[Q]uebec taxpayers scored a major victory last week when their state-run utility, Hydro-Quebec, won an historic contract to supply enormous quantities of hydroelectric power to Massachusetts.
The project is called the Northern Pass transmission line, and will transmit up to 1,090 megawatts at a time; the contract with Massachusetts is for 9.45 terawatt-hours, which is enough electricity to power 1 million homes for a year.
Hydro-Quebec’s cut of the proceeds will pay for things like hospitals and schools for Quebecers, a Hydro-Quebec representative said.
A Montreal news outlet reports that the contract is likely to bring Hydro-Quebec around $10 billion.
The development all but closes off a major source of funding Gov. Phil Scott hoped would materialize to pay for a federally mandated reduction in the state’s water pollution.
To comply with state and federal clean-water laws, Vermont will need to find an additional $1.2 billion over the next 20 years. The project backed by Transmission Developers Inc. would have brought Vermont $6.5 million in funds dedicated to improving Lake Champlain, each year for 20 years.
Scott still hopes the TDI proposal will come together somehow, his spokeswoman, Rebecca Kelley, said.
“We continue to view the TDI project as well-designed and shovel-ready, and we’re hopeful that there could still be a path forward for this project,” Kelley wrote in an email.
“TDI has expressed continued interest in identifying how to serve the growing needs of the region so this could move forward through other channels,” Kelley wrote. “Additionally, with the potential for the selected project to be tied up in an extended permitting process, we remain hopeful there could potentially be a path forward with Massachusetts as well, should they need to revisit the decision.”
The Northern Pass project is still in the permitting process, not having yet received a key permit from New Hampshire, said Martin Murray, spokesman for the Northern Pass project.
In New Hampshire the project still faces vociferous opposition from environmentalists who are blocking the final, necessary permit from the state.
Environmental law group Conservation Law Foundation is among those who oppose the project, and a staff attorney at CLF’s Vermont arm said it’s “unfortunate” that Massachusetts chose the project before the New Hampshire power line has been approved.
“This is certainly a slap in the face to the many communities and people in New Hampshire who have strongly opposed the project,” said CLF senior attorney Sandra Levine.
The Conservation Law Foundation group was instrumental in winning over $100 million in benefits for the state of Vermont from TDI, about $6.5 million annually that Scott had hoped would boost Lake Champlain cleanup efforts.
In contrast to the TDI project, which CLF agreed not to oppose, the Northern Pass project has been characterized by opaque business dealings and misrepresentations to the public, Levine said.
In fact, CLF saw so much misinformation in connection with the Northern Pass project that the environmental group asked Massachusetts to disqualify the bid submitted by Northern Pass, Levine said.
Levine said it’s suspicious that companies involved in the project are represented by voting members on the Massachusetts panel that selected the Northern Pass project from among 46 other bidders, Levine said.
Eversource is the parent company of Northern Pass and has several subsidiary Massachusetts utilities, that, in cooperation with state regulators, chose the New Hampshire project over other options.
The Conservation Law Foundation says the selection process was corrupted by corporate nepotism.
“Choosing Northern Pass reflects a process corrupted by the heavy hand of our region’s largest utility,” Greg Cunningham, director of CLF’s clean energy and climate change program, said in a press release last week.
The bidding process is now under investigation by the office of Massachusetts Attorney General Maura Healey.
“On behalf of our state’s energy customers, our office will conduct a comprehensive review of the procurement process,” Chloe Gotsis, Healey’s spokeswoman, said in an email. “Our role is to ensure that this bid was selected based on a transparent, competitive and fair evaluation of all the proposals submitted.”
Unlike the TDI project and some of its competitors, the Northern Pass project will at no point cross through Vermont.
Hydro-Quebec will build a high-power transmission line to the American border; a Massachusetts company called Eversource will extend the line from New Hampshire’s Canadian border to Deerfield, Massachuesetts, where it will tie into the New England grid. In addition to building the Canadian half of the transmission line, Hydro-Quebec will sell Massachusetts the hydroelectric power the line will carry.
Hydro-Quebec is a utility owned by the province of Quebec, and as such, the company’s revenues pay for public services for Quebecers, said Lynn St-Laurent, a public affairs and media adviser at HQ.
“We operate like a private company, with the difference that we have one shareholder, and that’s the Quebec government,” St-Laurent said.
In 2016 Hydro-Quebec put $2.146 billion into the Canadian province’s coffers, she said. That money paid for things like health care and education, St-Laurent said. Quebecers also pay the lowest residential electricity costs of anyone in North America, according to the company’s 2016 annual report.
The agreement HQ makes with Massachusetts through the Northern Pass project (the final signatures are not yet written, but nearly) is the most important export contract in the company’s history, St-Laurent said.
“This lays a foundation for the northeast region to transition to a cost-effective, clean-energy future,” she said.
“For Quebec, this is an opportunity to further our commitment and relationship with the northeast, and contribute to their energy transition,” St-Laurent said.
As the northeast transitions away from fossil fuels for its energy, St-Laurent said, “we feel that we can be the natural battery for northeast North America.”
Hydro-Quebec’s segment of the transmission line will cost $680 million to put in; the American side of the project is estimated to cost $1.2 billion. The project will require Hydro-Quebec to add no new generators to its existing generating capacity of around 37,000 megawatts.
The project is expected to reduce carbon-dioxide emissions annually by more than 3 million tons, said Martin Murray, spokesman for the Northern Pass project. The project is expected to save New Englanders $600 million annually in electric costs as well.
Massachusetts accepted more than 40 bids in response to a request the state published seeking large volumes of renewable electricity to cut greenhouse gas emissions. The state currently generates about three-quarters of its electricity from natural gas and coal.
A decision on the New Hampshire siting permit is expected in February, Murray said.
“We have a high degree of confidence we meet the criteria New Hampshire set out,” Murray said. Part of that confidence comes from the level of scrutiny the project’s already received, he said: Northern Pass applied for the siting permit in 2015, and it’s usually a 12-month process.
Deliberations on the case begin Tuesday, Jan. 30, and will last 12 days, Murray said.
Assuming New Hampshire signs off on it, work on the Northern Pass project will commence in the fall, and the cable is slated to carry power by 2020.
