One energy company behind the proposed New England Clean Energy Connect transmission corridor through western Maine is attempting to sweeten the deal for voters by selling discounted power to Maine and accelerating the payment of a $170 million incentive package.
The financial commitment from NECEC partner Hydro-Quebec offers a significant boost to the originally negotiated incentive deal valued at $50 million, which was renegotiated to $258 million in 2019.
The latest offer – which includes selling 500,000 megawatt-hours annually to Maine and accelerating payment on $170 million of the incentives – comes at a pivotal time, just four months before voters weigh in on a referendum question asking state utility regulators to reverse their prior approval of the 145-mile hydroelectric power project.
Benefits already negotiated in 2019 that would be accelerated include $140 million in cash relief for Maine ratepayers, $10 million for broadband expansion, $10 million for electric vehicle charging stations and $10 million for high-efficiency heat pumps, according to a media campaign coordinated by Gov. Janet Mills’ office. Other benefits being promised include youth scholarships and grid enhancement for other renewable energy projects.
In a March 6 letter from Mills to Hydro-Quebec CEO Eric Martel, which Mills’ office shared with the Portland Press Herald, the governor noted that many Mainers have criticized the project because all the power to be delivered through the NECEC line from Canada to Lewiston was to go to energy customers in Massachusetts, who would also pay for the $1 billion project.
Mills suggested to Martel that Hydro-Quebec sell excess power to Maine consumers, but “only if the excess power is of significance and if it were made available to Maine communities over a substantial period of time and at a rate that is advantageous to Maine ratepayers.”
Under the resulting arrangement, the Canadian hydroelectric power company has agreed to sell 500,000 megawatt-hours of excess power to Maine annually for at least 20 years at a discount of $4 per megawatt-hour. According to the governor’s office, 500,000 megawatt-hours is enough energy to power roughly 70,000 homes or 10,000 businesses in Maine.
“I have heard people say that the NECEC will deliver power directly to Massachusetts but not to Maine,” the governor said in a news release issued Friday touting the agreement. “With this new commitment, we ensure that Maine consumers access power directly from the line at a discounted price.”
The news release from Mills’ office includes comments from a variety of state leaders voicing support for the NECEC project, including International Brotherhood of Electrical Workers Local 104 Assistant Business Manager Tim Burgess, Conservation Law Foundation Senior Attorney Emily Green, Maine Public Advocate Barry Hobbins and Maine State Chamber of Commerce President and CEO Dana Connors.
According to the U.S. Energy Information Administration, Mainers paid an average of about 13.4 cents per kilowatt-hour, or $134 per megawatt-hour, for electricity in 2018, the most recent year available. A $4-per-megawatt discount would be a break of about 3 percent on the average retail price in Maine.
It’s unclear how much of an impact the discounted energy would have on lowering Maine energy customers’ monthly bills. The state’s annual consumption of electric power is roughly 12 terawatt-hours per year, about 24 times the amount of discounted energy being offered.
Energy generation comprises only half of a Maine energy customer’s bill, with the other half being for energy distribution.
Sophie Brochu, Hydro-Quebec’s current president and chief executive, said in a phone interview Friday that the economic benefits for ratepayers would go beyond the discount her company is offering for its power. Because the deal would put more discounted electricity on the market, Brochu said, it would help keep down overall prices.
“It’s a lot of money on the table,” said Brochu.
And, she said, Maine also will benefit from having another source of electricity coming into the state. If some problem develops with feeding electricity into the New England grid from elsewhere, Brochu said, the line from Canada would provide another source of energy for homes and businesses in the region.
“It’s a two-way benefit,” Brochu said.
But critics of the corridor project dismissed the deal with Hydro-Quebec as window dressing, designed only to boost backing for the project ahead of the November referendum.
“It’s a lot of to-do about a package that doesn’t do a lot,” said Sue Ely, clean energy attorney for the Natural Resources Council of Maine, a leading opponent of the planned power line.
She said the discount for Maine consumers would be wiped out by recent rate hikes for delivering electricity by Central Maine Power Co., which would build the $1 billion transmission corridor from the Canadian border to a New England power grid junction in Lewiston.
It’s “a little bit disappointing” that the state couldn’t negotiate larger concessions from Hydro-Quebec, Ely said.
The resources council also issued a statement calling the deal “a public relations gimmick that offers nothing meaningful for Maine people.” With both Hydro-Quebec and CMP standing to make billions off the deal for the energy corridor, the group said, “these crumbs for Mainers are insulting, especially given the irreparable harm this project would cause to western Maine.”
The organization said its calculations show that a typical ratepayer would save 12 cents on a bill of $100 with the discounted price.
That message of insignificant savings was echoed by No CMP Corridor, a political action committee that opposes the project and is pushing for the referendum to block it.
“Under this deal, Mainers still get pennies while two foreign companies make billions,” said group spokesman Tom Saviello. “Today’s announcement changes absolutely nothing; this was a bad deal when it was first reached and it remains a bad deal today.”
But Tony Buxton, a lawyer who represents industrial electricity users and supports the project, said any savings that also helps transition Maine to cleaner sources of electricity is a plus.
He said that in addition to some lower-cost electricity, the package of incentives is also aimed at changing Mainers’ energy use by encouraging people to switch from oil heat to more efficient and cleaner heat pumps. It’s easier to get people to change to cleaner sources of energy if they also will save money, Buxton said.
The commitment to accelerate benefits and sell discounted power is the latest in a string of concessions and benefits extracted from NECEC and its partners since the project was first proposed in 2017, following the rejection of Northern Pass, a similar proposed transmission line in New Hampshire.
Whether made voluntarily or mandated by regulators, each concession has attempted to either soften the project’s impact on the environment or on electric customers and win broader public acceptance. For example, the Maine Department of Environmental Protection ordered the proposed 150-foot-wide corridor buffering the new-development portion of the transmission line narrowed to 54 feet wide.
CMP contends the project would benefit Maine and the region by lowering carbon emissions, reducing fossil fuel usage and stabilizing electricity costs. But opponents say it would create environmental damage and hurt homegrown solar, wind and biomass projects in Maine.
If supported by voters in November, the referendum would order the Maine Public Utilities Commission to reverse its 2019 finding that NECEC is in the state’s best interests, with the goal of derailing the project.
A successful referendum to overturn the decision of an apolitical regulatory body would be unprecedented in Maine, and it is unclear whether such an outcome could withstand a legal challenge. Regardless of its legal standing, the question will be a strong indicator of whether Mainers feel that, all things considered, the project truly would benefit them and the state of Maine.
Staff Writer Tux Turkel contributed to this story.
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