It’s become increasingly clear in the last few weeks that the Northern Pass project cannot go forward financially unless it wins the Massachusetts Clean Power RFP on terms favorable to Northern Pass. To proceed with the state Site Evaluation Committee adjudicatory hearings before the Massachusetts RFP is awarded will be a colossal waste of state, municipal and private resources.
The SEC adjudicatory hearings are a full-blown trial – one of the most important trials our state will see in the 21st century. The scores of intervenors in the proceeding, never mind applicants Northern Pass Transmission LLC and PSNH, will spend hundreds of thousands of dollars on attorneys and expert witnesses. Dozens of state employees, including SEC members, professional and administrative SEC staff, and witnesses, will spend countless hours at taxpayers’ expense participating in the hearings – time that could otherwise be used serving the people of New Hampshire. The individual citizen intervenors, many of whom are appearing pro se, will spend days and days at these lengthy hearings.
And if Northern Pass does not win the Mass RFP, it will be precious money and time poured down the drain.
Ten years ago PSNH and Hydro-Quebec first cooked up the widely criticized idea of building 192-miles of transmission towersthrough New Hampshire to bring Canadian hydro power to southern New England. At that time, the cost of power in New England was high enough that even with the very expensive transmission line factored into the price per kWh, it looked like it would be competitive in the New England power market. That’s why the Transmission Service Agreement reached between Northern Pass and Hydro-Quebec and filed with FERC makes Hydro-Quebec responsible for the cost of constructing the transmission line.
But Hydro-Quebec no longer intends to pay to build the line. With low-cost natural gas now flooding the New England power market, the power that would travel via Northern Pass simply cannot compete unless the $1.6 billion transmission line is subsidized by someone else. Indeed, despite the clear terms of the Transmission Service Agreement, Hydro-Quebec has publicly and emphatically stated in recent weeks it will not pay one cent of the cost of the Northern Pass transmission line in New Hampshire.
When it became clear it could not compete in an open market, Northern Pass started looking for other pockets to pick, trying to get consumers in Connecticut, Rhode Island and Massachusetts to cover the cost of building the $1.6 billion line when it submitted a proposal in response to the New England Clean Power RFP. Northern Pass lost.
Now it’s putting its eggs in the Massachusetts Clean Energy basket, the RFP for which was issued last Friday. Given that the Eversource MA electric utility helped write the RFP and will help choose the winner, Eversource-owned Northern Pass may believe its chances are good. But last week National Grid, which also owns an electric utility in Massachusetts that is playing a role in the RFP, announced its proposal for a transmission line through Vermont and New Hampshire. The Grid proposal seeks to bring power from Canada along existing transmission lines, rather than gashing New Hampshire with a new line as Northern Pass would, and will compete for the Massachusetts RFP. And the estimated cost for National Grid’s proposal is $600 million lower than the cost of Northern Pass. Also expected to compete is the fully-permitted and less expensive TDI transmission line that will run through Vermont.
Northern Pass claims it will have other financing options if it fails to win the Massachusetts Clean Power RFP. What are they? It won’t say. But the fact is it simply cannot compete without a $1.6 billion subsidy from somewhere.
The right thing now would be for Eversource and Northern Pass to voluntarily ask the Site Evaluation Committee to postpone the adjudicatory hearings until the Mass Clean Power RFP winners are announced. But it won’t.
Several municipal intervenors have filed a motion with the SEC asking that the hearings be postponed for six months while the questions over Northern Pass’s financing are resolved. To prevent a historic waste of time and resources, the SEC should grant this sensible motion.