Sunday, August 14, 2011

The Not-So-New MOU: How the DOE Forgot the Public This Time

On Friday, August 12, the Department of Energy announced a new EIS contractor team to replace Normandeau and released the Memo of Understanding (MOU). In this post, a guest blogger reads the not-so-new MOU.


A Guest Blog                                                                    

Before turning to the latest affront from the DOE, the MOU setting forth the “rules of engagement” for the newly-announced EIS consultants, think back. Remember our mindset when the DOE started its process late last year?  We thought they’d be even-handed and fair.  We thought the public had as much weight with the DOE as Northern Pass and its sponsors. We believed if we led the DOE toward the public interest, they’d see it and embrace it.

We were so wrong.  Time and time again, the DOE’s actions have shown they’re nothing but a shill for Northern Pass. 

The public doesn’t have any material role in the DOE’s process.  Sure, there are public scoping meetings, public comments, a public website. But these just allow the DOE bureaucrats to check the box that says they listened to the public and then march off to do Northern Pass’s bidding.

The latest proof of “DOE-as-NP’s-handmaiden” comes from Friday’s announcement of the new EIS consultants (who replace Normandeau, but that’s subject to an asterisk, see #4 below) and the MOU between the DOE, Northern Pass, and the new consultant team.

Here’s how the DOE forgot the public this time around:
1.      Closed door process to choose EIS consultants.  Once again, just like Normandeau, the contractor selection was made entirely behind closed doors.  Well, closed to the public, but not to Northern Pass.   After the Normandeau fiasco, many interveners and others strongly requested that the DOE run an open, transparent process for contractor selection.  Come up with a group of candidates based on recommendations from NP and the public.  Allow public comment.  Then make a decision, with published reasons for the choice.  Well, the DOE completely blew off these suggestions for a fair and open process.  For all we know, the EIS consultants were pre-selected by Northern Pass and rubber stamped by the DOE.  With a closed process, there’s no way to tell.
2.      Northern Pass defines the EIS work and holds the purse strings over the EIS consultants.  You can’t make this stuff up.  The MOU assigns Northern Pass the responsibility of negotiating the “scope of work” for the EIS consultants.  In other words, Northern Pass, the applicant, defines key elements of the EIS review.  Does that sound fair to you?  Do you see anywhere that the public gets to provide input on the consultants’ assignment.  No, of course not, the public isn’t even on the radar screen.  It gets worse.  Northern Pass also negotiates the budget for the EIS work and is “solely responsible” for managing the consultants’ compliance with the budget.  With their work defined by Northern Pass and Northern Pass setting the budget and cracking the whip (“don’t look at that wetland or any WMNF alternatives, no money left in the budget!”), does anyone seriously believe the consultants will effectively be independent?  Here in the real world in New Hampshire, we all know that if you set the task and control the paycheck, you control the job.
3.      Northern Pass knows the EIS schedule, but the public isn’t told.  There’s a separate “Consulting Services Agreement” between Northern Pass and the consultants. The DOE is not a party to it. And guess where the schedule for the EIS work is set out – stuff like due dates, milestones, when the preliminary EIS gets completed, and when the final EIS is supposed to be all wrapped up?  Yup, the schedule is only in the separate NP/consultant agreement.  The schedule of work is carefully omitted from the MOU, so the public is kept in the dark.  The DOE knows the schedule, and hopefully one of the opposition’s sharp lawyers will be able to pry it out and get the schedule into the public domain.  But until then, we’ll know nothing on schedule.
4.      Normandeau lives (as the core data provider)Here’s a tricky point that could be big indeed.  Down in the MOU’s fine print is a provision that says Northern Pass is responsible for “providing project specific data and information” to the EIS consultants and “reviewing the EIS” for “accurate presentation and use of such data and information”.   In other words, it looks like the EIS consultants may not be gathering their own “data and information” about the environmental impacts, but will merely be incorporating the data and information supplied by none other than the applicant, Northern Pass.  And who’s done extensive work for Northern Pass to get the data together?  Normandeau.  It looks like there’s a real possibility that this EIS, with a “new team”, will be less new than we hoped and will instead be based on recycled Normandeau work. Why on earth is Northern Pass, the applicant for a federal permit, given the right to be the data source for the federal EIS?  Why wouldn’t the DOE insist on independent data collection?  Boggles the mind.
5.      Northern Pass gets special closed door sessions to change EISLet’s imagine there’s a proposal from someone at the DOE to do something sensible like have the EIS analyze the alternative of burying the lines.  Northern Pass disagrees.  What’s the process?  Northern Pass gets to have a special, closed door meeting with the DOE to try to smooth things out.  You know, like “sure, analyze burying the lines, but only on the existing PSNH rights of way (not highways or rail beds) because that’s our proposal.”  Does the public get a chance to weigh in?  No.  The public is shut out once again.

That’s the DOE’s process.  It’s hard to imagine any process with less of a substantive role, and with less respect, for the public. Not only is the process applicant-driven, but the public isn't even in the car.

Please forward this discussion to your US Senators and Representatives and ask them exactly what they plan to do to give the public a fair shake.  Ask them to tell you in writing.  Follow up.  And if they do nothing that is effective to give the public the role we deserve, unelect them.

Wednesday, August 3, 2011

Listening to Northeast Utilities' Q2 Earnings Call Today: A Guest Blog

A guest blog on significant aspects and implications of Northeast Utilities' Q2 earnings call for investors today. Northern Pass was a prominent subject. Following their presentations, Charles Shivery, NU's CEO, and Leon Olivier, NU's COO, took nine questions from analysts.The full transcript is here; the audio version is here.        

  • For the first time, the securities analysts on the call honed in on the right of way, eminent domain legislation, and timing issues for Northern Pass. There were tough, direct questions. This hasn’t happened before, so it’s clear the analyst community is becoming aware of the substantial issues facing Northern Pass.
·         Shivery sets a deadline of 6 months, by the end of the second half of 2011, to announce the new “northern” route for NP.  NP is clearly working on the route, and Shivery is putting his credibility on the line by saying that the new route will be announced within 6 months.
·         Shivery sells the message that the only problem from stakeholders with the NP route occurs on the top 40 miles.  He gives no credence, airtime, or indeed any mention whatsoever to any other issues raised regarding NP, and he gives no notice to the investment community about the problems with the existing PSNH ROW.
·         Shivery mentions the new FERC transmission planning and cost allocation order (Order No. 1000) and tries to suggest it is good for Northern Pass. In fact, it is irrelevant to NP as currently designed.
·         For those who don’t understand the difference between “reliability” and “optional” projects, note that the vast majority of the discussion of transmission on the call is about traditional reliability projects – determined by ISO-NE to be “needed” and qualified or to be qualified for inclusion in the customer rate base.
·         “Earlier, Chuck discussed some of the recent developments concerning the Northern Pass project. Recall that the project involves 180 miles of new transmission line in the state, including an AC section in Southern New Hampshire. Of those 180 miles, we currently have right of way for 140 miles. Our focus right now is on the 40 northernmost miles where we need new right-of-way,” Olivier says. There’s a misleading statement.  NU is trying to take analysts off any scent that there are problems on the existing PSNH ROW.  As we know, contrary to the statement, they DO NOT “have” the necessary ROW for the 140 miles!!! All those so-called expansions would also have to be new ROWs, for one.
·         “We continue with our outreach in New Hampshire stakeholders and communities as we identify and secure a route for those 40 miles and hope to announce such a route later this year. We are making solid progress in this effort.”  There’s a clear statement to the investment community that NP is making tangible progress on the new northern route.  If this is true, we need to worry…
·         The new timeline:  “This process of identifying routes and providing stakeholders with time to review and comment has added about an additional 9 months to the siting process. That is why we now estimate that the construction will begin in early 2014.”
·         “As a reminder, the project has a number of benefits for New Hampshire and the region. It is expected to add more than $25 million a year in local property tax revenue and add 1,200 construction jobs. We estimate it will reduce the region's wholesale electric cost between $200 million and $300 million annually, including at least $30 million that would accrue to New Hampshire, and reduce CO2 emissions by as much as 5 million tons a year.” NU's Olivier has now wrapped around NP’s claims in an official statement to the market. This statement is now fair game for any challenges that it is inaccurate and/or misleading under federal securities law concepts.
  • · And if anyone thought there would really be an “independent” environmental assessment: “We have a contractor that will put together an environmental assessment that looks like 2 seasons. It looks at both kind of spring and fall. And we've already started that on the first 140 miles on the existing right-of-way. We'll be turning over that data and information fairly soon to the DOE third-party contractor that will evaluate it.” In other words, NP’s own consultant is doing the environmental work and the DOE’s consultant will just check it over. Independent?

  • "As you may know, the U.S. Department of Energy environmental assessment process begins once a specific route is submitted. We applied last fall with the DOE, and they have left open the public comment period on the project so that the petition and the review process can comment on the route that we identified. The DOE will announce a consultant who will be working on the environmental data already collected for the lower 140 miles of the route. We expect this process to continue throughout this year and into 2012 as we advance through the siting process. Additionally, we will begin preparing our application for the New Hampshire Site Evaluation Committee once the northern 40 miles of the route are identified." Does the underlined statement mean that the data already collected by Normandeau in the existing ROW will be the data used by the DOE's EIS consultant? Independent?
  • · NU’s view of HB 648: discriminatory? “And the Eminent Domain Bill, what that would have done is essentially it would have precluded the right of eminent domain for any other project other than essentially reliability based projects. So if that was the case, then it would be very difficult to develop any other renewable resources inside of New Hampshire, so we thought that was discriminatory.” Just ridiculous. A developer of a renewables generating plant does not get eminent domain. Why should the transmission line that hooks up the plant get Eminent Domain?
  • · This response to a question about connections to wind developments in NH suggests that NP, or some additional lines on the same corridor, will try to hook up Brookfield or other wind resources. “The wind developers in the north are all essentially commercial competitive enterprises, and what we do there is a system, as necessary, to make interconnections through their wind development, most notably in New Hampshire.”

Now You See It, Now You Don't: NPT's 2016 In-Service Date

Another entry has gone "missing in action" on the Northern Pass website. The journal post, "Digging into underground," disappeared between Friday afternoon, July 22, and Monday morning, July 25. The announcement of a delayed project completion date from 2015 to 2016 vanished even faster, sometime between 9 a.m. and 9 p.m., August 2. (See Before and After, following.) Along with the latter disappeared the residual dead link to the post removed on July 25, "Digging into underground."


                                                                Before
                                                   (9 a.m. August 2, 2011)




After
(9 p.m., August 2, 2011)