Maine utility: Our hydro project has lowest cost

Maine utility: Our hydro project has lowest cost

Claim is latest in very public battle over MA clean energy procurement

IN THE PUBLIC JOCKEYING for a multibillion-dollar clean energy contract with Massachusetts, Central Maine Power on Wednesday said its project would deliver the largest amount of hydroelectricity from Quebec at the lowest cost.

Sara Burns, president and CEO of Central Maine Power, said her company will deliver electricity from the Quebec border into the New England power grid at Lewiston, Maine, at a fixed price of $950 million, well below the $1.6 billion cost of each of its two main rivals – TDI-New England and Northern Pass.

The three companies all have partnered with Hydro-Quebec, which is supplying the electricity and delivering it to the Quebec border with New England. Hydro-Quebec has said it is supplying power to the three companies on the same terms.

Central Maine Power said its proposal for delivering the power to the New England power grid is cheaper because the electricity will be carried over regular, above-ground power lines along a corridor owned by the company. By contrast, the TDI-New England transmission line will run underground or under Lake Champlain and parts of the Eversource Northern Pass transmission line running through New Hampshire will also be buried underground.

Most state procurements are fairly low-key affairs: Companies submit bids and then nothing happens until a winner is announced. The Massachusetts clean energy procurement has been very different. Bidders submitted their proposals in July, and since then have either tried to generate positive publicity for their projects or disparaged rivals, apparently in the hope of influencing those judging the bids.

TDI-New England has plugged the fact that its project is fully permitted. Its backers have also privately raised concerns about public opposition to Northern Pass in New Hampshire and allegations that Eversource and Avangrid (which owns Central Maine Power) have been accused of driving up electricity prices in the region by tying up natural gas supplies needed by other power generators. The two companies have vehemently denied those allegations.

Eversource has claimed that its Northern Pass project will complete all project approvals this year and finish construction in 2020, a full two years ahead of TDI and Central Maine Power. “By being in service fully two years prior to Central Maine power or any other conceptual project, Northern Pass will deliver hundreds of millions of additional dollars in benefits to Massachusetts consumers and earlier progress toward achieving clean energy goals,” said Martin Murray, an Eversource spokesman.

National Grid, in partnership with Citizens Energy, has two bids, one that would import wind power from Quebec and another that would supply a combination of wind, solar, and hydro power from New York. National Grid has attacked the three projects tied to Hydro-Quebec, saying the hydro-electricity isn’t new power and won’t help reduce greenhouse gases. Grid has even enlisted New Hampshire lawmakers to help make its case to Massachusetts political leaders.

Deepwater Wind, a surprise bidder on the clean energy procurement given that Massachusetts is preparing another procurement specifically for offshore wind, has repeatedly trumpeted the advantages of its project, specifically its competitive but undisclosed price, the jobs it will generate in Massachusetts, and the fact that its electricity will feed into the power grid where it is needed the most – in southern Massachusetts.

All of the companies vying in the clean energy procurement say their public comments are designed to deliver a message to Massachusetts officials as they review the submissions. Burns, of Central Maine Power, made clear that she is speaking out now to highlight the project’s support in Maine and its relative low cost. “We think this is our competitive advantage,” she said.

Meet the Author

Bruce Mohl

Editor, CommonWealth

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

The winning bid is expected to be announced in January. The selection process is being run by the state Department of Energy Resources along with officials from Eversource and National Grid, even though separate arms of the two utilities have submitted bids themselves.

Judith Judson, the commissioner of the Department of Energy Resources, said on Wednesday that her staff is focused just on the bids and ignoring all of the company statements and press releases. “They are not influencing our decision,” she said.

  • NortheasternEE

    The Massachusetts “clean energy” mandate is forcing the early retirement of coal(Salem & Brayton) and nuclear (Pilgrim) power plants these will be replaced with quick reacting flexible power plants running on natural gas (Sandwich Canal) for a net zero increase in “Clean Energy”.

    Hydro from Quebec is just another variable power source, added to wind and solar, that will need more natural gas for balance. Closing down local power plants with stored local fuel to be replaced with power whose fuel has to arrive just in time from Pennsylvania and Canada, will result in more blackouts, higher rates, and no progress against the effects of Global Warming.

    • Andrew

      Pilgrim is closing because they don’t want to pay for upgrades. Do you want to pay for them? Nuclear is too expensive without massive government subsidies. I lived in Salem during the plant years and when it closed it was sooo much nicer. The thing was a mess. I’d put money on it you would not want it in your town. Gas is cheap and that is the way the markets are going.

      I don’t know why you think of hydro as variable power. It’s usually pretty steady. Depending on the plant you can bring more generators on line and there have been improvements in varying the output of hydro.

      In closing why would you want to stick with coal if there was a cleaner alternative? Is coal the cheapest? Yes, but the margin is shrinking. And coal is dirty. Technology is getting better with making the grid more dynamic and it shows. We have not had any rolling blackouts or brownouts and as you said in an earlier post we are past the peak in our electric usage.

      • NortheasternEE

        Pilgrim is closing because “clean energy” mandates need more natural gas backup firming to function.

        Quebec hydro is looking to offload power when demand is low. The fluctuation of Quebec power demand is what makes it variable. We are going to get the leftovers.

        If coal and nuclear were closing because natural gas is cheaper, our rates would be going down. Instead we are on an ever increasing slope, some 25% since 2012.

        • Andrew

          So Entegy lied when they said they were closing it due to the cost upgrades? OK, someone has fed you the Scott Pruitt~Rick Scott sundae. Your grand “clean energy” conspiracy seems a little too much. Rates aren’t going down because they never will. It’s naivete to think the power companies would ask for a drastic rate reduction. They will just use any difference for upgrades or what not Or possibly more profit and bonuses??

          • NortheasternEE

            Here is what they actually said:

            “Citing reduced revenues and higher operating costs, Plymouth’s troubled nuclear power plant to close before mid-2019”

            The reduced revenue is due to the destruction of the baseload market by renewable energy mandates that need flexible and dirty natural gas to exist.

            Even though for years we were told that offshore wind will lower rates because the wind is free (no fuel cost), I would be happy if rates did not skyrocket.

          • Andrew

            The reason revenue is lower = lower rates and yes increased competition (some mandated, but most due to cheap gas). But mainly operating costs are sky high for nuclear and insurance is unobtainable (without gov’t mandate).

        • casmatt99

          You seem to always fall back on the same assertion, that rates are being driven higher because of the mandate for clean energy, yet prices steadily increased before the mandate existed – do you deny that? Coal and nuclear are being closed because nuclear energy has been unfairly demonized in the US since Three Mile Island, and coal plants are too polluting to justify their continued operation. Natural gas prices have jumped around in recent years, but is still priced competitively. By your logic, the only thing driving costs up is the greed of utilities like National Grid and Eversource. If so, what’s the downside of creating a diversified energy portfolio that includes wind and solar?

          • NortheasternEE

            In the absence of grid scale seasonal energy storage, which does not exist, a diversified energy portfolio that includes wind and solar (with mandates for 30%,50%,80%, or 100%) depends primarily on natural gas piped, in just in time, from Pennsylvania for grid resiliency. Variable and intermittent power from wind and solar can only be dispatched with backup firming from natural gas peaker power plants.

            The problem is that the system far from being diversified, it becomes hostage to a single fuel for cost and performance.

  • macmac166

    Massachusetts holds a lot of the cards when it comes to the makeup of the electrical generation market in New England, with far reaching impacts. We, in Maine, can attest to that. Most wind projects installed in Maine were developed from money guaranteed by power purchase agreements with Southern New England Utilities. Power purchase agreements that have added considerable costs to electricity bought by customers of these utilities.
    Before even one wind turbine went up on Maine Mountains, we had all the in-state electrical generation capacity needed to serve the state. And if everyone of the turbines standing in Maine were to be taken down, the state would still have all the power it needs and more.
    Maine lawmakers, like Massachusetts lawmakers emotionally embraced wind and according to a recent NextEra statement : “On May 8, 2007, the Task Force on Wind Power Development in Maine (the “Task Force”) was established. The Task Force was charged with identifying policy changes that could help achieve three underlying objectives: a) Make Maine a leader in wind power development; b) protect Maine’s quality of place and natural resources; and c) maximize the tangible benefits Maine people receive from wind power development. The Task Force membership included legislators, state employees, nongovernmental organizations, and representative of the wind power industry. The recommendations of the Task Force were accepted by all members and subsequently enacted into law pursuant to 2007 Public Law, Chapter 661 (the “Wind Power Act”). ”
    Some facts worth disclosure: The DEP, which is Maine’s primary siting agency for wind projects has not approved a wind project since September 8, 2014. The Department has no wind projects currently under review. All wind projects are in the development stage in Maine and won’t be moving into the DEP permitting stage without acceptance of their bids offered to the Massachusetts Clean Energy(MCE) RFP.
    To the people of Massachusetts, Maine residents are taken back by the thought of multitudes of wind turbines compromising the State’s landscape for energy laws enacted beyond their control. But what the people in Massachusetts should really consider is the costs they pay for Maine Wind. It’s exorbitant and one of the reasons the previous request for renewable energy contracts from MCE shunned Maine Wind.