Friday, March 10, 2017

Northern Pass - Dead or Alive?

Northern Pass: Hydro-Quebec Now Unwilling To Pay For Line In U.S.

HQ Says Relationship With NP Still Strong, Others Say Project As Proposed Likely Dead

Robert Blechl

March 10, 2017
Caledonian Record

After reports in the Quebec press Wednesday about Hydro-Quebec abandoning Northern Pass, the Canadian company responded Thursday to say it has no intention of pulling out of its relationship with Eversource Energy, its American partner.

One thing that has changed, however, and significantly, is that HQ is no longer willing to pay for the NP line in the United States and wants Massachusetts rate payers to pick up the tab.

That announcement, confirmed by Hydro-Quebec, is a break from the 2011 Transmission Service Agreement between HQ and NP parent company, Eversource Energy, that states HQ would reimburse Eversource for all development costs of the now-estimated $1.6 billion NP transmission line.

That change, in short, means HQ is unwilling to assume all the risk of the project and it now calls into question if it makes economic sense for either partner to proceed with the project as it’s currently proposed.

“Facts on the ground have changed,” said Bob Baker member of the North Country-based Responsible Energy Action LLC, a citizens’ education, advocacy and action group focused on N.H. energy policy.

“The transmission line now costs at least half a billion more than originally planned,” he said. “The capacity of the line has been reduced by 20 percent. The wholesale market price of electricity in New England is lower than its been in 13 years. So the original deal no longer makes sense. It is dead. If there is a new deal, it is slowly being revealed by reading between the inconsistent lines published by HQ and Eversource on their respective sides of the border. HQ is no longer willing to take on the risk of loss.”

HQ’s announcement came after a Wednesday story in Le Journal de Quebec stating HQ would be paying for the line in the U.S.

In a press release Thursday, HQ said “it has no intention to abandon the project” and “wishes to reiterate the position we shared with numerous Quebec media on Wednesday: Hydro-Quebec will not pay for the line in the U.S. [and] Hydro-Quebec will make sure this project is profitable for Quebecers.”

HQ said it now intends to submit the project to the request for proposals that Massachusetts will soon be issuing.

It is unclear, however, if HQ and Eversource N.H. have a renewed Transmission Service Agreement filed with the Federal Energy Regulatory Commission.

In December 2013, Eversource requested an amendment to its 2011 TSA with HQ, noting delays in the project and stating, “The parties have agreed to replace the term ‘third anniversary’ with the term ‘approval deadline,’ which is defined to mean Feb. 14, 2017, or such other date to which the parties shall mutually agree in writing.”

Spokespersons at FERC said that to date there is no signed and renewed TSA between Eversource and HQ on file.

On Thursday, Eversource spokespersons Martin Murray and Kaitlyn Woods declined to say if Eversource has a renewed TSA with HQ, what the terms of it are, and if it plans to present it to investors to assure them HQ will remain committed and Northern Pass as proposed is moving forward.

Baker said just like the first TSA amendment proposed in December 2013, the parties would want to file it 60 days beforehand to get a FERC approval by February. That hasn’t happened.

In the 2011 TSA, Eversource didn’t take any real risk and the risk was mostly on HQ, said Baker.

“This is how it’s changed,” he said. “HQ now says we will only build NP if the rate payers in New England, and especially in Massachusetts, pay for the transmission line through a long-term contract where they agree to a high rate … They are not going to do the project unless they are guaranteed a payback … They don’t see the profit under the original model.”

Tuesday, December 27, 2016

Mostly Small NH Towns v. Big Utilities


North Country Towns Gear Up For N.H. Supreme Court Fight Against Big Utilities

Argue State Allowing Utilities To “Escape Taxation”

Case to be heard Jan. 5, 2017

Robert Blechl
Caledonian Record
Nov 26, 2016

Municipalities across the state, including many in the North Country, have filed argument briefs in their years-long tax abatement fight against two big utilities, a case now scheduled to be heard before the N.H. Supreme Court Jan. 5.

The municipalities argue the appraisals provided by Eversource Energy and the New Hampshire Electric Cooperative as well as by the New Hampshire Department of Revenue Administration in towns are unreliable, do not provide an opinion of the value of the actual assets in the individual towns, and the DRA’s “net book approach … allowed property to escape taxation.”

At stake for the two utilities are millions of dollars saved through significantly reduced property taxes, a potential boost to company profits.

At stake for small towns, which argue the utilities are trying to get out of paying their fair share of taxes, is a reduction in tax revenue that could put a strain on town services and increase the taxes of all other taxpayers.

In July 2015, the New Hampshire Board of Tax and Land Appeals ruled in favor of the towns, concluding the unit method of valuation sought by Eversource and NHEC - a method through which they seek to reduce their property taxes by one-half to two-thirds - does not represent the fair market value of the utility properties.

Eversource and NHEC promptly appealed to the New Hampshire Supreme Court.

Representatives for Eversource have equated higher property taxes with increased costs for ratepayers, but neither utility has provided a guarantee that rates would be reduced or stay the same if their property taxes were likewise reduced.

The New Hampshire Public Utilities Commission, which regulates utilities, is the entity that approves or denies a requested rate increase.

In its argument brief filed with the New Hampshire Supreme Court in September, Eversource argues it faces regulatory restraints on income and operations and that “dramatically inconsistent assessments, including assessments more than doubling in one year in one community,” compelled it to file the appeals.

Eversource also claims the DRA establishes the market value of utility property for the state utility tax and municipal assessments “vary widely” from the DRA’s valuations.

In an argument brief filed at the New Hampshire Supreme Court in early November, however, attorneys for the towns argue, “Over 50 years ago, this court recognized that using net book to value utility property is inherently unfair and impractical because, in part, it does not address the changes in the of the assets that occur over long periods of time.”

The towns also took aim at the DRA, the agency responsible for supervising assessments in the state, which they charge with providing appraisals with errors and allying with the two utilities at the expense of the towns they represent.

In its brief, the DRA argues the BTLA ruling jeopardizes the state’s equalization process, which it said relies on the allocated values from the DRA appraisals and puts at risk the local assessments in about one-third of all N.H. municipalities that use the DRA utility property appraisal values for local tax assessing.

If the BTLA ruling stands, the DRA argues, the utility property tax that the agency said last year generated nearly $43 million in revenue could be undermined.

What the agency did not say in its argument, however, is if utility property values in some towns are being unnecessarily under-assessed.

In many small towns, utility property makes up a large chunk of their tax base, which, if they lose the case, could erode by millions of dollars.

The municipalities also argue the DRA is not being transparent and is not allowing selectmen and the public to review the basis for the agency’s valuation for local tax purposes.

“Basically, the DRA is saying ‘trust us, we’ll get it right, and we are not going to allow anyone to check our work,” attorneys Jae Whitelaw, Christopher Boldt and Shawn Tanguay, representing the towns, wrote in their brief. “This effort at reassurance rings hollow.”

Stephan Hamilton, director of the DRA’s Municipal and Property Division, was contacted several times about the case, but declined to comment.

Some towns have been spending tens of thousands of dollars annually fighting the appeals that began in 2011 and have continued each year thereafter.

Eversource, the largest electric utility in New Hampshire, is suing about one-quarter of New Hampshire’s municipalities, most of them small towns and including Littleton, Bath, Haverhill, Lancaster, Dalton, Northumberland, Whitefield, Landaff, Stark, Stratford and Stewartstown.

In Littleton, Eversource is seeking to reduce its total assessment of about $22 million to $11 million.

In Lancaster, for the 2011 tax year, the company wants to cut its assessment from $7.38 million to $3 million.

NHEC’s tax abatement appeals, filed at both the BTLA and superior court, are against towns that include Bath, Colebrook, Haverhill, Landaff, Littleton, and Monroe.

Representing the two utilities at the Jan. 5 oral argument before the state’s high court will be attorney Margaret Nelson. Representing the DRA will be Assistant New Hampshire Attorney General Laura Lombardi. Representing the towns will be attorneys Boldt, Tanguay, and Walter Mitchell.

The case could have widespread ramifications on utility property appraisal in the future, beyond the two current utilities.

Since the appeals were filed, three more utilities also standing to gain through reduced property taxes have filed briefs in support of Eversource and the NHEC - Unitil Energy Systems, Northern Utilities, and Granite State Gas Transmission.

###

Towns named in the suits include: Andover, Bridgewater, Croydon, Danville, Durham, Dunbarton, Fremont, Littleton, New Hampton, Pembroke, Randolph, Sandwich, Sunapee, Bath, Bradford, Bristol, Landaff, Milan, Bennington, Chester, Dalton, Hampstead, Haverhill, Hinsdale, Hopkinton, Lancaster, Lincoln, Madison, Marlborough, Newport, Pelham, Raymond, Springfield, Stratford, Washington, Whitefield, Unity, Hinsdale, Plymouth, Antrim, East Kingston, Francestown, Gorham, Greenville, Henniker, New Ipswich, Northfield, South Hampton, Stark, Stewartstown, Stoddard, Warner, Wilmot, Nelson, Hollis, Northumberland, Colebrook, Monroe. (58)

Saturday, December 24, 2016

Steve Ellis: Town roads and Northern Pass's back door eminent domain



On December 20, 2016, 18 New Hampshire municipalities and others filed a petition asking the SEC to rule that Northern Pass does not have the legal right to use locally-maintained town roads without municipal permission. Project applicants have been proceeding without such municipal permission. The petition contains appendices with affidavits from property owners whom the Applicants paid in order to perform required geotechnical surveys on their private land next to town roads in Stewartstown. Following is a summary of the petition, with a link to the full text, news reports, and a letter by Steve Ellis, chair of the Pittsburg Select Board, asking other NH municipalities to support the petition at the SEC. This matter, Ellis notes, affects all NH towns and cities and is larger than the issue of Northern Pass per se.

(See the end of this post for the January 4, 2017 update.)

PETITION TO THE SEC FOR DECLARATORY RULIN

The Town of Bethlehem, Town of Bridgewater, Town of Bristol, Town of Clarksville, City of Concord, Town of Deerfield, Town of Easton, Town of Franconia, Town of Littleton, Town of New Hampton, Town of Northumberland, Town of Pembroke, Town of Pittsburg, Town of Plymouth, Town of Stewartstown, Town of Sugar Hill and Town of Whitefield, Town of Woodstock, the Ashland Water and Sewer Department, the Society for the Protection of New Hampshire Forests, and the Appalachian Mountain Club (the "Petitioners"), pursuant to New Hampshire Administrative Rule Site 203.01, respectfully petition the New Hampshire Site Evaluation Committee (the "SEC" or "Committee") to issue a declaratory ruling stating that, pursuant to RSA 231: 160 et seq, only municipalities have the authority to authorize or not authorize the erection, installation, or maintenance of electric power poles or structures or underground conduits or cable, or their respective attachments or appurtenances, on, across, or under locally maintained highways, regardless of whether the New Hampshire Department of Transportation (the "NHDOT"), the SEC, or other agencies have authority to permit or license other portions of any proposed facility.

Read the full petition to the SEC by 18 NH towns et al. here.

News reports:

"Northern Pass Looking to Avoid Town Permitting?," by Donna Jordan.

"When It comes to Northern Pass, Who Controls the Roads?," by Nancy West.
Reprinted in the Berlin Daily Sun, Conway Daily Sun, and Union Leader.

"Towns Use 'Home Rule' Strategy in Northern Pass Fight," by Robert Blechl.
Reprinted in Union Leader.

"NH Towns Assert Authority over Local Roads Regarding Northern Pass," by Jack Savage.

"18 NH Towns Seek More Local Control over Northern Pass Siting," AP report.

"SEC to Review Petition on Northern Pass Road Use," by Donna Jordan (1/2/2017).


Steve Ellis's letter to NH municipalities

December 20, 2016

TO: New Hampshire Boards of Selectmen
New Hampshire City Mayors and Governing Boards
New Hampshire Town Councils

FROM: Steve Ellis, Chair, Town of Pittsburg, Board of Selectmen

SUBJECT: Local Control of Municipal Roads

I write on behalf of the Boards of Selectmen in Pittsburg, Clarksville and Stewartstown, to share with you a concern we have about the legal control of municipal roads and how the established principle of home rule applies to the continued ability of municipalities to retain control over municipal roads. I also write to ask you to consider writing a letter to defend the principle of home rule as it relates to municipal roads.

Our concern arises over a claim by the region's largest electric utility (Eversource) that they have the right to appropriate municipal transportation rights of way without any consultation or approval from the municipal governing authority to build a high voltage electric transmission line within the right of way. In fact, RSA 231:161 clearly provides that municipal governing bodies have the exclusive authority to permit and license such uses of municipally owned rights of way. Eversource, the developer of the Northern Pass project, claims that the New Hampshire Site Evaluation Committee has the power to preempt this statute. Nothing in the statute authorizing the Site Evaluation Committee (RSA 162-H) sets aside the statutory provisions in RSA 231: 161. Eversource lamely argues that a prior Supreme Court case with an entirely different set of facts supports their claim. An excerpt from the Northern Pass application to the SEC making this claim [follows, below].

Follow this link to the Supreme Court decision cited by Northern Pass: https://www.courtlistener.com/opinion/2111618/public-servco-v-town-of-hampton/

 Our three towns have joined with a number of other intervenors in the Northern Pass docket at the SEC to ask the SEC to initiate a new docket to specifically address this dispute. Under SEC rules, any party can file a request for a declaratory ruling for the purpose of addressing matters within the SEC's jurisdiction. A copy of our filing made December 19 is [here] for your review.

Whether one is for, against or agnostic on the issue of Northern Pass, it is the height of arrogance (not to mention against the law) for a large domestic utility partnering with a large foreign utility to commandeer for their exclusive financial benefit a municipal transportation corridor without the acquiescence of the municipality. In the six years since Northern Pass was first announced, project developers have never formally or informally asked our towns' permission to use town roads for their project. Their application to the SEC has a single blank license form for the locations within our three towns where they propose to bury their facility along more than 8 miles of municipally maintained roads. The Legislature has precluded Northern Pass from having access to eminent domain for the purpose of condemning private property for their project. However, RSA 231: 167 provides that if a landowner has suffered damage as a result of the installation, the landowner may apply to the Selectmen to assess damages in the same manner as laying out a new road. In other words, the Town would be liable for the taking and responsible for paying the damages assessed, not Northern Pass. Northern Pass is thus shifting the burden of eminent domain - a power it does not possess - to the Towns, while arguing that the towns have no say in the matter.

This back-door condemnation of municipal roads must not be allowed to stand. I ask you to consider writing a letter to the SEC in support of our petition, opposing the Eversource attempt to secure through the back door what they cannot achieve through the front door. Please direct your comments to: Ms. Pamela Monroe, Administrator, NH Site Evaluation Committee, 21 Fruit Street, Concord, NH 03301. Or e-mail your comments to Pamela.Monroe@sec.nh.gov.

 Thank you for your consideration of this request.


---------------------


FROM PAGE 82-83 of NORTHERN PASS SEC APPLICATION,
Submitted October 19, 2015

(D) Crossing Local Highways
NPT seeks permission to install the Project, including conduit, cable, wires, poles, structures and devices across, over, under and along certain locally-maintained highways, including 71 aerial crossings and four underground roadway installation sections. The underground sections are identified by town and roadway. The SEC has exclusive authority to grant permission to an energy facility to utilize locally-maintained highways. In Public Service Company of New Hampshire v. Town of Hampton, 120 N.H. 68 (Jan. 31, 1980), the Court pointed out that the “declared purposed of RSA ch. 162-F [forerunner to RSA ch. 162-H] is to provide a resolution, in an ‘integrated fashion,’ of all issues involving the routing of transmission lines.” The Court found that the Town of Hampton could not regulate transmission lines associated with the Seabrook Nuclear Station, noting that the SEC protects the public health and safety of towns with respect to transmission lines covered by the siting statute. NPT has filed a request with the NHDOT to cross state-maintained highways and has included that request with the Application as required by RSA 162-H:7 and Site 301.03 (d). See Appendix 9.

RSA 162-H:16, IV provides that the SEC must find, among other things, that issuance of
a certificate of site and facility will not have an unreasonable adverse effect on public health and
safety. Utilities of all varieties, including power lines, have long been recognized as appropriate
users of public highways, so long as the facilities do not conflict with the general public’s
superior use. E.g., McCaffrey v. Concord Electric Co., 80 N.H. 45, 46-47 (1921). In King v.
Town of Lyme, 126 N.H. 279, 284 (1985), the Court affirmed that a utility’s use of a highway
easement is appropriate since New Hampshire has never considered highway purposes to be
limited to the transportation of movable vehicles, persons or property.  The authority to erect electric transmission lines and underground cables in state and local highways is codified at RSA 231:160. The standard for locating poles, lines, and underground cables is set forth at RSA 231:168, which states that the lines “will not interfere with the safe, free and convenient use for public travel of the highway.” To further that process, the NHDOT has adopted certain standards, which are set forth in its Utility Accommodation Manual (“UAM”), dated February 24, 2010. This filing constitutes notice of these proposed crossings, associated pole placements and locations in accordance with the procedures set forth in the UAM Appendix G-3.1-2.

The New Hampshire Supreme Court has made it clear that the authority to license placement of power lines, poles and underground conduit within highways is regulatory in character and must be exercised in a non-exclusionary and reasonable manner. In Rye v. Public Service Company of New Hampshire, 130 N.H. 365 (1988), the Court found that a crossing application may be denied only for a public safety-based reason.

NPT seeks approval from the SEC to install its Project within, along, over, under and
across locally-maintained highways. This request mirrors the approach followed, and the
standards applied, in the request made to NHDOT for state-maintained highways. With respect
to the underground highway installation sections in the towns of Clarksville and Stewartstown,
NPT proposes that the SEC apply the NHDOT Standard Specifications for Road and Bridge
Construction and the provisions, instructions, and regulations set forth in the NHDOT’s standard
Excavation Permit. Furthermore, NPT proposes that the SEC condition approval of a certificate,
to the extent necessary, on compliance with such standards. Accordingly, Project plans for aerial
crossings and underground sections within highways are provided at the 30% design level, which
is the commonly accepted level of detail for initial permit applications and consistent with

NHDOT practice. See Appendix 9 and 10.


###

January 4, 2017 Update

The SEC has opened a new docket (2016-03) on the petition here.

Anyone may enter a public comment on the petition; it will be posted in the "comments" section of this docket.

Make reference to "Docket 2016-03" in your comment and include your residential address.

Email your comment to the SEC Administrator, Ms. Pamela Monroe, at pamela.monroe@sec.nh.gov.

The SEC will hold a meeting on January 12, 2017, starting at 11:00 AM, to discuss plans for proceeding on this docket. The location for the meeting is the PUC, Fruit Street, Concord.