8/13/23

by Lori Valigra

EXCERPTS

Work has resumed on the $1 billion hydropower project through western Maine, but it still is not clear who will pay for the up to $500 million in additional costs caused by legal and construction delays, causing some supporters to become impatient.

Public Advocate William Harwood expressed concern Friday about the construction delays and projected cost increases for the project that is being spearheaded by Central Maine Power’s parent company Avangrid and Hydro-Quebec. A court in April cleared the way to restart the controversial project, which has won several major legal challenges, but obstacles remain such as who will foot the bill for the additional cost.

“Unfortunately, we must continue our dependence on natural gas while we await the decisions of Avangrid, Hydro-Quebec, the Massachusetts utilities and Massachusetts public officials as to the timing of the completion of the project and the final price of electricity to be delivered into the New England market,” Harwood said.

But the contracts must be renegotiated to consider the added costs, and Massachusetts lawmakers need to approve that. Despite House and Senate lawmakers including provisions in their spending bills to allow changes, a slimmed-down budget passed recently without them.

That means the project has resumed without knowing if or how the additional costs will be covered. Avangrid and Hydro-Quebec were not immediately available for comment on Friday...............

..............“It may simply be common sense, which is that they’ve won their case and they would like to say they are restarting, but they’re deciding not to invest major dollars until they understand what’s going to happen next,” McCullough said.

Lawmakers in both branches of the Massachusetts Legislature said they believe the contract changes will eventually be approved, according to CommonWealth. The magazine quoted Rep. Jeffrey Roy, a Democrat who co-chairs the Legislature’s Telecommunications, Utilities, and Energy Committee, as saying the issue is going to be addressed. That could be through so-called informal sessions under which lawmakers continue to meet after technically adjourning there on July 31.

The ongoing hiccups for the project are concerning some of its backers. Harwood said his office has consistently supported the project because it has the potential to supply New England consumers with competitively priced electricity and help reduce Maine’s heavy dependence on natural gas for electricity. He urged the parties involved in the project to expedite it.

Massachusetts is committed to getting the language needed to revise the contracts so that the electric companies can recoup the extra costs from that state’s ratepayers, the Massachusetts Executive Office of Energy and Environmental Affairs said.

A spokesperson acknowledged it is an important step in completing construction and said the administration of Gov. Maura Healey is committed to working with the Legislature, project developers and utilities to assure the project is completed.

Read the full piece at:

https://www.bangordailynews.com/2023/08/13/business/massachusetts-n...

Beacon Hill inaction leaves Avangrid in awkward spot

Firm had been counting on adjustments to its transmission line contract

Bruce Mohl Aug 8, 2023

ON JULY 27, the CEO of Avangrid told financial analysts that his company was preparing to resume work on the Massachusetts-financed transmission line carrying hydroelectricity from Quebec into New England.

From his remarks, it was clear that Pedro Azagra green-lighted construction because of the willingness of House and Senate lawmakers in Massachusetts to support efforts to tweak the company’s contract with the state’s three utilities. Both branches had included provisions in spending bills that would allow state regulators to adjust the contract terms to offset rising costs caused by legal and regulatory delays associated with the project in Maine.

Azagra said the cost of the project had increased to $1.5 billion, up from earlier estimates of $1 billion. So, theoretically, the provision being considered in the Legislature could have been worth as much as $500 million to Avangrid.

But four days later the House and Senate passed a pared-down spending bill that left out the provision Avangrid had been counting on. It left the energy company in the awkward position of resuming construction on the project with no guarantees it would recover the money it was spending.
Several state lawmakers said they believe the provision will eventually be approved, but they were unable to say when. They also had no good explanation for why it failed to pass on July 31.

Avangrid declined comment.

The snafu is another example of how a Legislature dominated by Democrats often makes decisions that make little sense to outsiders.

New England Clean Energy Connect is a joint venture of Hydro-Quebec and Avangrid, with Hydro-Quebec supplying the hydroelectricity and Avangrid building the transmission line carrying the power from the Canadian border to Lewiston, Maine, where it would feed into the regional power grid.

The project is a key part of a bid by Massachusetts to reduce its reliance on fossil fuels and meet carbon emission goals. Construction of the transmission line halted in 2021, when voters in Maine passed a law retroactively shutting down the project.

Avangrid went to court to challenge the legality of the referendum and scored a series of legal victories, including a Supreme Judicial Court ruling in August 2022 declaring the voter-approved law unconstitutional. After other issues were resolved, the Maine Department of Environmental Protection said in May that Avangrid could resume construction, but by then the company had a contract for a $1 billion project that had ballooned in cost during the delay to $1.5 billion.

Continue reading at:

https://commonwealthmagazine.org/politics/beacon-hill-inaction-leav...