Boston Globe Columnist on the NU/NStar Settlement and Hydroelectric Power from Quebec

Seth Kaplan

Steven Syre, in his widely read Business news column in the Boston Globe, delves into one of the many important aspects of the settlement between the Commonwealth of Massachusetts and Northeast Utilities and NStar, setting the stage for those two utilities to proceed with their plans to merge. As he notes, most of the attention (understandably) about that settlement has been focused on the provision regarding the purchase of power, by NStar on behalf of its customers, from the Cape Wind project.

However, Syre discusses the provisions of the settlement regarding imports of power from large hydroelectric facilities in Quebec into New England. He notes that the settlement includes a commitment by the Massachusetts utilities signing the agreement that they would not use any large hydropower to meet state-mandated renewable energy targets for the next five years and describes the concerns that lead to this conclusion.

Syre describes how, “State officials and others point to several reasons why it would be a bad idea to count hydropower as a source of power that qualifies as renewable energy. They say that such a designation could increase the price of hydropower and hinder the long-term development of other forms of renewable energy.”

He notes that:

“Other critics even think Hydro-Quebec’s environmental benefits are being oversold. A new study commissioned by the Conservation Law Foundation says large-scale Canadian hydropower will produce ‘substantial greenhouse gas emissions that are comparable to those of modern natural gas-fired power plants.'”

CLF’s take on the agreement grows out of our deep involvement in the merger proceeding and our engagement with many issues that are addressed in the settlement. These include both the Cape Wind project and the questions about the net environmental impact of large hydroelectric power. CLF commissioned the study that Syre discusses, as well as a related analysis that highlights the existential threat to New England-based renewable power from designating large hydropower as eligible for financial incentives under our renewable energy laws.

All of the provisions of the agreement work together to move towards the goal of net gain for the customers of the merging companies and movement towards attaining the important environmental goals of Massachusetts. As Sue Reid of CLF, our lead advocate on the merger, said about the settlement, it is a significant advancement for Massachusetts and all of New England in a number of regards:

  • It removes the last major hurdle to building Cape Wind;
  • It ensures that the Commonwealth will continue to reap the cost savings and environmental benefits of the Massachusetts Green Communities Act;
  • It will help ensure that imported hydropower does not diminish other renewable energy deployment in Massachusetts and beyond;
  • It will reduce barriers to installation and operation of small, distributed renewable energy generating facilities in Massachusetts; and
  • It will freeze the merged utility’s rates for 4 years, will require transparent public review of NSTAR’s electric and gas rates before the rate freeze expires, and will deliver – upon approval of the merger – an immediate 50% credit to Massachusetts customers based on expected merger savings during the first 4 years following merger approval.

All of these provisions are significant and are reason to hail this agreement as an important landmark in the evolution of our energy system and the march towards a cleaner and better future where our economy, environment and communities can all thrive.

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