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.

The wait is finally over. There is a clear path to the complete shutdown of Salem Harbor Station by June 1, 2014. Yesterday, ISO-NE presented its preferred option for upgrading the transmission system to relieve any need for the polluting, obsolete, and un-economic coal- and oil-fired plant. The solution is simple, cost-effective, and clean.

Instead of propping up the 60-year-old plant with above-market payments to be on call when electricity demand is highest, a transmission solution would upgrade the lines so they can carry more power into the area. The advantages are clear: by upgrading the transmission infrastructure, ratepayers will reap the benefits of a reliable system for years into the future at much lower cost than continuing to operate an out-of-date plant that emits tons of toxic pollution into the air each year.

The preferred alternative identified by ISO-NE is one of four that it presented in a compliance filing it submitted to FERC in December of 2010. FERC had directed ISO-NE to identify these solutions as the result of a protest lodged by CLF. The presentation yesterday was a result of Dominion’s February 2011 request to retire all four units at Salem Harbor Station. Although ISO-NE determined that Units 3 & 4 may still be necessary for reliability under existing system conditions, it has concluded that the proposed alternative would allow the units to retire without impacting system reliability.

The focus on existing lines, rather than building new ones, would reduce the cost and the timeline for implementation of the solution. CLF is confident that these upgrades can be completed and placed in operation in time to ensure that Salem Harbor Station shuts down no later than 2014, and possibly even earlier. With a confirmed date for shutdown, Salem residents and area ratepayers can better anticipate what’s next for Salem and pursue clean energy alternatives and economic development options now being studied for the site. CLF will work with ISO-NE, the transmission owners, and state agencies to make an expedited shutdown a reality.

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

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

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

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

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

Last Friday, the U.S. Department of Energy (DOE) announced in the Federal Register that it’s extending to June 14, 2011 the deadline for submitting scoping comments on the proposed Northern Pass electric transmission project.

UPDATE:  As of June 15, 2011, DOE has again reopened the comment period – this time indefinitely – pending the submission of updated route information from Northern Pass.  See more here.

This extension of the public comment period comes on the heels of huge turnouts at DOE’s seven public meetings in March and the news (noted on NHPR here and in the Concord Monitor here) that the developer of the project wants DOE to stop considering several alternative routes for the project in favor of its original preferred route.

DOE’s extension means that you still have an important opportunity to help shape the environmental impact statement (EIS) and influence DOE’s decision on the project.  The EIS will be a detailed statement of the environmental, social, and economic impacts of the Northern Pass proposal and alternatives.

What Should I Address in My Comments?

CLF encourages you to raise any reasonable concern or question about the proposed Northern Pass project and alternatives:

• Describe how the project could affect the natural resources that you value.
• Explain your concerns about the potential impacts of the project on scenic landscapes, communities, wildlife, forest resources, wetlands, recreation areas, the energy sector, and the local economy.
• Demand that DOE analyze the environmental impacts associated with generating the hydroelectric power that the project will transmit.
• Insist that DOE rigorously examine all reasonable alternatives to the project, including alternative project designs (like burying the lines in railroad or highway rights of way) and options that would generate or save the same amount of power here in New England (like local renewable energy, energy efficiency, or conservation programs).
• Join CLF’s request for a comprehensive EIS that assesses New England’s need for Canadian hydropower and develops a more holistic, proactive plan for addressing any such need (as opposed to reacting to project-specific proposals such as Northern Pass)

How Do I Submit Comments?

To comment, email DOE at Brian.Mills@hq.doe.gov or use DOE’s Northern Pass EIS web form by June 14, 2011.  UPDATE: As mentioned above, the deadline for comments has been extended again – to a date yet to be determined.

For More Information

• Visit CLF’s Northern Pass Information Center at http://www.clf.org/northernpass, and download CLF’s detailed written comments to DOE.
• Check out project maps and Northern Pass’s application filings (available at http://www.northernpasseis.us, under “Document Library”).
• Contact me at ccourchesne@clf.org.
• Become a member of CLF here, to support us in our work.

Daniel Johnson Dam, north of Baie-Corneau, Québec

Last night, CLF filed detailed written comments with the U.S. Department of Energy (DOE) regarding the scope of the Environmental Impact Statement (EIS) for the Northern Pass project. (A PDF of our comments is here.)   First and foremost, our comments urge DOE to stay the Northern Pass proceeding and instead conduct a comprehensive, regional analysis (a comprehensive EIS) of the region’s need for Canadian imports, to enable sound planning as opposed to the piecemeal, project-by-project approach DOE is currently taking by simply reacting to the permit applications of private entities like Northern Pass.   

Our comments expand on the remarks (PDF) I made at the Pembroke scoping meeting last month and come on the heels of yesterday’s major news that (1) Northern Pass wants DOE not to consider some alternative routes it included in its Presidential Permit application and also needs more time to discuss additional potential routes through the North Country (a PDF of Northern Pass’s filing is here and coverage on NHPR here) and (2) DOE is reopening the scoping public comment period through a date to be determined in June.  The fact that Northern Pass itself has asked for a delay to reconsider aspects of its project is an even stronger indication that DOE can and should take the time it needs to undertake a full regional analysis through an open, and collaborative public process.   

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If the U.S. Department of Energy (DOE) does its job right, the environmental review of the Northern Pass project – the largest infrastructure project in recent New Hampshire history – will be a massive and complex undertaking, analyzing all alternatives to the current proposal and describing the many social and environmental impacts of the project.  That’s why it’s critical that DOE begin its work with the right plan – one that takes into account the tremendous public input DOE has received during the ongoing scoping process and that also reflects DOE’s technical expertise, especially regarding the possible technological alternatives to the current proposal.  (Information on the scoping process and how to submit comments to DOE is here – the deadline for written comments is April 12.)

Today, in a joint letter to DOE, CLF and several partners renewed their request (also made at the mid-March scoping meetings) for DOE to release a report – before it begins work on the draft Environmental Impact Statement (EIS) – identifying the alternatives DOE plans to study in depth, the alternatives it plans to exclude from the analysis, and the categories of social and environmental impacts that it will consider.  We believe that DOE should not only prepare such a report, but also provide the public the opportunity to comment on it.

The report on the scoping process that DOE currently intends to issue – one that simply summarizes public input – is not enough, especially for this project.  The project application provided almost no information on alternatives and environmental impacts (something CLF and others vehemently objected to months ago), and that lack of information has undermined the public’s ability to provide meaningful feedback during the scoping process as a result.

Before DOE and the EIS contractor it ultimately selects to replace its original contractor begin studying the project and its alternatives behind closed doors, the public deserves to know DOE’s plan and to have the chance to suggest changes to that plan. Otherwise, DOE may “re-emerge” from its work months from now with a document that misses important alternatives and will be very challenging to change – a result that would be problematic for DOE and the public alike.  DOE needs to get it right the first time, and the public should be invited to help ensure that DOE has the right plan to do so.

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.