Wednesday, February 3, 2016

"Uneconomic" argument has never made sense


Hydro Quebec’s finances belie claims that burying Northern Pass would be "uneconomic"

Editorial
Littleton Courier
February 3, 2016

 
Could there be a financial crisis at Hydro Quebec? The company experienced a drop in profit for the first nine months of 2015 compared to the same period in 2014. Rather than $2.545 billion, revenue minus expenses nosedived to $2.472 billion. Hopefully, Chief Executive Officer Eric Martel is not suffering a big decline in lifestyle because Hydro Quebec made $73 million less through September 2015 than the year before. After all, Martel and his business partner, Eversource Energy, need as much comfort and strength as possible to convince New Hampshire that burying all of Northern Pass is "uneconomic." That interesting word is the invariable refrain from supporters of Northern Pass when answering questions about why the entire 192 miles of electricity transmission line cannot be buried.
 
The "uneconomic" argument has never made sense. Hydro Quebec, which will pay the cost to build Northern Pass, is an incredibly wealthy entity. The company seems quite pleased with the third quarter 2015 results. After all, the $73 million reduction in profit compared to the year before is a drop in the bucket when you know your owner, the government of the province, will always have your back.
 
Residents heard many questions and answers from Northern Pass recently. Last month, another round of public hearings took place in the five counties where the power line would run. Residents have another shot, likely in March, when a quorum of the Site Evaluation Committee, the state entity that will determine the fate of Northern Pass, convenes in each of the five counties again. An ocean of orange shirts – the color of opposition to the project – will be vibrant once more, and the active citizens opposing Northern Pass will be prepared to deliver additional testimony.
 
The SEC hearings next month will likely provide some time for comedy, as well. Examples seen in Lincoln at the January hearing included a person handing Bill Quinlan, President of Eversource, an orange shirt. Or, when tireless Northern Pass opponent Nancy Martland of Sugar Hill compared the current proposal, which includes more than 130 miles of above ground lines, to a 1958 Edsel automobile. She then handed Quinlan a small but sleek red sports car toy to symbolize a fully buried power line.
 
No better argument can be made for why complete burial is "economic" than the riches that keep Hydro Quebec afloat. Any member of the SEC more sympathetic to a multi-billion dollar foreign entity than the demands of Granite Staters will have much explaining to do if a certificate to build Northern Pass does not require full burial. Clearly, the public interest demands it, and Hydro Quebec can afford to do so.
 
If Northern Pass ever gets built, Hydro Quebec will need to spend a lot of money on the construction phase. Asking a company to use about six months of profit to totally bury the line is not a ridiculous claim by mindless tree huggers in New Hampshire. It is the immensely reasonable plea of people who love the North Country and want to protect its glory as long as humans and creatures enjoy our forests and mountains. By taking that fact to heart, Northern Pass can truly prove it listens to people by finding enough money in a seemingly endless bag of treasure to completely bury the power

Friday, January 22, 2016

Northern Pass Avoids Profit Questions


1/22/2016

Whitefield: Northern Pass Avoids Profit Questions During Second SEC Hearing

Motions To Intervene Must Be Filed By Feb. 5

 
PHOTO BY ROBERT BLECHLNorthern Pass opponents Chelsea Petereit, left, and Mark McColluck, of North Stratford, wearing the opposition orange, applaud testimony calling on the state and company to bury the entire line.
+ click to enlarge
PHOTO BY ROBERT BLECHL
Northern Pass opponents Chelsea Petereit, left, and Mark McColluck, of North Stratford, wearing the opposition orange, applaud testimony calling on the state and company to bury the entire line.
PHOTO BY ROBERT BLECHLWhitefield musician Katie Rose performs her new anti-Northern Pass song, “Powers That Be,” during the NH SEC public hearing on Northern Pass Wednesday.
+ click to enlarge
PHOTO BY ROBERT BLECHL
Whitefield musician Katie Rose performs her new anti-Northern Pass song, “Powers That Be,” during the NH SEC public hearing on Northern Pass Wednesday.
By Robert Blechl,
Staff Writer
Caledonian Record
WHITEFIELD -- While Eversource executives continue to tell their shareholders a consensus is building around Northern Pass, a different story is playing out in the North Country, where opposition, after five years, remains just as fierce.

That opposition, turning out Wednesday for a N.H. Site Evaluation Committee information session at the Mountain View Grand, is pushing Eversource to state how much profit the company stands to gain through the transmission line they say would be subsidized through negative impacts to property values and the region's tourist industry.

Talk of profit is one thing Eversource, partner with Hydro-Quebec and parent company of Northern Pass, has shied away from, and Wednesday was no exception.

During a question-and-answer session, Eversource NH President Bill Quinlan said, "It's technically possible to bury the entire line," a statement that drew robust applause from opponents of overhead lines and towers.

But full burial would add about a billion dollars to the currently estimated $1.6 billion project and make it "uneconomical," he said.

"We, along with our partners, are not willing to go forward with a project that costs a billion more," he said.

Quinlan did not give a profit threshold below which Eversource will not go and declined to say if Hydro-Quebec will pay all or or most of the development costs in N.H. and how much the two companies would make in profit and revenue.


Documents and calculations, however, show billions of dollars to be made by both and also show that Hydro-Quebec would pay all development costs and expenses for Eversource, resulting in a $100 million first-year profit return for Eversource and at least a $2 billion return on equity, or guaranteed Eversource profit, during the 40-year term of the line.

According to a February 2011 order from the Federal Energy Regulatory Commission accepting the Transmission Service Agreement between both entities, Hydro-Quebec "will be responsible for providing approximately [$1.6 billion] in initial construction costs and return on such costs, necessary additional capital expenditures and return, and other expenses associated with the line over the 40-year operating term of the TSA."


Based on August 2015 megawatt hour prices, Hydro-Quebec stands to make at least $600 million a year, or $24 billion during the 40-year term of the line, according to calculations by Responsible Energy Action LLC.

"Northern Pass' single largest expense is Eversource's profit," Dalton resident and REAL member Jim Dannis said Thursday. "When Mr. Quinlan says it's unaffordable to bury the lines, you have to wonder why he won't cut his profit by just a bit to do what's right for New Hampshire. When it comes to the economics of the project, it's a black box. Eversource says its uneconomical, but won't tell you why."

In the FERC order, Northern Pass is called a "cost-based transmission project where the risk of the project has been shifted to [Hydro-Quebec], the customer, as opposed to a merchant transmission project where the transmission developer [Eversource] assumes the risk."

As structured, the TSA "ensures that the cost of the NPT line will be fully recovered by Northern Pass from [Hydro-Quebec] over the term of the TSA."
Since the project went public more than five years ago, Hydro-Quebec has refused to comment on concerns by New Hampshire residents and has not said why full burial is not an option.

In New Hampshire, SEC, a statewide planning board for energy projects, is the agency that would grant the required certificate of site and facility for the line that is designed to import hydro-power from Quebec to the market in southern New England.

If approved, the 1,090-megawatt 192-mile line with steel towers at least 85 feet high would stretch from Pittsburg to Deerfield.


To date, a total of 60 miles would be buried, including about 8 miles of line in Clarksville and Stewartstown and 52 miles in and around the White Mountain National Forest from Bethlehem to Bridgewater.

Through its Forward NH plan, announced in August and including a $200 million economic development fund, lower energy costs and other benefits, Quinlan said Northern Pass would equate to $3.8 billion in economic benefits to the state.

When asked what the $80 million in projected cost savings means for N.H. ratepayers, Quinlan said roughly $5 on a monthly $100 utility bill.


Referring to the company's stated economic benefits, Colles Stowell, who owns property in Lancaster, struck a chord in the room when he said, "Take your $4 billion Forward NH plan and bury the line and the opposition will disappear."


Few Supporters

 
More than 200 residents turned out for Wednesday's session, most in opposition.
Drawing applause during the comment period was Sugar Hill resident Nancy Martland, who said, "I am here tonight to stand with my friends and neighbors of Coos, to look the Northern Pass developers in the eye and tell you that if it is right to bury your power transmission line through Sugar Hill, it is right to bury it through the equally precious and valuable towns of Coos County. And it is not right to divide us into the saved and the damned, the burial towns and the tower towns."
Martland said Eversource looks at North Country communities as dots to be connected on a map and called the project "a lucrative business deal hatched in corner offices in Hartford and Montreal."

"We know our own worth even if you do not," she said. "You cannot bully us, you cannot buy us, you cannot trick us, you cannot wear us down, you cannot make us go away until you do the right thing and bury every mile of cable through our beloved state of New Hampshire ... Go underground or go home."

Northumberland resident Joseph Keenan, who moved to northern New Hampshire because of its beauty, said, "No other issue in 20 years has brought together the political spectrum like this has."

Keenan said he has had his property reappraised twice in recent years and both times described negative impacts to his property from Northern Pass.

Wednesday's session included state Reps. Leon Rideout, R-Lancaster, Brad Bailey, R-Monroe, and Sue Ford, D-Easton, and state Sen. Jeff Woodburn, D-Dalton.

Citing impacts to property values and tourism, Bailey, said, "The vast majority of my constituents won't be happy until you bury the entire line."

Rideout, too, said his constituents are concerned and don't feel like Northern Pass has listened to them.

"If you don't look at burying this, the project will drag on," he said.

Several spoke in support of the project, including a representative from the International Brotherhood of Industrial Workers, who would help erect the towers; Stewartstown resident Landon Placey, who in 2011 sold 60 acres to Northern Pass for $675,000; Lancaster businessman Allen Bouthillier, owner of AB Excavating in Lancaster, whose company he said would benefit; and Berlin Mayor Paul Grenier, who said future development in Coos County depends on cheaper electricity.

Woodburn said Northern Pass' latest proposal still falls short, an imbalance remains and more needs to be done to define benefits to the North Country.

A balance could be struck with additional burial, more money to the region for mitigation or a combination of both, said Woodburn.

An SEC public information session is being held in each of the five counties the line would pass through. Thursday's session in Lincoln was the last of the latest round, with more public hearings to follow.

Communities and individuals wanting to be interveners have until Feb. 5 to file for intervener status with the SEC.

The state agencies that also need to make decisions on permits, such as the N.H. Department of Environmental Services and Department of Transportation, are expected to render their final decisions by Aug. 15.

SEC is expected to render its decision by Dec. 19.
More information about the SEC process can be found at www.nhsec.nh.gov.

Friday, January 8, 2016

Transmission Line Burial Bill Rises from Dead


1/8/2016

Transmission Line Burial Bill Rises From Dead

By Robert Blechl, Staff Writer
Caledonian Record

A bill tabled last year that seeks to designate energy infrastructure corridors in the state for burial of transmission lines like Northern Pass came back from the dead this week after being resurrected by the N.H. House of Representatives.

Voting against tabling it for another legislative session on Wednesday were 241 state representatives, including nearly all state representatives in the North Country.

House Bill 626, whose North Country sponsors include state Rep. Sue Ford, D-Easton, and state Rep. Rebecca Brown, D-Sugar Hill, and state Sen. Forrester, R-Meredith, would create underground utility corridors along state-owned roads and highways.

 The text of the bill reads that as the state's businesses become more dependent on lower-cost energy to remain competitive and as its citizens seek more affordable and cleaner sources of power and become more aware of the value of the state's natural landscapes, "it has become increasingly difficult to site and develop large-scale above-ground energy transmission lines ... without unacceptably high development costs and regulatory delays, unacceptable negative impacts on the state's most valuable natural landscapes, and the potential for unacceptable adverse impacts on adjoining private property values."

The Legislature therefore "finds that it would be in the public interest for the state to designate certain 'energy infrastructure corridors' along, within, and under major state-owned or state-controlled transportation routes, for the underground collocation of major energy transmission lines necessary to support balanced economic growth, reduce or mitigate high energy prices, and contribute to a cleaner environment, while providing the state with market-based revenue from private energy transmission companies in return for the use of such designated energy infrastructure corridors."

Designated are Interstate 89 between I-93 and the Vermont border, Interstate 93 between the Massachusetts and Vermont borders, and Interstate 95 between the Massachusetts and Maine borders.

The bill would not mandate burial of future transmission lines.

Voting to bring HB 626 back were Ford and Brown and state Reps. Brad Bailey, R-Monroe; Erin Hennessey, R-Littleton; Paul Ingbretson, R-Pike; Rick Ladd, R-Haverhill; Linda Massimilla, D-Littleton; Wayne Moynihan, D-Dummer; Laurence Rappaport, R-Colebrook; Leon Rideout, R-Lancaster; John Tholl, R-Whitefield; and John Fothergill, R-Colebrook.

 Voting to keep it tabled were State Rep. Herb Richardson, R-Lancaster, and state Rep. Edmond Gionet, R-Lincoln.

On Thursday, Richardson said it's not a bill specifically about Northern Pass and he voted against it because burial along the state's main arteries would "kill the tourist industry" during construction and ultimately result in higher costs for utility rate payers because utility companies would have to pay the cost to widen the shoulders of the highways, where the lines would go.

 "If they do move the highway, it would be at ratepayer expense and we pay too much now," he said.

Richardson also said, "To dig the roads up will only affect upstate and the tourist industry."

Rappaport, who in past years sponsored similar bills encouraging transmission line burial, disagreed and said, "Just the opposite. Tourists aren't going to go to some place that's ugly."

 Cost-effective burial technology is available and the bill proposed "makes sense for the whole state," said Rappaport.

For those who want to buy property in the state, designated energy corridors would give them piece of mind in that towers and lines will not go near their property and reduce its value, he said.

Of HB 626 getting off the table, Rappaport said, "I'm on cloud nine on that one."

The bill now goes to House Finance Committee before it goes back to the full House and then, if passing a full House vote, to the N.H. Senate.

 In August, after years of fighting against buried line, Northern Pass announced it would bury 52 miles of its proposed 192-mile line that would stretch from the Canadian border to Deerfield.

 Opponents of overhead lines, citing adverse impacts to property values, tourism and the region's scenic beauty, say the company can feasibly bury all of it, but is unwilling because of profit or property tax reasons.