Northeast Utilities (NU) tells investors and the public that it is will announce a new northernmost route for its Northern Pass transmission project by a certain date. The date arrives. A “project update” appears on the website of NU subsidiary and project developer Northern Pass Transmission LLC, saying that it isn’t ready to announce the new route just yet.

What’s behind the curtain, Northern Pass? (photo credit: flickr/Nick Sherman)

Sound familiar? It happened at the end of 2012. As reported in the Caledonian Record, it happened again last week, a mere month after NU said – in writing to investors and the Securities and Exchange Commission – that it would announce a new route by the end of March. This is the fourth self-imposed deadline that Northern Pass’s developer has failed to meet since last summer. You’d be forgiven if you started asking yourself whether Northern Pass’s route is the transmission equivalent of vaporware.

For whatever reason, NU has repeatedly misled the public and its investors about the Northern Pass project, and not just the project’s schedule.

• Its claims regarding the climate benefits of the project are based on the demonstrably false assertion that large-scale hydropower has no greenhouse gas emissions. The other New Hampshire benefits that NU ascribes to the project are little more than overblown talking points that do not withstand scrutiny.  
• Last November, NU’s CEO misled investors by falsely claiming broad support for Northern Pass among environmental groups, New Hampshire’s governor, and the regional operator of the electric grid; a corporate spokesperson then misrepresented what he said in an attempt to cover up the misstatements. 
• While it continues to insist Northern Pass-transmitted hydropower needs no subsidies, NU has been openly lobbying to obtain special treatment for large-scale hydropower from Connecticut officials and the Connecticut state legislature.

Securities regulators should take note of this pattern of behavior and insist on honesty and transparency from NU, just as Massachusetts Attorney General Martha Coakley did when NU recently balked at revealing its CEO’s 2012 compensation package. As we’ve said before, investors, the public, and our energy future depend on accurate information and forthright disclosures from energy companies. That’s not what we’re getting from NU on Northern Pass.

On a sloppy March 19, while our changing climate threw a late winter storm of ice, snow, hail, sleet and rain at New England, a legislative hearing room in Hartford Connecticut was the focus of regional energy policy attention. The  Energy and Technology Committee of the Connecticut Legislature was holding a hearing on a bill to revise the Renewable Energy Portfolio standard of Connecticut – the Nutmeg State’s piece of the regional effort that has inspired a rising tide of wind and solar energy development across New England.

The bill before the committee that day, which bears the spine tingling and exciting name of “SB 1138 – An Act Concerning Connecticut’s Clean Energy Goals” was a complex piece of legislation making a whole series of changes to the important law that is Connecticut’s part of a successful regional effort to build new clean energy facilities.

An odd and disturbing subtext was this: at the very same moment that the hearing was going on the Connecticut Department of Environmental Protection (DEEP) announced and released online a study of the very program being revised by the proposed law.  This meant that as DEEP Commissioner Dan Esty was introducing and explaining a law to change a critical energy and environmental program his Department was releasing a draft study, which would go through two months of public process, to decide whether to make the very kind of changes that the bill he was introducing would make. This is very similar to a group of kids playing baseball in front of plate glass window while promising to have a really focused conversation about where (and where not) was a safe place to play ball, vowing to do so right after their game ended.

To be fair, there is a real urgency to one part of the bill: the provision that would enable Connecticut to move quickly, perhaps in cooperation with other states, to enter into long-term contracts with windfarms and take advantage of the limited extension of the federal renewable energy incentives that (unless Congress changes its mind yet again) only apply to projects that are in construction by the end of 2013 – a deadline that seems like a long ways away, unless you are trying to build a large facility like a windfarm, in which case you understand that getting contracts in place as soon as possible is needed to have shovels in the ground and construction underway by the end of the year.

But another topic was the main focus of the hearing: the proposal to allow large Canadian hydroelectricity to participate in the program, a change long sought by Canadian provinces who seek to import money in exchange for power – and a change long opposed by those who wanted to keep the program focused on building new wind and solar resources for New England.

The hearing brought forth a flood of testimony. While there were over 100 pieces of written and in-person testimony presented to the committee it appears that only the state-owned Hydro Quebec utility, who would likely handsomely benefit if the bill became law, and Northeast Utilities, who are trying to build the infamous Northern Pass transmission line to bring that power to market, testified in favor of the very controversial change in eligibility benefiting large Canadian hydropower.

CLF’s testimony on Bill 1138 criticized that change in the law as disrupting a very successful renewable energy program, as did the testimony of business leaders and labor unions and many, many others. Our testimony graphically illustrated the ever-rising progress of wind power in New England as RPS-inspired projects came on line and fed clean power into the regional grid.

Some members of the committee, including Rep. Brian Becker, actively raised the question of whether the urgent portion of the bill that would allow Connecticut to move forward with procurement of wind and solar this year, in tandem with other states, could be severed from the other controversial portions of the bill that could be reviewed and discussed separately. No real response was ever given to this very legitimate concern.

In the aftermath of the hearing some of the environmental and business groups who testified delivered a letter to the legislative leadership summarizing the situation and, extraordinarily, officials in Massachusetts state government expressed concern about the bill – telling reporters that:

Massachusetts has taken the lead, working very closely with other New England states, in putting together a regional procurement plan for renewable energy. While we embrace a wide range of clean energy initiatives, we have serious concerns about how Connecticut’s proposed changes to its renewable portfolio standard will affect the region’s renewable market

Undeterred by this criticism and controversy and ignoring the clear issues of good government and process, as well as the need to foster business development through clear and consistent rules adopted after careful process, the Committee met and considered a very slightly revised version of the bill on March 20 in a meeting recorded in an online video.  Eight members of the Committee expressed real concern about the deep and systematic changes being made to a critical clean energy program. They, once again, aired the idea of severing the one small provision that needed to be moved rapidly, considering the rest of the bill after the study, already underway, was completed. Again, they did not get a public response.  The final vote of 16-8 shows who on the Committee stood where.  It is indeed striking not one of the 16 who voted “yea” was willing to defend their vote.

All signs point to the bill continuing to move ahead at a very rapid clip – in fact it may come to the floor of the legislature for a vote as soon as March 27 – when new gun laws being considered in the wake of the Newtown tragedy will be absorbing public interest.

If you live in Connecticut, or know someone who does, please use our action alert to urge the legislative leadership to stop the rush towards changing this important energy and environmental program.  Instead, very specific and timely action to join with other states to enter into long term contracts with new windfarms is needed and the rest of the changes to the renewable energy program should be carefully studied and considered.

(photo credit: Jack Zalium/flickr)

Get ready: long-simmering chatter among lobbyists and officials in state houses and administrative agencies is about to become a loud, insistent chorus proclaiming that New England needs to give Canadian hydropower financial incentives so that our region can meet renewable energy and climate goals. This policy change would be a wrong turn for a region that is trying to build a truly clean energy future.

As we’ve been discussing for several years now, Québec and other eastern Canadian provinces are eager to increase power exports to New England, including through proposed transmission projects like Northern Pass. Our neighbors to the north have developed and are building more power than they need, and, until New England power prices began their historic decline, the economic motivation for increasing exports was clear: Canadian utilities like Hydro-Québec could sell power to customers in New England and the northeastern U.S. at much higher prices than their own domestic customers are paying. Profits from existing exports to the United States were and remain a major contributor to those utilities’ bottom lines, and they saw and planned to take advantage of a major opportunity to increase profits with new transmission capacity and newly developed hydropower facilities.

The economics behind this long-term Canadian strategy are increasingly in question. Following on the heels of recent technical analysis questioning the strategy’s underpinnings, the most recent projections from the U.S. Energy Information Administration show that total U.S. imports of all energy and electricity in particular are slated to decline over the next fifteen years, with electricity imports never again to achieve the peak level of imports seen in 2012. Given the availability of U.S.-based energy supplies at lower long-term prices, especially natural gas but also wind and other renewable sources, there will be less market demand in the U.S. for Canadian power. These projections reflect a very different reality from the prevailing expectations in 2008, when Hydro-Québec’s strategic plan and the Northern Pass proposal were taking shape. In a research note published last week, Stéphane Marione of Canada’s National Bank Financial warned that “none of the Canadian energy-producing provinces can ignore the profound changes that are taking place in the U.S.”

Montréal, we have a problem. In this new world, the potential market profits from Hydro-Québec’s export strategy are far less compelling. Hydro-Québec may not be able to sell power in New England at the prices it needs to recover the costs of building new transmission like the Northern Pass project and new hydropower projects like the Romaine complex and also return substantial export-driven dividends to the provincial budget.

One possible way that Hydro-Quebec could restore some of these profits is by convincing New England states to increase the price New England customers will pay for Canadian hydropower above the market price. While this may directly contradict the widely held assumption (and marketing claim) that Canadian hydropower is a low-cost power source that is economic without any special incentives, the cognitive dissonance has not prevented Hydro-Québec and Northern Pass developer Northeast Utilities from lobbying New England states to achieve just this goal, an effort CLF has opposed around the region, including in New Hampshire. (Hydro-Québec succeeded several years ago in convincing Vermont to allow its power to count towards a portion of the state’s renewable targets.)

Although the utilities’ lobbying is mostly outside the public view, it is increasingly occurring out in the open, with a direct and urgent new tone. Case in point: Hydro-Québec and Northeast Utilities recently filed comments on Connecticut’s draft energy strategy, which contained some language favoring expansion of Connecticut’s renewable portfolio standard program to include Canadian hydropower, the very policy change that the utilities are seeking. (Incidentally, the final strategy, released last week, made a few changes to the language, and Connecticut is now considering whether and how it might incentivize new imports in a separate study, which is due out soon.) So what did they say?

Hydro-Québec, through its U.S. trading subsidiary HQUS, commented that hydropower should be counted towards meeting Connecticut’s renewable objectives and that its hydropower is less costly than other renewables, but not all power in the marketplace:

HQUS urges Connecticut to recognize Hydro-Québec hydropower as a renewable resource and consider how it might contribute to achieving renewable objectives, as well as other important energy and economic goals. HQUS recognizes that Connecticut has multiple objectives for its renewable programs including to support the development of in-state and in-region resources and emerging technologies. However, if Connecticut’s priority is to maintain its commitment to renewable supply in a cost-effective matter, consideration should be given to the participation of Canadian hydropower. Allowing these resources to contribute to renewable objectives offers a pragmatic way for the state to lower program costs in the near term and, if desired, to extend and increase renewable goals into the future. An approach that values the multiple benefits of Canadian hydropower could also create a market signal necessary in today’s market to promote the infrastructure needed for incremental deliveries into the region for the benefit of all consumers….

Some stakeholders suggest that Hydro-Québec hydropower facilities are “cheap” or low cost to construct. This is incorrect. In fact the cost of building hydropower facilities is significant and generally also requires the construction of new transmission facilities to deliver generator output to load centers, which is also very costly. (Hydro-Québec has also proven successful in the development and construction of transmission facilities to deliver large quantities of electricity over long distances.) However, even with the added cost of transmission to deliver hydropower from Quebec into New England, HQUS estimates its costs to be significantly less than the cost of the delivering equivalent quantities of renewable power from other potential renewable resources in and near New England.

Northeast Utilities, through its Connecticut subsidiary Connecticut Light & Power, commented that hydropower delivered through new transmission projects should get incentives, which would count against the state’s current renewable requirements:

Connecticut has an opportunity to tap into Canadian hydroelectric facilities that are available now or under development, through the development of new transmission infrastructure. A Connecticut RPS market design, which acknowledges that RPS can not only enable new generation, but also support new, clean energy transmission infrastructure could, in this instance, provide for significant Connecticut customer savings….

CL&P believes Connecticut could create a new class of RECs for incremental hydro-electric supply that is delivered over a new transmission interconnection that has been built as an economic project (as opposed to a reliability-based one) which would supplant the need for meeting some portion of Class I RPS requirements….

CL&P believes that embracing large scale hydro power delivered on new transmission as a qualified renewable would meet all three of the State’s energy goals:

• It would be cheaper than other clean energy resources,
• It is clean with very low lifecycle CO₂ emissions, established by independent scientific reviews, and
• It is reliable, and would lessen the region’s dependence on natural gas for power generation needs.

It’s clear from these comments – and the utilities’ growing campaign to secure changes to New England’s renewable energy policies – that they are looking for subsidies from electric ratepayers to support new hydropower imports into the region. In fact, the Northeast Utilities comments constitute a direct effort to secure ratepayer subsidies for Canadian hydropower transmitted over Northern Pass, something Northeast Utilities repeatedly claimed it would not seek and does not need (e.g., here, here,  and here).* (For the record, they are mischaracterizing the emissions benefits to support their argument for subsidies. But that’s another story, well chronicled in prior posts.) Certainly, Hydro-Québec’s own comments reveal that its power can no longer beat the market on its own.

It’s also clear that, depending on how it is pursued, this kind of policy change threatens to put New England’s renewable energy industry at a deep and unfair disadvantage and to undermine its growth. Even Northeast Utilities, in the comments linked above, acknowledges this risk.

CLF has been clear that more Canadian hydropower could be a good thing for the region under the right conditions. But why should New England customers be forced to pay an above-market price? State renewable portfolio laws are intended to get new renewable projects built here, not to force ratepayers to pay extra to improve the economics of Québec’s new hydropower facilities and specific transmission development plans. That’s why CLF strongly objected to the draft Connecticut strategy’s mention of potential inclusion of Canadian hydropower in Connecticut’s renewable portfolio standard law. You can read our full comments, which address other major Connecticut energy issues as well, here.

It’s not too late for the New England states to get smart about new imports and make sure that new imports only happen, if at all, in cost-effective ways that allow alternative power sources and companies to compete on a level playing field, respect local communities, and provide meaningful economic and environmental benefits, accounted for in fair and open processes. Committing New England residents and businesses to pay above-market prices for Canadian hydropower isn’t one of them.

* from Northern Pass’s website, accessed today:

Providing economic clean energy—without a government subsidy

This will be one of the few—if not the only—renewable energy projects in the region that does not need a government subsidy to move forward. Hydro-Québec can generate and sell the power to us at prices that will compete with the average market prices that are being set today by fossil fuel power plants.

How are PSNH’s coal plants like Mark Sanchez? (photo credit: flickr/TexKap)

Earlier this week, the Concord Monitor published a must-read editorial addressing PSNH’s future. Much like an earlier widely-printed op-ed on the subject, the editorial correctly describes the PSNH death spiral of escalating costs, fleeing customers, and dirty inefficient power plants kept alive by massive ratepayer subsidies.

The editorial also points out one key reason why PSNH’s argument that its plants are an insurance policy against high natural gas prices is increasingly off the mark: it ignores the damage that those plants do to the climate and to the environment. In 2012, despite not operating for much of the year, PSNH’s plants were nonetheless collectively the single largest source of greenhouse gas emissions in New Hampshire.

As time goes on, PSNH’s “insurance policy” argument only gets more specious. Relying on inflexible power plants that take many hours to start up and shut down is diametrically at odds with the dynamic and advanced electric grid that will help New England move toward a clean energy future and address concerns around the region’s increasing use of natural gas. We know what we need to do: the region needs to reduce energy demand through cost-effective energy efficiency investments, to deploy clean renewable technologies like wind that displace fossil fuel use, and to optimize the rules of the wholesale electric market to ensure smooth operation of the grid. Indeed, regional grid operator ISO New England’s recent market design efforts will almost certainly make poor-performing, inflexible power plants like PSNH’s less competitive, not more.

Propping up outdated physical assets – with high fixed maintenance costs – in the hopes that they will someday become competitive again is not “insurance.” It’s the kind of backward thinking that no competent manager or economist would endorse.

As a matter of policy, PSNH’s strategy enacts the classic economic mistake of “throwing good money after bad” by placing too much emphasis on “sunk costs,” an unfortunately common problem that James Surowiecki recently discussed in The New Yorker in describing the irrationality of sports teams’ commitments to ineffective players, like the Jets’ Mark Sanchez, after years of poor performance and bloated salaries.

At least sports teams suffer the consequences of their choices – they lose. With guaranteed profit and regulator-approved rates to recover its costs, PSNH and its parent Northeast Utilities have continued to win, even after a decade or more of terrible investment decisions. Unless of course PSNH can be made to pay for the mess it has created.

The key paragraph of the Concord Monitor’s editorial argues precisely this same point:

[L]awmakers must ensure that the lion’s share of the loss is incurred by investors in PSNH’s parent company, Northeast Utilities, not by New Hampshire ratepayers. That includes the huge cost of the mercury scrubber. It was investors, after all, who gambled that it made sense to spend hundreds of millions of dollars to keep an old coal plant running. They could have said no. So it’s investors who should lose if that gamble doesn’t pay off.

As PSNH looks for opportunities to spread its costs to the New Hampshire businesses and households that have escaped PSNH’s high rates, this is timely advice for New Hampshire policymakers. They should heed it.

New Year's Eve in Times Square (photo credit: flickr/Mondayne)

The ball and other ceremonial objects have dropped, and 2013 has arrived. Although we mark the turn of the year with champagne, Auld Lang Syne, and a bevy of news stories and year-end blog posts, there’s not much genuinely “new” about the New Year. We hang a new calendar and start writing 2013 on legal briefs and checks (as the case may be), and life goes on.

Here in New Hampshire, the developer of the Northern Pass transmission project celebrated New Year’s Eve without any year-end changes. As revelers made their way to New Year’s Eve parties, in a classic “news dump” to minimize attention, Northern Pass Transmission LLC (NPT) posted a cryptic “project update” to its website. The update stated:

[W]e have identified a new route in the North Country that we will submit to the New Hampshire Site Evaluation Commission [sic] in the future for consideration and review.  We are in the process of finalizing this new proposal and will soon be prepared to announce its specific details….

We also recognize that while we are communicating with local citizens, stakeholders and public officials across New Hampshire, there is still much that can be done.  We believe this communication and dialogue is critical to the ultimate success of the new route and the project overall and felt it was necessary to take some additional time to continue these efforts before we publicly announce the new routing proposal.

In other words, NPT and its parent company Northeast Utilities (NU) had nothing new to announce, and the public will continue to wait for actual details and updated regulatory filings. And it’s not the first time Northern Pass’s developer has failed to deliver on its promise of a new route.

In May, NU set an August deadline for a route announcement; in July, NU set a September deadline; and throughout the fall, NU promised to finalize a route and file an updated Presidential Permit application with the U.S. Department of Energy by the end of the 2012, even going so far as to say that it had already obtained 99% of the land it needs. In this context, the Concord Monitor aptly reported on the New Year’s Eve “update”: Northern Pass misses deadline to unveil new route.

While NPT’s non-announcement wasn’t a surprise to CLF or others following the project closely, it was an important moment. It was, most of all, an embarrassing setback – the latest blown deadline after a series of blown deadlines stretching back to April 2011, when NPT decided to seek out a “new route” for the northernmost portion of the project.

NPT has been banking on its capacity to pay above-market land prices for a transmission corridor in the North Country. So far, the Society for the Protection of New Hampshire Forests, its supporters from more than two hundred New Hampshire towns and cities and also from around the region and country, and a number of courageous landowners unwilling to sell at any price have achieved remarkable success in blocking NPT’s efforts on the ground, property-by-property. It would appear NPT’s confidence was misplaced.

For NU executives and investors, Hydro-Québec, and Northern Pass enthusiasts in southern New England, the project’s latest blown deadline should be a wake-up call.

It’s not working.

Not NPT’s back-room strategy to assemble a serpentine series of parcels for a new transmission corridor in the North Country, without any meaningful changes to the project’s design or the southern 80% of its proposed route.

Not NPT’s attempts to game the federal permitting process in its favor.

Not NPT’s bogus claims of environmental and economic benefits for New Hampshire and of wide support for the project.

Not NPT’s campaign to discredit affected citizens in the nearly three dozen communities that have declared opposition to the project and the entire New Hampshire conservation community as “not in my backyard” types and “special interests.”

In the New Year, Northern Pass’s developers should recognize that half of the “dialogue” they are promising is listening. The latest blown deadline should signal, loud and clear, that the current Northern Pass proposal won’t be successful, new route in Coös County or not.

Photo courtesy of Wiertz Sébastien @ flickr.

It’s been a great year for CLF — and a great year on CLF Scoop. We’ve had lots of great posts by our advocates, staff and volunteers. See below for the most read 10 blog posts published in 2012.

Counting Down to Shark Week 2012
Nov 11, 2011 by Robin Just

The Promise of Urban Agriculture: New Growing Green Report
Jul 12, 2012 by Jo Anne Shatkin and Melissa Hoffer

Latest Research: Northern Pass Worse for the Climate than Advertised
Feb 14, 2012 by Christophe Courchesne

The “New Route” for Northern Pass Won’t Cure Its Failings
May 24, 2012 by Christophe Courchesne

Salem Harbor Enforced Shutdown: The Beginning of the End for Old Coal in New England
Feb 10, 2012 by N. Jonathan Peress

Risky Business: Leaking Natural Gas Infrastructure and How to Fix It
Nov 28, 2012 by Shanna Cleveland

Everything You Know Is Wrong: Growing the Economy Without Growing Electricity (and Energy) Demand
Oct 1, 2012 by Seth Kaplan

It’s Time to Stop Subsidizing PSNH’s Dirty Power
Feb 1, 2012 by Christophe Courchesne

Save the Beach or Save Your House: Which Would You Choose?
Apr 25, 2012 by Tricia K. Jedele

As CLF begins a third year of advocacy on the Northern Pass project, some updates are in order:

The “New Route” Drama

With 2013 only days away, it is looking more and more likely that Northern Pass Transmission LLC (NPT) will not have secured 100% of a “new route” for the project’s northernmost portion by year end, as its public statements have been promising for months. As chronicled in a Boston Globe front-page story published earlier this week (the national daily’s first major story on Northern Pass), landowners are rejecting repeated offers from NPT, and our friends at the Society for the Protection of New Hampshire Forests have secured agreements to conserve key parcels along what appears to NPT’s preferred new path. (According to report in yesterday’s Union Leader, NPT officials are readying some kind of “update” on the project’s progress, which may raise more questions than it answers.)

If NPT fails to make good on its promised “new route,” it will be a singular embarrassment and signal more wasted months of self-inflicted delay. It also will continue NPT’s troubling pattern of misleading investors and peddling falsehoods about the project.

Whatever the success of NPT’s attempt to buy a transmission corridor through New Hampshire’s North Country, Northern Pass overall will remain the same flawed proposal that affected communities and stakeholders have overwhelmingly rejected over the last two years. Susan Arnold of the Appalachian Mountain Club and I penned an op-ed with this message, and it was widely published in New Hampshire newspapers this month. Please take a moment to read the op-ed here.

NU’s False Statements Get Noticed

Over the last month, the Boston Globe, the Concord Monitor, Connecticut newspapers, and NHPR (complete with audio) published stories on Northeast Utilities CEO Tom May’s blatantly false statements about support for Northern Pass. Instead of correcting the comments, NU’s spokesperson compounded Mr. May’s misstatements by insisting, contrary to any possible interpretation of the comments, that Mr. May was speaking about support for the Cape Wind project – a renewable energy proposal backed by a strong public campaign that is co-sponsored by many of the region’s environmental groups. The contrast with Northern Pass couldn’t be starker.

A Broken Permitting Process

The Department of Energy’s permitting process for the Northern Pass project remains tainted by its abdication of responsibility to select an independent and impartial contractor to prepare the crucial environmental impact statement for the project. In a recent letter to Senator Shaheen, DOE repeated its prior position that it sees nothing wrong with the way the current contractor team was selected because NPT’s extraordinary role in the selection process was not unusual. As I explained in October, a precedent of repeating a mistake is no justification. In November, CLF filed a new Freedom of Information Act request to understand the activities of the contractor team, DOE, and NPT during the last year and the extent of NPT’s influence over the direction of the permitting process.

An Underground Alternative Emerges

Meanwhile, we are learning more about a realistic alternative to NPT’s current proposal that could address some community concerns and provide new public revenues. In November, a state legislative commission released an important report highlighting the feasibility of siting underground high-voltage transmission lines in state-owned transportation corridors. The report can be found here (PDF) and followed a lengthy process of collecting testimony and input from dozens of stakeholders, including CLF and a number of other conservation organizations. The report found that underground transmission technologies and corridors are “being used extensively throughout the U.S. and internationally,” “may increase the reliability and security of the electric transmission system,” and “may be technically and financially competitive with other transmission designs and locations.” The commission pointed to other pending transmission projects that incorporate underground technologies sited in state-owned transportation corridors as an indication that this approach “can be technically and financially viable.” (Earlier this week, New York officials recommended approval of one of these projects – the Champlain Hudson Power Express between Québec and New York City, which now includes more than 120 miles of underground high-voltage transmission in active railroad corridors and highways.)

While the state agency officials participating in the commission were reluctant to endorse specific policy proposals in the report (which they saw as outside the commission’s charge), many commission members emphasized the need for a proactive, comprehensive energy plan and a regulatory framework that would help New Hampshire assure that new transmission projects provide meaningful public benefits.

A majority of the commission’s legislator members recommended changes to the state siting process for energy projects, including a requirement that a transmission developer bring forward an underground alternative to any overhead project. It is expected that these recommendations will be among the many legislative proposals to amend the state siting law during the 2013 session of the New Hampshire legislature.

*             *             *

What will 2013 bring for the Northern Pass project and New Hampshire’s energy future? Stay updated by signing up for our newsletter Northern Pass Wire, and be sure to check in with CLF’s Northern Pass Information Center (http://www.clf.org/northern-pass) and all of our latest Northern Pass posts on CLF Scoop. You can also follow me on Twitter, where I often point to recent news articles on Northern Pass.

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.