantial carbon emissions associated with new reservoirs.  There has been no accounting of the potential emissions from the Rupert project and other future projects that Northern Pass may make possible, and how they would cut into the potential emissions reductions Northern Pass and Charles River Associates have claimed.

These inaccuracies and contradictions are being disseminated with hundreds of thousands of dollars in media buys, money which could have been invested in engaging in a collaborative process to rework the current proposal.  This situation makes CLF’s fight for a world-class, independent, and comprehensive permitting process all the more important.

CLF has been adamant that the Department of Energy must consider the environmental impacts – including greenhouse gas emissions – of the hydropower generation projects and any other power plants in Canada that will supply the Northern Pass project.  Given the developers’ recent announcement of new delays in their schedule, there’s still time for the Department of Energy to change course and answer our call for a regional, holistic analysis of the right approach to importing power from Canada, taking into account the truth about that power’s greenhouse gas emissions.

The Vermont Public Service Board recently approved a contract for Vermont utilities to buy power from Hydro-Québec for 20 years.  The new contract will supply about 20% of Vermont’s power needs, bringing 225 MW of power into Vermont to replace an expiring contract for 310 MW.  The starting price for the power is about $58.07 per MWh and will be adjusted annually based on regional electricity prices.  Vermont regulators found the agreement provides Vermont financial benefits by locking in a stable price that is lower than many other sources of electricity.  Contracts such as this represent only the tip of the iceberg for power imports from Québec, as Hydro-Québec partners to build transmission lines through New York and New Hampshire.

Hydro-Québec is a government-owned utility with some nuclear and fossil fuel plants, 60 hydroelectric generating stations, including seven new dams built since 2000, and significant new expansions on the horizon, including 3,000 MW of new hydropower projects in Québec’s far north as part of the province’s $80 billion “Plan Nord.”  Because Hydro-Québec supplies more than enough power for its own region, the expansion represents Hydro-Québec’s commitment to selling more power to other areas, including New England.

Regulators quickly approved the contract, citing its purported value as a relatively low-carbon and low-cost power source.   However, importing vast amounts of power from Québec is no “green” silver bullet.  Last October, CLF highlighted troubling aspects of the power deal between Hydro-Québec and Vermont utilities. CLF showed that the power deal falls short by failing to honestly represent its environmental impacts.  A few of the problems with the deal:

• Without adequate verification, the environmental claims aren’t necessarily accurate.  A portion of the claimed “clean power” could really be coming from coal or other fossil fuels.  Under the contract, the energy sold must be 90% hydropower, but without any independent verification, it is impossible to ensure that Vermont gets what it bargained for.
• The contract fails to address impacts of new dams that would flood vast areas of northern Québec. Nothing in the contract limits Hydro-Québec’s ability to build new dams as demand for energy grows; this means the contract with Vermont tacitly supports new dams and the resulting damage.
• The contract allows Vermont utilities to sell the renewable claims elsewhere when Vermont itself has no firm obligation to keep its energy supply low-carbon.  Unlike other New England states, Vermont has no requirement now to purchase renewable power. This means that Vermont utilities benefit financially from a system it is not truly a part of, and would allow other states to continue to rely on dirty power sources such as coal.

As a region, we must ensure any new commitments to import power from Canada clearly advance our clean power goals.  Any new imports of hydropower should replace the power we are currently getting from coal and other dirty, inefficient power plants.  Only then can we actually lower our carbon emissions from electricity.   The challenge for New England is to make sure any level of imports meets our needs, reduces greenhouse gas emissions, and avoids exporting environmental problems to the north.  Indeed, that challenge is why CLF is calling for a comprehensive, regional analysis of imports from Canada within the Northern Pass permitting process.  CLF continues to push for greater reliance on cleaner energy resources and to demand honest evaluations and representations of environmental benefits and impacts.

PSNH: In a death spiral? (photo credit: CC/Nick Seibert)

In every possible way – on television, in mailings, and on the web – New Hampshire has heard again and again that the proposed Northern Pass transmission project will reduce electric rates for New Hampshire customers. The claim is at the core of PSNH’s case that the project is a good deal for New Hampshire. If only it were true…

As I mentioned in a post last month, the very design of the project as it stands is for reduced electric rates to benefit only those ratepayers that get their power from the regional electric markets. In New Hampshire, homes and small businesses in PSNH territory would see very little benefit because their energy rates are overwhelmingly tied to propping up PSNH’s old, inefficient fleet of coal-fired and oil-fired power plants.  These plants would not be able to compete with other cleaner power sources if forced to compete in the marketplace, something New Hampshire law does not currently allow and PSNH has fought to avoid. (Supposedly, an agreement between PSNH and Hydro-Québec for some power for PSNH customers is in the works, but, if it ever materializes, Northern Pass has said it would only be for a small amount of power, which would not do much to change PSNH’s overall portfolio. Northeast Utilities admitted as much in testimony before the Massachusetts DPU this week and also noted that there is “really little activity” around securing any such agreement.)

As explained in a piece on NHPR featuring our own Jonathan Peress, the above-market costs of PSNH’s aging fleet are causing large customers to buy power from (or “migrate” to) cheaper suppliers. Regulators this week turned back PSNH’s attempt to saddle those customers with its fleet’s escalating costs. But this situation is creating a so-called “death spiral,” because PSNH is forced to raise its rates again and again on a shrinking group of customers – homeowners and small businesses who do not have the purchasing power to contract with another supplier.

What does this all have to do with Northern Pass? The truth is that Northern Pass will – indeed, is intended to – make the “death spiral” worse.  If Northern Pass lowers the regional price of power as all those ads proclaim, it will make PSNH power even less competitive, causing even more customers with choices to leave PSNH behind.  PSNH spokesman Martin Murray so much as promises that result when he says in the NHPR piece that Northern Pass power will not displace PSNH generation. As Jonathan explained on NHPR, that means that the same homeowners and small businesses that will have to deal with 180 miles of new transmission lines will have higher, not lower, electric rates. This is not the Northern Pass story PSNH has been telling.

None of this makes sense. PSNH’s coal- and oil-fired power plants are bad for ratepayers and disasters for public health and the environment. As our lawsuit filed last week makes clear, PSNH’s efforts to prop up its largest plant failed to comply with even basic emissions permitting requirements and have increased that plant’s emissions. Any plan to import Canadian power with PSNH’s name on it should provide real benefits to its own customers and focus on responsibly freeing New Hampshire (and the lungs of millions of New Englanders) from PSNH’s dirty, uncompetitive dinosaurs.

ADDED: I should also point out, in the same Massachusetts DPU proceeding mentioned above, that counsel for NSTAR (the junior partner in Northern Pass) asserted that “[i]t’s entirely speculative as to what the impact of Northern Pass will be on rates in New Hampshire, and then [migration].”  Quite a statement given Northern Pass’s public relations campaign asserting that rates will go down. And we disagree with NSTAR’s counsel wholeheartedly. It is reasonable – not speculative – to expect the current proposal will lead to higher rates for PSNH ratepayers.

Map of Northeast Energy Link (potential route in yellow)

Earlier this week, National Grid, Emera, and First Wind announced preliminary plans for a major new transmission project between northeastern Maine and Massachusetts – the Northeast Energy Link (NEL).  The financing structure for the project, known as “participant funding,” is similar to the structure that federal regulators approved for the Northern Pass project in 2009.  NEL would consist of 220 miles of underground, high voltage direct current (HVDC) transmission lines, apparently to be sited in existing rights of way and transportation corridors, that would deliver 1,100 megawatts of power from future wind projects in northern Maine, as well as additional imports from Canada, to southern New England. National Grid and its partners have apparently found a way to make the economics of burying lines in already disturbed corridors work.  This development deeply undermines the continued refusal of the proponents of the Northern Pass project, despite CLF’s and others’ repeated requests, to consider the same approach.

NEL is an intriguing proposal, particularly because it emphasizes New England-based wind resources. As with Northern Pass, the proposal warrants thorough review through robust, comprehensive permitting processes.

More immediately, the proposal underscores the urgent need for the regional energy study CLF and others are requesting within the Northern Pass permitting process.  There simply is no comprehensive plan in place addressing the best approaches for facilitating imports of Canadian power, if needed, and for adequately connecting homegrown renewable resources in remote areas to customers in southern New England.  With no plan, all we can do is react, piecemeal, to each private proposal that comes along.  Our energy and environmental agencies should be assessing the need for new transmission projects and then should consider only the best approaches that prioritize energy efficiency, minimize environmental impacts, reduce our reliance on the dirtiest power plants, and provide real public benefits. 

The recent delays in the Northern Pass review mean that the U.S. Department of Energy has a golden opportunity to help develop a regional plan, along with other stakeholders in the New England states and elsewhere in the Northeast.  CLF-NH Director Tom Irwin and a number of the other organizations that joined our motion to DOE seeking such a study make the case on the op-ed page of today’s Concord Monitor.  You can access the op-ed here.

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.