Action late Tuesday by the Maine Department of Environmental Protection to suspend the New England Clean Energy Connect’s construction license places the project’s future in court, with a critical hurdle pending for Dec. 15.

That’s when NECEC Transmission LLC and Avangrid Networks, of which Central Maine Power is a part, will ask a judge in Maine’s Business and Consumer Court for a preliminary injunction, a request to keep a law passed by voters this month from taking effect on Dec. 19. The business court is a branch of Maine Superior Court that litigates business disputes.

According to court filings, Avangrid will argue that the citizen’s initiative aimed at killing the project, known as Question 1, is unlawful. Among other things, it will say that the initiative deprives the company of its “vested rights,” which means it had valid permits to start construction in good faith.

Earlier this month, voters approved by a 60-40 margin the referendum that bans construction of high-voltage power lines in the Upper Kennebec region and requires the Maine Legislature to approve any similar projects statewide retroactively to 2020. It also requires the Legislature, retroactive to 2014, to approve any such projects that use public land by a two-thirds majority.

NECEC already has cleared more than 124 miles of right-of-way, erected more than 120 structures and spent more than $450 million – nearly half its estimated $1 billion cost.

“The critical issue in this case is going to be the argument about vested rights,” Jamie Kilbreth, a lawyer representing project opponents and a former deputy attorney general, said on Wednesday.

Opponents, Kilbreth said, will counter that Avangrid knew the validity of its DEP license was in dispute because of an ongoing review of a lease across public lands, as well as longstanding appeals at the Board of Environmental Protection, which now are set to be heard in early 2022. The company also was well aware of the Nov. 2 referendum, having spent millions of dollars fighting it.

“They had a permit for construction,” Kilbreth said, “but they went ahead at their own risk.”

INJUNCTION RULING SOON

A decision on the preliminary injunction is expected before year’s end. If the judge declines to grant it, NECEC is expected to appeal to the Maine Supreme Judicial Court and ask for an expedited hearing.

If NECEC is successful, however, opponents would similarly ask the Law Court to hear the case as soon as possible.

It’s not easy to win an injunction, in the view of Tony Buxton, an attorney representing the Industrial Energy Consumer Group. The trade organization is an intervenor in the DEP case and supports the power line.

“But I think NECEC made a compelling case,” Buxton said. “The harm is very substantial in stopping the project. There’s no precedent in stopping a project so far along with so many permits.”

NECEC announced on Nov. 19 that it had voluntarily stopped construction and said the pause would stay in place until the injunction was decided.

To satisfy contracts with Massachusetts utilities, NECEC is under intense pressure to complete the project by August 2024. The project already is behind schedule and faces millions of dollars in penalties for more delay, as well as the risk of the contract being terminated. Last winter, after receiving what it considered a final permit, the company made a calculated decision to move ahead while legal and regulatory challenges play out.

Avangrid, CMP and NECEC Transmission are all U.S. subsidiaries of Spanish energy company Iberdrola.

The NECEC project is designed to bring 1,200 megawatts of power from Canadian hydroelectric producer Hydro-Quebec to the New England electric grid through a converter station in Lewiston. The project is being built to help Massachusetts meet its clean energy goals. It’s being paid for by that state’s electric customers.

The 145-mile route is on land owned or controlled by CMP, except for a one-mile patch through Maine public lands near The Forks. The DEP commissioner also has been considering whether to suspend the project permit based on an improper lease issued to cross that one-mile stretch.

The DEP was faced with deciding whether the newly passed law constituted a “change in situation or circumstance” that would compel the commission to suspend or revoke a license. In Tuesday’s ruling, DEP Commissioner Melanie Loyzim said that condition had been met, and that all construction work is to stop unless or until a court grants the injunction request and allows work to continue.

Until then, Loyzim said she was deferring a decision about a legal challenge to a lease across a one-mile stretch of public lands.

“Should the suspension ordered in the present decision end, I will promptly and directly address the issues presented by (the public lands case),” Loyzim wrote in Tuesday’s order.

‘CONSTRUCTION MUST STOP’

Loyzim’s Tuesday ruling settles, at least temporarily, a controversy over NECEC’s decision to continue work on the $1 billion transmission corridor following the Nov. 2 vote. The next day, NECEC officials filed a suit challenging the referendum’s constitutionality, saying it would continue construction work while that challenge was pending.

But critics cried foul and said the move was a direct challenge to the will of the voters. NECEC eventually suspended construction voluntarily last Friday, hours after Gov. Janet Mills publicly asked the project to do so.

On Wednesday, NECEC’s parent company released the letter it sent to Mills notifying her that it was halting construction, as well as payments it agreed to make as part of the project. Avangrid Networks had promised the state roughly $250 million in benefits to win Mills’ support for the project.

The DEP has been under mounting pressure for months from project opponents to suspend the license it issued for the project and shut down construction while the legal and regulatory challenges play out.

The agency held a hearing Monday to weigh whether to suspend NECEC’s permit to build the transmission corridor that is designed to carry electricity generated by hydroelectric generators in Canada to the New England transmission grid hub in Lewiston.

At the hearing, opponents of the project said that the pending law adopted by voters should be assumed to be constitutional unless and until a court decides otherwise. But the developer noted that the law won’t legally take effect until Dec. 19, and the voluntary suspension meant the DEP wouldn’t need to act until the court rules on NECEC’s request for a preliminary injunction to keep the law from going into force.

But Loyzim’s ruling suggests there was almost no way for her to not suspend the license to build the project.

“To not suspend the license would allow: continued construction in the region where such construction will shortly be banned; continued construction of other Project segments without a reasonable expectation that those segments will ever be part of an alternative route and energized to fulfill the original purpose of the Project; and construction of a type of project that shortly will not be authorized for lack of having received 2/3 approval of both houses of the Legislature,” she wrote.

Loyzim also said NECEC’s voluntary suspension of work isn’t legally binding or enforceable by the DEP, and so her department couldn’t depend on it.

“So long as the License is suspended, all construction must stop,” she said, although her order allows NECEC to “stabilize” the sites where it has been working and to finish work that would otherwise pose a safety hazard to workers or the public.

According to the order, NECEC has 30 days to stabilize all disturbed soil, spread wood chip piles to a thickness of no more than 2 inches, stabilize access roads and remove or spread already-cut vegetation.

Winter weather could complicate the task. Light snow is expected Friday, and daytime temperatures at or below freezing are forecast for next week.

ENERGY INDUSTRY WATCHING

In a reaction Tuesday evening, Thorn Dickinson, president and CEO of NECEC Transmission, said he was disappointed by Loyzim’s order and said he saw no need for the DEP to suspend the permit since the NECEC voluntarily chose to halt construction.

The developers “remain committed” to building the corridor and bringing in cleaner hydropower to New England, Dickinson said, and they will press their case arguing that the referendum is unconstitutional.

The NECEC saga is being followed nationally by energy interests and institutional investors, according to Tim Fox, vice president at ClearView Energy Partners, a Washington, D.C., research firm. He had prepared an update Monday for clients that contained this summary: “Notwithstanding NECEC’s efforts to keep the project alive, we continue to regard Question 1 as likely fatal for the transmission line.”

In an interview Wednesday, Fox said there’s a growing national trend for opponents of public policies or projects they don’t like to “pivot to the people” and seek to overturn them with popular votes.

“Getting permits no longer means the project has overcome all its hurdles,” Fox said, “and in fact can be at significant risk of being undone.”

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