Five power companies Avangrid, Hydro-Qubec, NextEra Energy Resources, Calpine and Vistra have spent $96.3 million trying to convince Mainers how to vote next week on a ballot initiative that seeks to kill the New England Clean Energy Connect (NECEC) project, a power line designed to provide Massachusetts utilities with carbon-free electricity from Canada.
The outcome of the Nov. 2 vote will create winners and losers among those companies, while also potentially affecting the options New England states will have for cutting their carbon emissions.
The ballot initiative centers on the roughly $1 billion NECEC transmission project, which is designed to deliver 9.45 million MWh a year from Hydro-Qubec to utilities in Massachusetts. It's enough electricity to power about 1.2 million homes and would account for about 8% of the electricity used in New England, according to Oliver Kleinbub, director of energy services for ESAI Power, a consulting firm based in Wakefield, Massachusetts.
Besides killing the NECEC line, the measure would bring the Maine legislature into the transmission process by requiring a vote on "high-impact" power lines. Those are defined in the ballot question as power lines that are at least 50 miles long, are direct current lines or at least 345-kV, and not mainly being built for grid reliability. Transmission lines and pipelines that cross public land would need a two-thirds vote by both chambers of the legislature per the initiative.
Nearly $100 million to influence voters
The five companies have contributed $96.3 million through Oct. 22 to political action committees (PACs) trying to influence voters, according to the Maine Commission on Governmental Ethics and Election Practices, an agency overseeing campaign finance in the state. The contributions account for almost all the PAC expenditures, which are the most ever for a ballot initiative or referendum in Maine, according to Jonathan Wayne, the commission's executive director.
On one side, Avangrid and its affiliates, which are developing the NECEC project, have contributed $42 million and Hydro-Qubec has added $24.5 million to PACs trying to defeat the initiative, for a total of $66.5 million, according to the ethics commission.
On the other side, power plant owners NextEra ($20 million), Vistra ($2.2 million) and Calpine ($1.7 million) have contributed nearly $24 million to a PAC supporting the ballot measure.
The power line's winners and losers
The success of the NECEC line has financial implications for the energy companies fighting over the ballot measure.
Avangrid, a utility company based in Orange, Connecticut, views the NECEC project as a key investment, according to a September investor presentation. The investment would equal nearly 10% of the $10.9 billion ratebase of its eight Northeast utilities.
Although regulatory hurdles remain for the NECEC line, Avangrid has spent about $350 million on the project, which it plans to bring into service in 2023, according to the company's most recent quarterly filing with the Securities and Exchange Commission. If the line isn't built, Avangrid would likely have to write off at least some of its NECEC expenditures, Paul Patterson, an equity analyst with Glenrock Associates, said.
The NECEC line also benefits Hydro-Qubec, which stands to earn about $490 million a year in annual revenue by selling power to the Massachusetts utilities at a starting price of $51.51/MWh. The utilities will also pay a $9.16/kW monthly transmission fee that increases over the life of the 20-year contracts, which have been approved by Massachusetts regulators.
Last year, Hydro-Qubec exported 31.3 million MWh to neighboring areas, including the Northeast U.S., bringing in about US $130 million in income, according to the utility's latest annual report. The power sales to the Massachusetts utilities via the NECEC line will come from existing hydroelectric facilities.
Generators in New England, like NextEra, stand to lose income if the NECEC project comes online. In New England, NextEra owns 2,285 MW, Calpine has 2,028 MW and Vistra owns 3,361 MW. Combined, the companies own about a quarter of the generating capacity in ISO New England's (ISO-NE) markets.
The NECEC project will generally reduce energy and capacity prices in ISO-NE, ESAI Power's Kleinbub said.
"Reduced energy prices and capacity prices will mean a hit to any generator," he said.
Besides trying to defeat the ballot initiative, NextEra unsuccessfully tried to persuade the Massachusetts Supreme Judicial Court to reject the Hydro-Qubec contracts.
Also, in a complaint at the Federal Energy Regulatory Commission, Avangrid and its subsidiary NECEC Transmission contend NextEra is slow-walking a circuit breaker upgrade at the Seabrook nuclear plant in New Hampshire to block the transmission line. NextEra denies the allegations.
The fate of clean energy goals
Like most New England states, Maine has aggressive carbon reduction goals. Under state law, Maine intends to get 80% of its electricity from renewable resources by 2030 and to have only renewable energy by the middle of the century.
Maine needs to add about 850 MW of renewable energy by 2030 to meet its near-term goal, according to a report written for Maine Gov. Janet Mills', D, energy office. The main challenge in meeting the renewable energy goal is the need for new transmission lines, especially to deliver power from Maine's wind-rich western and northern regions, consulting firms Energy and Environmental Economics and The Applied Economics Clinic said in the report.
The need for new transmission lines could be even higher if Maine successfully electrifies and decarbonizes its transportation and building sectors, according to Competitive Energy Services (CES), a Portland, Maine-based company.
CES estimates Maine's electricity use would grow from about 12 million MWh annually and a 2,000 MW peak load to 40 million MWh annually with a peak load of almost 10,000 MW if it meets its decarbonization goals, the company said in a FERC filing earlier this month.
To meet its decarbonization goals, Maine will need roughly 5,000 MW of offshore wind, 2,000 MW of wind in northern Maine and up to 8,000 MW of solar, according to Richard Silkman, CES CEO.
"People don't fully appreciate the scale of converting to all electric," Silkman said. "We're going to need a lot of [transmission.]"
The ballot initiative's requirement for state legislative approval could make it harder for future transmission projects in Maine to move forward, according to Silkman.
"If there's a vehicle for stopping them, people will use it," Silkman said.
ESAI Power's Kleinbub agreed the required vote in the Maine Legislature would create another hurdle for transmission development.
But the ballot measure wouldn't prevent "reasonable" transmission projects from moving forward, according to Nick Bennett, staff scientist for the Natural Resources Council of Maine (NRCM), an environmental group that supports the initiative to stop the NECEC project.
In part, NRCM opposes the NECEC line because it delivers power from existing dams, and therefore wouldn't help reduce overall greenhouse gas emissions, Bennett said.
Bennett pointed to the passage of LD 1710, signed into law in June, as evidence that transmission projects that benefit the climate and Maine can clear the state legislature.
The law directs the Maine Public Utilities Commission (PUC) to issue a solicitation for a double-circuit, 345-kV transmission line to deliver new renewable energy from Aroostook County in northern Maine to the ISO-NE grid. The renewable energy would be sourced by a separate PUC request for proposals totaling at least 18% of the state's load in 2019. The proceeding is underway at the PUC.
"If you're talking about a reasonable project that's going to be additional renewable energy, that's going to help us meet our climate goals, the legislature would be supportive of that project," Bennett said.