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

For the past 25 years, Toxics Action Center has been “awarding” New England’s worst polluters with the dubious Dirty Dozen award. This year’s winners were no surprise: PSNH, New Hampshire’s largest electric utility, was on the list once again.

In this year’s annual spotlight on twelve of New England’s worst polluters, PSNH’s largely coal-firing Merrimack Station and Schiller Station power plants earned the award for the millions of pounds of toxic air pollution and greenhouse gases released by the plants. The Dirty Dozen awards are getting lots of press coverage around New Hampshire, and highlight the massive problems PSNH’s coal plants cause New Hampshire residents.

There is good news. Three of New England’s eight coal plants have closed in the past three years, and the rest (including Merrimack and Schiller) should be well on their way thanks to the massive economic inefficiencies of burning coal in the age of cheap natural gas. While these giant, ancient plants were built to run all day, all year round, the reduced demand for coal energy means that plants like Merrimack and Schiller are being used at historically low rates.

While the current cost of energy production at coal plants is staggering, nothing represents the exorbitant costs of coal better than Merrimack Station’s $422 million scrubber project. PSNH is already recovering the cost of that “investment” from its customers with a temporary rate increase, and has requested an even higher permanent rate increase to recover scrubber costs. Installing massively expensive pollution controls on an obsolete coal-fired power plant was recently shown to be a valueless endeavor when the investment firm UBS valued Dominion Energy’s Brayton Point coal plant (currently for sale) as a worthless asset, due to its poor prospects in the New England wholesale electricity market. Dominion has essentially written off its almost $1 billion pollution control investment at Brayton Point, which has little utility to a plant that does not operate due to its high cost to produce electricity in comparison to cleaner sources.  Merrimack Station’s scrubber investment is faring even worse in the market, because the plant is older and less efficient than Brayton Point.  In this regard, Dominion’s write down at Brayton Point foreshadows the future for Merrimack’s “investment.”

As we documented earlier this month, PSNH’s residential and small business energy service customers are abandoning the utility in favor of its competitors at a breakneck pace, following the lead of its medium and large commercial customers and creating an economic “death spiral” as costs climb and customers disappear. And since PSNH is guaranteed a profit by NH law for maintaining and operating its coal plants, the repercussions of the “death spiral” are felt by residential customers, rather than the company’s shareholders.

The residential customers who have not switched to a different energy service provider are projected to subsidize PSNH’s dirty power plants by an estimated $70 million above market rates in 2013. The above-market residential rate payments are then turned into dividends for the shareholders of Northeast Utilities, PSNH’s Connecticut-based parent company.

Northeast Utilities’ dividends are increasing steadily on the backs of New Hampshire ratepayers, and Merrimack and Schiller continue to produce pollution more efficiently than they generate electricity. How long will PSNH be allowed to fleece New Hampshire’s citizens?

Co-written with N. Jonathan Peress

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.

(photo credit: flickr/timtom.ch)

The new revelations of unfairness and bias in the federal environmental review of Northern Pass have struck a chord, garnering front-page coverage in the Union Leader and a story on New Hampshire Public Radio. You can join our fight for a fair review of Northern Pass. We have made it easy for you to take action and tell the United States Department of Energy (DOE) that New Hampshire deserves an unbiased process that follows the law – it will only take a couple of seconds. You can submit your comment to DOE here.

To understand what’s at stake in the wake of these developments, it’s important to take a look back at the history of where we’ve been and what we’ve been fighting for.

This week marks the second anniversary of the formal announcement of the Northern Pass project and Northern Pass Transmission LLC’s (NPT) application to DOE for a Presidential Permit. Shortly after the announcement, it became clear that DOE’s review of the project was off to a terrible start. DOE had selected a “third-party” contractor to prepare an environmental impact statement or “EIS” for the project – a crucial, comprehensive, and impartial study of the project’s environmental and socioeconomic impacts and its reasonable alternatives. But that contractor, Normandeau Associates, was the same firm that was on NPT’s payroll to advocate for the project’s approval during the state siting process, which will follow the federal process. This was a clear conflict of interest in violation of the regulations that govern federal environmental reviews.

After CLF and others objected to DOE’s hiring of Normandeau on the ground that the contractor had, NPT initially defended Normandeau’s dual role. Then, in an about-face, NPT terminated the arrangement, saying that:

[T]he strong expressions of concern by certain members of the public about the arrangement lead us to believe that continuing with this arrangement may cause the public to lack confidence in the objectivity and rigor of the ultimate environmental analysis of the project. That outcome obviously does not serve the interests of the project, any of the permitting agencies or the public.

It turns out, however, that our fight for fairness and integrity in the Northern Pass permitting process was only beginning. Over the last two years, CLF has advocated for a truly rigorous analysis of alternative technologies and strategies, a comprehensive review of the region’s energy needs, and a much more honest accounting of the current proposal’s impacts – on electric bills, the climate, our domestic renewable power industry, and natural resources in Canada – than the threadbare and misleading information NPT has provided to DOE and to the public. Along the way, CLF has encouraged members of the public to make themselves heard in the permitting process and sought improvements in that process.

After DOE announced it had selected a new, supposedly independent contractor team to prepare the EIS, CLF identified the potential for unfairness in DOE’s agreement with the contractor and encouraged DOE to fix the problems. We’ve been joined in this important fight by many, many other advocates, from the record crowds at DOE’s public meetings in March 2011, to passionate Granite-Staters on and off the project’s path, to our allies at other environmental organizations.

What we’ve now learned – that DOE has repeatedly abdicated its responsibility to control the process and that NPT has had improper influence over major decisions about the review – has deeply shaken our confidence in the process we’ve been fighting so hard to protect and improve. With NPT expected to announce a new northernmost route soon (now the end of 2012) and restart DOE’s review once again, we are at a new crossroads, just as we were at the process’s outset. Will the federal review of Northern Pass be the fair, objective, and open process that New Hampshire deserves? Or is the game rigged in the developer’s favor yet again?

Again, please join our fight. Take action now.

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.

DOE Headquarters, Washington, DC (Energy Department photo, credit Quentin Kruger)

A year ago, CLF asked the Department of Energy (DOE) for documents regarding its environmental review of Northern Pass – the major power-line project proposed by Northern Pass Transmission LLC, or “NPT.” We fought for an open, rigorous, and impartial permitting process that would independently scrutinize all elements of the Northern Pass proposal. We wanted to be sure that’s what New Hampshire and the region would be getting from DOE and its new contractor team, which is charged with preparing the ever-crucial environmental impact statement or “EIS” – the document that analyzes the proposed project, all reasonable alternatives, and all related environmental and socio-economic impacts.

On the surface, we saw some blemishes, but it appeared that, despite the potential problems (which we noted in a submission to DOE last October), DOE’s new contractor team would be substantially more objective than the original contractor, which had an obvious conflict of interest due to its dual role (incredibly) working for both DOE to prepare the EIS and for NPT in seeking to obtain state-level approval for the project.

It took nearly a year, but DOE finally sent us a large set of documents – emails, letters, and document drafts. The documents provide the first real window we’ve had into DOE’s handling of the process so far.

What they show is profoundly troubling: abdication by DOE of important non-delegable responsibilities to the permit applicant, NPT; and significant and improper influence over the permitting process by the permit applicant, NPT:

• NPT’s counsel – who was once DOE’s top lawyer and still appears to have extraordinary access and influence at DOE – handpicked the new EIS contractor team, with what appears to be minimal DOE involvement. Counsel for NPT acted as the new contractor team’s agent, recruiting the team, pulling together its submission of qualifications and a work plan proposal to DOE, and organizing a face-to-face meeting between DOE, NPT, and the team. It appears DOE conducted no real search of its own, in violation of governing regulations requiring that EIS contractors be chosen “solely” by DOE.
• A senior member of the new contractor team has already demonstrated that she is biased in favor of a narrow, NPT-preferred alternatives analysis. In an email included in the documents obtained by CLF, one of the new contractors opined that the underground Champlain Hudson Power Express project connecting Canada and New York City will not be considered an alternative to Northern Pass in the EIS. This is precisely the position expressed just one month earlier by NPT in its objection to CLF’s and others’ request for a regional energy study, which was based in part on DOE’s need to evaluate Northern Pass and Champlain Hudson together. The email was, ironically, intended to show that email’s author lacks a conflict of interest in working as an EIS consultant on the Northern Pass project and as a DOE consultant on the Champlain Hudson project.
• DOE allowed NPT to design the arrangement among DOE, NPT, and the contractor team, which was memorialized in a Memorandum of Understanding that, we’ve learned, DOE asked NPT to draft. It appears that DOE doesn’t even have a copy of the key agreement between NPT and the contractor team establishing the budget and schedule for the EIS.

Unfortunately, this pattern of NPT’s influence over the process is not unique to selecting and managing the project’s EIS contractors:

• DOE apparently reviewed and okayed NPT’s deeply incomplete permit application before it was even filed.
• DOE asked NPT’s counsel to write up the “purpose and need for agency action,” a crucial DOE determination that will help shape the scope of the EIS, including what alternatives to the current Northern Pass proposal should be studied. NPT’s draft was virtually identical to the version that then appeared in last year’s Federal Register notice announcing that DOE would prepare an EIS and kicking off the scoping process. In our scoping comments, CLF identified DOE’s “purpose and need” statement as illegally narrow.
• NPT and DOE have had private discussions, outside the public eye, about pending requests by stakeholders to improve DOE’s process. In the case of CLF’s and others’ request for a regional study of our energy needs, a request that became all the more important in the aftermath of the announcement of the Northeast Energy Link project last July, NPT’s counsel went so far as to give DOE talking points and supporting legal citations explaining why granting the request was “not warranted.” DOE’s decision on the request? As NPT would prefer, DOE hasn’t commissioned any regional study or EIS.

What should happen next? Yesterday, CLF filed extensive comments with DOE (1 mb PDF linked here, 10 MB .zip archive of exhibits here), laying out the evidence and requesting major changes in DOE’s environmental review of Northern Pass:

• First, DOE’s new contractor team has a clear conflict of interest, in violation of governing regulations that prohibit the use of contractors with “any conflict of interest.” The team apparently owes its new contractor job – and potentially hundreds of thousands of dollars in consultant fees – to NPT. To ensure the objectivity and integrity of the permitting process, the new contractor team needs to be replaced by a new contractor or qualified DOE team with no conflicts of interest, and without NPT’s involvement.
• Second, and more fundamentally, DOE needs to change course – now. New Hampshire deserves a fair, impartial, and rigorous review of Northern Pass. NPT, as the permit applicant, predictably would prefer an easy path to approval. It’s DOE’s legal obligation to control the process, promote meaningful public involvement, and safeguard its decision-making from bias and undue influence. In light of NPT’s failure to piece together a northernmost route, DOE has ample time to start again, with a more open and objective approach that would help to rebuild the public’s confidence in this important permitting process.

UPDATE: Help us tell DOE to fix the process by replacing the contractor team and instituting the fair, legally sound process that New Hampshire deserves. It only takes a few clicks. Take action now 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.

Hands Across New Hampshire protest, Deerfield, NH, September 1, 2012 (photo credit, Wes Golomb, Bear Brook Photography)

After a summer when many in New Hampshire expected to hear about a revised route and a renewed public relations campaign for the Northern Pass transmission project, the current proposal, which surfaced almost two years ago, is facing new obstacles:

• On the heels of its successful campaign to protect the Balsams, the Society for the Protection of New Hampshire Forests has announced a new $2.5 million land conservation plan that seeks to stymie the new North Country route Northern Pass has been trying to assemble for more than a year. The fund-raising campaign to support the Forest Society’s plan appears to be off to a good start.
• Last Saturday, in a peaceful statewide event called Hands Across New Hampshire, hundreds of concerned citizens across New Hampshire – from Manchester to Colebrook – joined about a dozen spirited protests against the project. The picture above shows the protest along PSNH’s existing transmission corridor in Deerfield, the proposed southern terminus of the line. The protests showed that grassroots opposition is strong in the North Country but also in the central and southern parts of the state.
• Every gubernatorial candidate on the ballot is on the record calling for careful consideration of alternatives to the current proposed overhead lines, and many are agreeing with CLF that the current proposal does not provide any real benefits for New Hampshire residents and ratepayers.
• A legislative commission is evaluating the feasibility of using state-owned transportation corridors, including rail beds and highways, for high voltage transmission projects like Northern Pass, an approach that Maine and other states are pursuing. The commission already has heard from state agencies and the makers of high-tech underground transmission technology, and it is now evident that burying transmission lines in available state highways and rail corridors is potentially practical and viable. The commission’s work will culminate in a report to the Legislature later this year.
• In yesterday’s provincial election, Québec’s Liberal government – the sponsors of Québec’s energy strategy and Hydro-Québec’s plans to export more hydropower to New England through Northern Pass – was ousted from power. Although the sovereigntist Parti Québecois, which will lead a new coalition government, has committed to continue the Liberal government’s Plan Nord (with its substantial hydropower component), it is unclear how these political changes will affect Québec’s and Hydro-Québec’s relationships with Northern Pass, especially in light of the declining economic value of the project for Québec.

It is long past time for Northern Pass to acknowledge (contrary to Northeast Utilities’ recent sunny pronouncements to investors) that the current proposal – new route north of Groveton or not – is a non-starter in New Hampshire. Instead, we should be shelving this fatally flawed proposal, critically exploring whether and to what extent hydropower imports are needed, evaluating all the alternatives in an open and well-informed planning process, and continuing to pursue greater regional consensus and coordination to build a real clean energy economy with broadly shared benefits, on both sides of the border.

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.