Throwing up roadblocks to Quebec hydroelectricity

OFFSHORE WIND appears to be slowly getting back on track, but Massachusetts’ other big bet on clean energy – hydroelectricity from Quebec – is far from a sure thing.

A proposed transmission line carrying the hydropower down into New England is facing two potential roadblocks — a ballot challenge in Maine this fall and a looming deadline for a needed equipment upgrade at the Seabrook Station nuclear power plant in New Hampshire.

Both would-be roadblocks can be traced back to NextEra, a Florida-based energy company that believes the transmission line will be bad for its business. The company has spent millions financing signature-gathering for the Maine ballot question and, as the owner of Seabrook, appears to be slow-walking the upgrade.

The situation illustrates the risks of the high-stakes approach Massachusetts has taken to reducing its carbon emissions. The state has bet big on offshore wind and Quebec hydroelectricity, but in each case has encountered obstacles that are beyond its ability to control. Offshore wind was delayed for two years by federal inaction on the part of the Trump administration, and the importation of Quebec hydroelectricity is facing hurdles created in large part by a company likely to be squeezed financially by the Bay State’s freelancing on clean energy procurements.

Kathleen Theoharides, Gov. Charlie Baker’s secretary of energy and environmental affairs, is watching the situation nervously. The nearly $1 billion project to run an extension cord to Quebec is not only being financed by Massachusetts electric ratepayers, but it is also an integral part of the state’s bid to reach its greenhouse gas reduction goals, which became legally binding with passage of the climate change law in March.

“This project and the clean energy it will provide are very critical to reaching our 2030 goal and later the 2050 goal,” Theoharides said. She said the hydroelectricity that would flow over the transmission line would represent nearly a fifth of the state’s electricity load. In climate terms, the line is the equivalent of taking 413,000 cars off the road, all at the very reasonable cost of 5.9 cents per kilowatt hour, she said.

But bringing all that hydroelectricity into New England is likely to be very disruptive for the region’s existing electricity generators. For decades, regional wholesale electricity markets have functioned fairly smoothly, with generating plants competing to supply power at the lowest possible price. Electricity generated using natural gas slowly backed more expensive coal and oil plants out of the region, but renewable energy failed to make inroads into the market.

Massachusetts and other states, trying to reduce their carbon footprints, decided to procure clean energy on their own outside the wholesale market. Massachusetts has signed contracts with two offshore wind developers and another with Hydro-Quebec, which plans to deliver its power using a transmission line running from the Quebec border to Lewiston, Maine. The New England Clean Energy Connect transmission line is being built by Central Maine Power Co. and its corporate parent, Avangrid.

Once the transmission line starts operating, the expectation is that the imported electricity will displace power currently being supplied by the existing wholesale market, which will shrink in size and see price levels fall as supply outstrips demand.

NextEra is one of the nation’s leading energy companies. It owns Florida Power & Light Co. and is a major developer of wind and solar power projects. But it also owns the Seabrook nuclear power plant in New Hampshire and an oil-fired power plant in Yarmouth, Maine, both of which could be hurt financially by imports of hydroelectricity from Canada.

NextEra has taken a number of steps to block or slow down the transmission line. It filed court challenges in Massachusetts and Maine, which were unsuccessful. The company has also spent millions bankrolling referendum campaigns to block the project; the first referendum effort was derailed on constitutional grounds in 2020 and a second is slated to go before voters in the fall if it survives legal challenges.

Another point of leverage fell in NextEra’s lap. Matthew Kakley, a spokesman for ISO New England, the operator of the New England power grid, said an analysis of the transmission line carrying hydroelectricity from Canada concluded a circuit braker at Seabrook Station would need to be upgraded to accommodate the influx of electricity.

Kakley said it’s not unusual for the addition of power in one part of the grid to require an upgrade in another part. Typically, the company bringing in the new power is required to pay for the upgrades. “It’s up to the two parties to figure it out,” Kakley said. “In this case, the situation has obviously turned litigious.”

Both companies declined comment, but in filings before the Federal Energy Regulatory Commission it’s clear the two firms haven’t been able to agree on much. Avangrid accuses NextEra of slow-walking the upgrade to undermine the transmission project. NextEra says the upgrade is much more complicated and costly than Avangrid says.

Avangrid had hoped to have the upgrade completed this fall, but the prep time to meet that deadline has come and gone. The next best opportunity to do the work is the next time the nuclear power plant is shut down for regular maintenance in the spring of 2023, which is roughly the same time the transmission line is supposed to come online. Avangrid says the 2023 work at Seabrook can only be completed if planning starts now, which NextEra shows no signs of doing.

Looming over this food fight between two competitors is a broader policy issue – what would happen if the opening of the transmission line from Quebec knocks the Seabrook plant out of business? Nuclear is a very controversial form of energy production, but it is also one of the region’s major sources of carbon-free electricity.  Gaining hydroelectricity from Quebec but losing Seabrook would not help the region gain ground in meeting its greenhouse reduction targets.

Thorn Dickinson, president and CEO of New England Clean Energy Connect, said in an affidavit filed with the Federal Energy Regulatory Commission that NextEra executives reached out to him offering to “reduce NextEra’s opposition” to the transmission project if Avangrid would agree to buy roughly 28 percent of Seabrook’s power output for 15 years at an inflated price.

Dickinson wants no part of that sort of bargain. “If NextEra is allowed to continue to act unreasonably and in bad faith, the New England Clean Energy Connect project is unlikely to meet its targeted in-service date, which would be costly for Avangrid and New England Clean Energy Connect Transmission and bad for the environment, the state of Maine, and the Commonwealth of Massachusetts,” he said in his affidavit.