Study by highly regarded Analysis Group spotlights lack of transparency, key omissions and incorrect assumptions
CONCORD, NH — Protect the Granite State, today released a study by the highly regarded Analysis Group that critiques the economic impact analysis of NPT prepared by London Economics International (“LEI”) in 2015.
“Today’s detailed report by analysts at Analysis Group underscores how important it is to take a close, analytically sound look at the flimsy assumptions, flawed methodology, omission of potential negative impacts and transparency—or lack thereof—in the LEI study,” said Judy Reardon, senior advisor for Protect the Granite State. “The investors in the proposed Northern Pass project have relied on the LEI study, a so-called cost/benefit report, in recent years to justify the project. However, as the Analysis Group review makes clear, the LEI study focuses only on the alleged benefits of the project, while failing to consider the significant costs to New Hampshire residents and ratepayers who will ultimately bear the burden of a transmission line if constructed,” concluded Reardon.
Some of the conclusions of the Analysis Group report concerning the LEI study include the following:
- While claiming to be a “cost/benefit” analysis, the LEI study examines only the purported benefits of Northern Pass, but not the costs;
- The public version of the report is atypical in the amount of information that is redacted, severely limiting the public’s ability to objectively analyze its findings;
- The report’s conclusions are based on several incorrect assumptions;
- The study fails to account for significant negative impacts including potential adverse impacts on tourism, New Hampshire’s second-largest industry; potential for lost jobs and property taxes from the closings of other power plants in New Hampshire; and inhibiting construction of other power plants in New Hampshire which would support local jobs and construction dollars;
- NPT is an expensive line to build. The NPT Line would likely cost $55/MWh (or 5.5 cents per kWh) above and beyond the expected cost of power to New England customers, due to the cost of actually constructing the line. While other studies have assumed that this cost is borne by customers outside of New Hampshire, Analysis Group’s report points out that this outcome is unlikely. In addition, the cost could be even larger due to the need for Hydro-Quebec to construct additional hydro resources that would be priced in as well;
“As someone who has many decades of experience in participating in and observing state and federal agencies’ reviews of energy facilities, I am familiar with the kinds of studies that are openly available to members of the public,” said Dr. Susan Tierney, one of the authors of the Analysis Group report. She said further that the “LEI Study has pages upon pages of assumptions, inputs, and intermediate outputs that are blacked out. This is highly unusual, even in situations where a project developer will eventually participate in competitive processes, and it makes it virtually impossible for the public to test and verify the results.”
A complete copy of the Analysis Group executive summary and report is available here.
About Analysis Group
Analysis Group, Inc. provides economic, financial, and business strategy consulting to leading law firms, corporations, and government agencies. The firm has more than 700 professionals, with offices in Boston, Chicago, Dallas, Denver, Los Angeles, Menlo Park, New York, San Francisco, Washington, D.C., Montreal, and Beijing. http://www.analysisgroup.com
Analysis Group’s energy and environment practice area is distinguished by expertise in economics, finance, market analysis, regulatory issues, and public policy, as well as significant experience in environmental economics and energy infrastructure development. The practice has worked for a wide variety of clients including (among others) energy producers, suppliers and consumers; utilities; regulatory commissions and other public agencies; tribal governments; regional transmission organization and other power system operators; foundations; financial institutions; and start-ups.
About the Analysis Group Report Authors
Sue Tierney was previously the Executive Director of the Massachusetts Energy Facility Siting Council, as well as a commissioner at the Department of Public Utilities and the Secretary of Environmental Affairs in Massachusetts. She also served as the Assistant Secretary for Policy at the U.S. Department of Energy. She is currently a Senior Advisor at Analysis Group.
Pavel Darling is a Manager at Analysis Group. He has worked on a wide variety of energy-related matters while consulting on behalf of utilities, state and regional organizations, and global companies, and has testified and supported testimony before state energy siting boards