Friday, May 6, 2011

Guest Column: Remarks by Will Abbott, SPNHF (May 5, 2011)

Remarks by Will Abbott
VP for Policy & Land Management
Society for the Protection of NH Forests

At the Concord Chamber of Commerce
May 5, 2011

Thank you to the Concord Chamber for hosting Gary Long and me today to talk about Northern Pass.  This is an important debate for NH, because Northern Pass is the largest energy project in our state since Seabrook Station.

I’d like to start by acknowledging two facts of life about electricity.  First, delivering the right amount of electrons to the right destination at the time they are needed is a very complicated enterprise.    
Second, there are no easy choices in generating and delivering electricity.  Each choice comes with financial, environmental and social costs and benefits.   It is how we evaluate the costs and benefits of these choices that is most critical to a successful energy future.    

Northern Pass is a project that proposes to bring 1200 MW of electricity to southern New England from Quebec.  New Hampshire is being asked to host a 180 mile extension cord strung over 1100 new towers, each 90 to 135 feet high, through 31 communities in 5 of our 10 counties from Pittsburg to Deerfield.  In exchange for this power coming south, New England will send north over $1 billion a year for 40 years to Hydro-Quebec, the generator of the electricity. 

Why would an organization that has spent the last 110 years conserving New Hampshire’s scenic landscapes and the last 30 years practicing and teaching about the benefits of alternative energy --- including wood for energy --- oppose a project like Northern Pass? 

We believe it’s bad for New Hampshire for at least four reasons.  First, it will create a permanent and highly visible scar on the very landscapes that make New Hampshire New Hampshire.  Second, there is no discernable long term benefit for New Hampshire in the project as proposed.  Third, Northern Pass will be a net detriment to the health of New Hampshire forests and the forest products industry these healthy forests support.  Fourth, as the state’s oldest and largest land trust, the Forest Society has a legal and ethical obligation to defend existing conservation lands from commercial development like Northern Pass.

Our business at the Forest Society is conserving New Hampshire’s forested landscapes.  These landscapes provide New Hampshire with exceptional scenic beauty, sustainable economic opportunities and markets and a very strong sense of place to those who choose to live and work in the communities they shelter.  The Forest Society’s mission from our beginning has been “to perpetuate the forests of New Hampshire through their wise use and their complete reservation in places of special scenic beauty.”   Erecting 180 miles of towers higher than most mature tree species in New Hampshire is not our idea of wise use.  If built, these towers will forever desecrate scenic views along the entire Pittsburg to Deerfield route.

On projects of this scale the ultimate balance sheet should include a full assessment of all the plusses and all the minuses.  A decision to move forward should be well informed, and should reflect a determination that the public interest is being well served.  The good news is that Northern Pass will be the subject of federal and a state regulatory review processes.  We believe these processes are established to act in the public interest.   These reviews will likely take two or more years, and will hopefully answer many of the unanswered questions that exist about Northern Pass today.  If, at the end of this analysis, the primary economic benefits for New Hampshire are three years of short term jobs and $25 million in annual property tax payments, we say NO DEAL. 

The impact of Northern Pass on forests and forest ecology needs further study, but we believe these impacts are likely to all be negative.  The impacts on forest products economies will also be adverse.  The reality is that Northern Pass may slam the door on the development of domestic renewable energy within New Hampshire in the name of “competitively priced power.” 

The impact of Northern Pass on landowners is already being felt today.  Real estate sales are not happening because of the uncertainty over whether and where this power line may actually be sited.  Landowners whose primary asset is the home they own are now suffering a double whammy --- the economic decline we’ve all been living through for the past 2.5 years is now coupled with a threatened decline in value of their real estate due to the Northern Pass preferred corridor.  To add insult to injury, the threat of eminent domain is hanging over the heads of landowners in the corridor where an entirely new right of way will be required.

There has been a very visceral, very negative public reaction to Northern Pass in the 31 communities affected.   If, as Governor Lynch suggests, the project should not move forward if the affected communities don‘t want it, the smart thing for the advocates of Northern Pass to do would be to withdraw the project as proposed from further consideration.   At some point, the public interest should be what the public says it is.  This is why the Society’s President/Forester Jane Difley corresponded more than a month ago with the CEOs of Northeast Utilities, NSTAR, Hydro Quebec and PSNH to suggest they withdraw the project as proposed, go back to the drawing board and come back with a Plan B.  There may be a way of successfully bringing HQ power to southern New England, but Plan A is not it.  Jane has yet to receive a reply.

If Northern Pass persists with Plan A, we believe there are a host of questions in need of answers before anyone --- particularly the regulatory review agencies of government
--- can fully and independently establish whether this project in any form is actually in the public interest.  To pass the public interest smell test, there should be clear evidence that public benefits exceed costs.

What are some of the compelling public benefits that should drive these decisions?

One compelling public benefit would be meeting a need for electricity.  The Granite State is a net exporter of electricity.  New Hampshire does not need the new electricity Northern Pass offers, and in fact it is not proposed to receive any of the new power directly.  If every generating station located in NH were at full power we’d be generating over 4000 MW.  On an average day we consume 1200 MW.
New England does not need the electrons.  The peak demand recorded by ISO NE over the past five years was 28,000 MW.  The installed capacity of New England generating stations is 33,000 MW.  In fact, ISO NE’s own records indicate that they’ve been selling up to 5% of their total New England generation to New York over the past 4 years.

A second compelling public benefit would be to reduce New Hampshire’s gross carbon emissions.  The most immediate way to reduce New Hampshire’s carbon emissions would be to schedule the retirement of the three coal plants that PSNH operates in Bow and Portsmouth and replace that power with another low carbon source of electricity.  This is not even on the table for discussion with Northern Pass.

Gary and I served together with 25 other New Hampshire citizens on Governor Lynch’s Climate Change Task Force three years ago.  At that time he offered this concept of low carbon Canadian hydro as a way to offset 6 million metric tons of New England’s carbon emissions, one of 67 recommendations I supported.  But last fall when the Northern Pass was publicly introduced, 6 million became 5 million.  Last November when Jane Difley and I met with the Northern Pass’ project manager, we pressed her for some analysis that explained this projected reduction.  We were told that they were doing a study and that we’d see the results of this study when it was completed.   Six days later at a BIA energy conference here in Concord she used the figure of 2.5 million tons in carbon reductions for Northern Pass.  We’ve still seen no comprehensive analysis, so you can imagine why we are a bit confused over what the exact savings really might be. 

A third compelling public benefit would be a defensible reduction in retail prices paid for electricity by New Hampshire consumers.   By Northern Pass’ own projections, New Hampshire ratepayers will see a $35 million a year reduction in the price of power they consume from the New England wholesale market if Northern Pass power is sold to New England.  What will Northern Pass see from Hydro Quebec?  At the end of year one of operation, NP will receive by its own estimate a patyment from HQ of $219 million, of which $68.5 million is return on equity to NP approved by the Federal Energy Regulatory Commission.   

Of that $68.5 million NP receives as its return on equity, it expects to pay $38 million in federal income taxes.  So HQ scores first on the list of beneficiaries.  Northern Pass scores second.  The IRS scores third.  And the New Hampshire consumer is at the bottom of the benefit list.  As a federal taxpayer I may find some silver lining in this, but as a New Hampshire resident and consumer I start to seriously question just whose interest is being best served by this deal.

There is another concern we have about the Northern Pass project, and this relates to the federal and state decision-making processes that the project must clear before it can be built.   At the federal level, the Department of Energy must issue a Presidential Permit for this powerline to cross the international border.  In the 60 years the federal government has been issuing Presidential Permits they’ve never rejected an application.   While this raises a yellow caution flag with us, we are encouraged that the entire New Hampshire congressional delegation is focused on assuring that the Environmental Impact Statement that DOE will prepare for the project will be thorough, transparent and robust in its analysis of a broad range of credible alternatives --- including the no build option.

The ultimate decision to site this power line in New Hampshire is a state decision.  Under state law the decision rests with the NH Site Evaluation Committee  The SEC includes 15 state commissioners and department directors, each of whom are honorable people who work hard at their day jobs.  But in the 32 years I’ve lived in New Hampshire I am not aware that the SEC has ever denied an application for the siting of an energy facility.  Again, this gives us considerable pause.  If we expect the SEC to make a balanced, well informed decision we must insist that they gather the necessary information to make such a decision.   

This is one reason why the Forest Society joined with the Conservation Law Foundation and several other conservation organizations last week in filing a petition with the DOE to set the Northern Pass Presidential Permit application aside temporarily while it conducts a comprehensive analysis of the pros and cons of importing Canadian hydro power to meet the combined short and long term electricity needs of New England and New York.  There is no downside to such an analysis, as it serves to better inform governmental agencies that must make key decisions for the project to advance.     

The Northern Pass raises a host of other issues that time does not allow us to explore today, but that hopefully the regulatory review process will not only thoroughly study but fully vet.  We need to recognize that there are some questions neither the DOE nor the SEC will ever address.   For example, since New England energy consumers will ultimately pay for the cost of bringing this power to market through the price they pay for the electricity, we think it is a fair question whether the $1.1 billion cost of this project --- or the total cost of any alternative --- is the best way for society to spend this kind of money for the benefit of the power.  What if society could invest $1.1 billion in energy conservation and save more than the amount of electricity this project proposes to bring to market?  Sadly, this question does not get asked or answered by the Department of Energy or by the Site Evaluation Committee. 

Finally, we believe that the power of eminent domain should be off the table for the purposes of this project.  In 2006 New Hampshire voters adopted an amendment to the New Hampshire constitution by a margin of 85% to 15% which simply states:

No part of a person’s property shall be taken by eminent domain and transferred directly or indirectly to another person if the purpose of the taking is for the purpose of private development or other private use of the property.

Northern Pass LLC is a private New Hampshire corporation.  Its proposed asset is a privately owned transmission line being built entirely with HQ money for the exclusive use and benefit of HQ.  We see no reason why any New Hampshire landowner should be subject to the threat of eminent domain for such a project.  HB 648, which passed the House last month on a 317 to 51 vote, is now before the State Senate.  This legislation brings the existing statute governing utility access to eminent domain --- originally adopted in 1911 --- into sync with article 12-A to the Constitution adopted in 2006.  We strongly encourage each State Senator to stand up for landowner rights and support HB 648 and we encourage Governor Lynch to sign it into law should it come to his desk.   

As I hope I have made clear, the Forest Society believes the Northern Pass project as proposed is bad for New Hampshire.  If Northern Pass advocates are truly listening to what the large majority of people in the affected communities are actually saying, common sense would argue that the wise course of action would be to withdraw the initial proposal, go back the drawing board, and come up with a Plan B.   The public could not speak any more clearly or plainly than it already has on Plan A. 

Thank you and I look forward to your questions.