This week, the New Hampshire Public Utilities Commission (PUC) dismissed a Petition for Approval of a power purchase agreement (PPA) between affiliates of Eversource and Hydro-Québec that is intended to ensure New Hampshire electric customers receive benefits from the Northern Pass project above and beyond what others in New England could receive. The PPA is not a requirement of the Northern Pass state permitting process, which moves into final hearings in April; however, such an agreement was desired as one aspect of the project’s direct benefits to New Hampshire.
Many people across the state, from the top political leaders to businesses and residential customers, suggested that New Hampshire receive its fair share of the power from Northern Pass in addition to the other benefits the project will bring. The PPA would ensure just that.
The PUC said that approving the PPA would be inconsistent with NH’s existing electric utility Restructuring Act, which was enacted in 1996 with the intention of lowering electricity rates for New Hampshire residents and businesses. The New Hampshire Legislature is currently considering a bill, SB 128, which would make it clear that the PUC has the authority to consider and approve measures that would lower costs for consumers, such as the PPA. The bill would allow the PUC to consider whether the PPA is likely to provide cost saving benefits to customers. That legislation does not provide any authority to shift costs of Northern Pass onto New Hampshire ratepayers as some have suggested. To the contrary, SB 128 expressly forbids inclusion of new infrastructure costs, such as Northern Pass, into customer rates.
We continue to support the effort to provide New Hampshire customers with unique economic benefits from this project, and will work with the Legislature and the PUC as necessary to provide a mechanism for the benefits of the PPA to be used to lower customers’ electric bills in New Hampshire. With or without the PPA, the overarching benefits Northern Pass will bring to the state – including 2,600 jobs, millions in local tax revenue, and the $200 million Forward NH Fund – will be substantial.
Below is a press release issued today by Eversource and Hydro-Québec (PDF version here):
MANCHESTER, New Hampshire (March 31, 2017) – In response to recent inquiries concerning the Northern Pass project, Eversource Energy and Hydro-Québec wish to reaffirm their mutual and strong commitment to the project and provide clarity about how the project will be funded.
“We are proud to partner with Hydro-Québec to deliver clean, reliable hydropower into New England,” said Jim Judge, President & CEO of Eversource Energy. “We are both committed to Northern Pass as part of the solution to New England’s energy challenges, and look forward to a successful outcome in the final stages of state and federal permitting in 2017.”
Northern Pass Transmission, Inc. (NPT), a wholly owned subsidiary of Eversource Energy, is developing the U.S. transmission project to interconnect with Hydro-Québec’s system and allow the delivery of 1,090 MW of clean hydropower into New England. NPT is responsible for financing and constructing the project, and will then recover its costs once the project is in service delivering power to the region. It is the method by which project costs will be recovered that has raised questions recently.
When the project was initiated, it was expected that NPT would recover its costs through future revenues that Hydro-Québec would receive from the delivery of energy into the New England wholesale market. More recently, however, alternative methods to pay for new transmission projects have been proposed by states seeking to procure deliveries of clean energy to meet their climate and energy diversity goals.
The next significant opportunity will occur this spring, when Massachusetts solicits proposals for large quantities of clean energy. If NPT is selected, its costs will be paid by the distribution companies that purchase Hydro-Québec’s clean energy. The Transmission Services Agreement (TSA), which was initially approved by the Federal Energy Regulatory Commission in 2011 and remains in effect today, will be amended and supplemented to reflect the outcome of the Massachusetts solicitation.
“Alongside Eversource, we are very much looking forward to participating in the upcoming Massachusetts request for proposals. The clean energy legislation adopted by Massachusetts recognizes the important role of hydropower in the supply mix. We already supply over 10% of New England’s electricity, but Hydro-Québec can do more to help the region meet its ambitious carbon reduction goals,” said Éric Martel, Hydro-Québec CEO.
Importantly, continued development of NPT does not depend on the outcome of any one solicitation, and Eversource and Hydro-Québec will continue to evaluate future opportunities as they arise. There is a clear and growing demand for clean energy in New England as the region faces the retirement of many older generating units and the need to achieve the region’s environmental objectives. Meeting this demand will require that additional energy infrastructure be built. To help meet this demand, Eversource Energy and Hydro-Québec stand firmly behind the Northern Pass project, and believe it will deliver significant value to the province of Québec and advance New England’s clean energy future.
The Northern Pass is a 192-mile electric transmission line project that will bring New Hampshire and the rest of New England 1,090 megawatts of clean hydropower. This reliable and affordable source of power will also bring a wide range of benefits exclusively to New Hampshire, including millions of dollars in energy cost savings, additional tax revenue, and jobs during construction. To learn more about Northern Pass, go to www.northernpass.us. You can also email questions to firstname.lastname@example.org or call 1-800-286-7305.
Eversource (NYSE: ES) transmits and delivers electricity and natural gas for more than 3.6 million electric and natural gas customers in Connecticut, Massachusetts and New Hampshire. Eversource harnesses the commitment of its more than 8,000 employees across three states to build a single, united company around the mission of delivering reliable energy and superior customer service. For more information,
please visit our website (www.eversource.com) and follow us on Twitter (@EversourceCorp) and Facebook (facebook.com/EversourceEnergy).
Hydro-Québec generates, transmits and distributes electricity. Its sole shareholder is the Québec government. While using mainly hydroelectric generation, it supports the development of other technologies—such as wind energy and biomass—through purchases from independent power producers. It also conducts R&D in energy-related fields, including energy efficiency. The company has four divisions: Hydro-Québec Production, Hydro-Québec Transénergie , Hydro-Québec Distribution and Hydro-Québec Équipement et services partagés and Société d’énergie de la Baie James (SEBJ), a subsidiary of Hydro-Québec. For more information, please visit our website and follow us on Twitter (@HydroQuébec).
A recent op-ed in the New Hampshire Union Leader challenges the idea that the state doesn’t need to improve on its energy infrastructure. As the regional grid operator, IOS New England has repeatedly said, “Unless and until there is new infrastructure in the region, we will face continuing threats to our electric grid.
March’s stormy weather was no match for the first off-shore wind farm in the U.S. Deepwater Wind, off the coast of Rhode Island, got through the storm without any problems while capturing the maximum amount of energy it could- 30 megawatts.
Energy officials from around the region gathered recently to discuss the future of renewable energy in the region. Cooperation is key, they agreed, but keeping an eye on costs is as well.
Maine legislators approved a $13 million bailout of the biomass industry last year with the hope of keeping plants open and keeping loggers working, but there are some questions now as to whether the move worked.
Union Leader, 26 March 2017
Rhodes Island Public Radio, 17 March 2017
RTO Insider, 27 March 2017
Bangor Daily news, 28 March 2017
The Northern Pass permitting process continues to advance, with final hearings beginning in two weeks, on April 13. The hearings are conducted by the NH Site Evaluation Committee (SEC) and are the last step in the state siting process before the SEC makes its decision on Northern Pass. The final hearings follow the recently completed “discovery phase,” which involved several months of technical sessions.
The final hearings are formal legal proceedings, during which testimony will be presented by Northern Pass and project experts to the SEC, including data on benefits, construction procedures, environmental impact, and other aspects of the project. The Counsel for the Public and interveners will also provide witness testimony at this stage. Witnesses for all parties will be subject to cross-examination. The dates of the final hearings are available on the SEC website under the Northern Pass docket.
The commencement of final hearings in April follows a series of important milestones and achievements for Northern Pass, which include:
There has recently been inaccurate information initiated by opponents of the project regarding the agreement between Northern Pass Transmission and Hydro‑Québec. The information below is intended to set the record straight. As we have stated previously, New Hampshire consumers will not pay for any costs associated with the project.
New England energy officials are looking for ways to better incorporate renewable energy into the market, including possibly recognizing nuclear power as a non-carbon emitting source.
FERC has already approved several new pipelines in 2017, largely to transport natural gas produced in the eastern United States. None of these pipelines are located in New England.
While federal policies on trade have created tension among our closest neighbors, this story indicates energy trade between the U.S. and Canada will remain strong. In fact, Canada today is our largest trading partner when it comes to energy.
The New York Observer had some harsh words for Gov. Andrew Cuomo, who has long pushed for the closure of Indian Point nuclear power plant. The facility supplies 25 percent of New York City and Westchester County’s energy (as well as supplying some energy to southern New England), yet, the editorial argues, there is no clear answer as to how to replace that power when Indian Point retires in 2021.
RTO Insider, 13 March 2017
EIA today in Energy, 7 March 2017
CNBC, 6 March 2017
Energy Information Administration, 1 March 2017
Observer, 3 March 2017
There have been questions raised recently about the cost of the Northern Pass project and the means of recovery of those expenses. The statement below is an explanation of the continued relationship between Northern Pass and Hydro-Québec.
Eversource and Hydro-Québec have had a long-standing partnership to develop a transmission project that would deliver much-needed clean hydropower from Québec to New England energy consumers. Northern Pass Transmission, an Eversource subsidiary, will finance and build Northern Pass, the US portion of the transmission project. Hydro-Québec will do the same for the Canadian portion of the project.
The cost of Northern Pass will be recovered through use of the transmission line for delivery of energy to New England.
There is currently a large and growing demand for clean energy in the region to replace retiring generating units and meet aggressive carbon reduction goals. The next significant opportunity will occur later this spring when Massachusetts begins a solicitation process to secure long-term commitments to deliver large amounts of clean energy to the Commonwealth. Eversource and HQ are working together to submit a very competitive proposal to Massachusetts for the delivery of hydropower from Québec using the Northern Pass transmission line, which will go a long way towards achieving the Commonwealth’s goals.
Recovery of the Northern Pass project costs will be part of the proposal. However, as we have stated previously, New Hampshire consumers will not pay for any costs associated with the project.
Annual report shows results of conservation and restoration projects throughout the state
The eight conservation and restoration projects funded in 2016 by Partners for New Hampshire’s Fish and Wildlife are boasting significant results, according to the initiative’s 2016 annual report. The local organizations that received grant funding last year have opened 148 miles of streams, removed eight barriers to fish passage, assessed nearly 11,000 acres of forest, and restored 1,431 acres of forest. The effort also utilized the help of 230 volunteers, making these more than grant projects, but also community conservation programs.
Partners for New Hampshire’s Fish and Wildlife is the result of a partnership involving Eversource, Northern Pass and the National Fish and Wildlife Foundation (NFWF). Eversource, through its subsidiary Northern Pass, has committed $3 million to conservation and restoration of key habitats and species. Through Partners for NH’s Fish and Wildlife, NFWF works with a variety of stakeholders — private landowners, government agencies, academic institutions and conservation groups — to cultivate science-based conservation strategies and cost-effective on-the-ground projects. Since launching in 2015, Partners for NH’s Fish and Wildlife has funded a total of 17 projects that, including NFWF and grantee matches, resulted in $4.7 million dedicated to conservation and restoration in and around the state.
The 2016 projects include:
Restoring stream banks and improving forest management to benefit Eastern brook trout in Belknap County
Improving habitats for pollinators, including the monarch butterfly and various species of bees in transmission line corridors
Analyzing young forest restoration and management to ensure best practices are being used to protect conservation-priority species, including New England cottontail, golden-winged warbler, prairie warbler, blue-winged warbler, Eastern towhee and brown thrasher The Partners for NH’s Fish and Wildlife Annual report is now available online at http://www.nfwf.org/eversourcepartners. It includes a summary of all the 2016 grant initiatives. Later this year, the Partners will also include information about 2017 grants, made available through a request for proposals (RFP) process.
An update to the Northern Pass economic and environmental analysis shows that the project will reduce wholesale energy costs in New Hampshire by $63 million annually, and eliminate up to 3.2 million tons of carbon emissions in the region each year. The wholesale energy price reductions will ultimately flow to customers as retail energy cost savings. The significant reduction in emissions will help New England states achieve clean air goals.
“…LEI’s modeling update demonstrates that Northern Pass will deliver significant benefits to ratepayers in the form of lower electricity costs, carbon emissions reduction, and a more efficient system…”
London Economics International Updated Analysis, February 2017
The study, done by London Economics International (LEI) and filed with the NH Site Evaluation Committee as part of the project’s ongoing state permitting process, provides an update to a 2015 LEI study that showed similar CO2 emission reductions and average regional economic savings of about $800 million annually.
New Hampshire consumers will:
• Not pay any costs associated with Northern Pass
• Receive hundreds of millions of benefits unique to NH
• Save about $63 million
ISO-NE report reveals closing of nuclear plants caused increase in fossil fuel use
For nearly a decade, New England had been making strides in reducing air pollution and lowering carbon emissions from power plants. Adding more generation powered by natural gas, which has lower emissions than other fossil fuels, as well as using more renewable sources of energy, had helped in the decline. But a study released recently by the regional grid operator, ISO New England, shows that the trend in reducing carbon emissions has begun to reverse, largely due to closing nuclear plants and using natural gas and other fossil fuels to replace the low-carbon power source.
Between 2014 and 2015, New England saw a 15 percent decrease in production of low-carbon energy. This drop is due to the loss of more than 600 megawatts from the Vermont Yankee nuclear plant. During that same period, natural gas-fired generation increased by about 12 percent. While natural gas has lower emissions than some other energy sources, a lack of supply of natural gas during winter months forced the grid operators to turn to higher-emitting sources. This includes oil-fired generation, which increased production by 10 percent last year and contributed to the up-tick in CO2 emissions.
“The increase (in oil-fired power) came largely in January, February, and March — the same months that natural gas-fired generation made its lowest contributions for the year,” ISO New England said in a statement. “This phenomenon largely reflects winter-time constraints on the interstate pipelines bringing natural gas into the region.”
Northern Pass has long advocated for the addition of clean, base load power from Canadian hydropower to offset the loss of generation the region has seen in recent years and to diversify its energy mix. Northern Pass will ensure a constant flow of power when New England needs it, including during winter months when natural gas supplies are strained.
For more information on the increase in carbon emissions and the state of the regional grid, go to the ISO New England website.
The ISO New England’s 2017 Regional Electricity Outlook was released last week and outlines significant changes the grid will face in the coming years as the region transitions to more natural gas and renewable sources of electric generation.
With the retirement of Pilgrim nuclear power station coming up in 2019, Massachusetts’ ability to meet carbon emission reduction targets is being called into question.
Without additional infrastructure to deliver the reliable, clean energy needed to satisfy demand during the region’s coldest winter months, states may see carbon emissions increase as less efficient, more polluting sources, such as coal and oil, are called upon.
The ISO New England Regional Electricity Outlook also reveals the region’s power sector saw a 2.9 percent increase in its carbon emission rate following the retirement of Vermont Yankee nuclear station in 2014.
New York’s Indian Point joins the ranks of nuclear plants scheduled to close. The plant’s closure means the region will need to replace more than 2,000 megawatts of power by 2021.
ISO-NE, January 2017
The Boston Globe, 13 February 2017
CommonWealth Magazine, 22 February 2017
MassLive.com, 18 February 2017
WAMC, 23 February 2017
Northern Pass reached another significant milestone yesterday when the New Hampshire Department of Environmental Services (DES) issued four key approvals of the project. DES’s decisions pertained to the Wetland, Shoreland and Alteration of Terrain permits, and the 401 Water Quality Certificate. The approvals are essential components of the state siting process being conducted by the NH Site Evaluation Committee (NH SEC), and according to DES, mark the conclusion of the agency’s review of the project’s siting application. The NH SEC is scheduled to render a final decision on the Northern Pass application later this year.
The approvals from DES follow a series of important milestones and achievements for Northern Pass, which include: