Controversial $1B Canada-US transmission line gets Maine PUC approval

This brief has been updated to include the PUC’s vote on Thursday.

Dive Brief:

Maine Public Utility Commission (PUC) voted unanimously to grant a key certificate for a 145-mile transmission corridor through western Maine for the New England Clean Energy Connect (NECEC) — a project that would deliver up to 1.2 GW of hydropower from Canada into Massachusetts.
The nearly $1 billion transmission line has faced controversy and doubts over its environmental and economic impacts, as critics say it would fall short of delivering on its promises of benefits to Maine residents, while advancing renewable energy goals in Massachusetts. However, supporters view the project as an opportunity to boost Maine's rural economy and reduce the reliance on fossil fuels in New England.
The three commissioners’ voting on Thursday was consistent with the guidance from PUC staff, released on Friday, to establish the ratepayer, economic and environmental benefits of the NECEC would outweigh the costs. The Certificate of Public Convenience and Necessity advances the project through its initial permitting process.

Dive Insight:

Despite the need for new transmission infrastructure to accommodate an increasing amount of clean energy, large projects remain highly controversial, with environmental advocates arguing that transmission corridors passing through states will harm natural sites and resources.

Hydro-Quebec had initially attempted to deliver its hydropower to Massachusetts through an Eversource Energy-owned transmission line called Northern Pass, which would have started on the Canada-New Hampshire border but was rejected by state regulators last year.

Last summer, Avangrid subsidiary Central Maine Power (CMP) and Hydro-Quebec announced that they completed negotiations for 20-year contracts with three utilities serving Massachusetts, which are facing growing demand for clean energy due to increased state goals. Eversource, National Grid and Unitil have power purchase agreements with Hydro Quebec, and all of them have transmission service agreements with CMP.

But while the transmission line would help Massachusetts meet its clean energy goals, it has significant opposition.

"The vast majority of the public comments opposed the NECEC, primarily on the grounds the Project will result in irreparable harm to the environment and scenic values of western Maine, and harm to wildlife, and negative impacts on regional tourism," Maine PUC staff wrote in their March 29 report calling for approval of the project.

Intervenors that oppose the project include NextEra Energy Resources, Vistra Energy and RENEW Northeast, a non-profit member association of renewable energy industry and environmental interest groups. The renewable developers argue, among other things, that the NECEC would discourage the development of Maine-based wind and solar renewable generation.

NECEC critics have ongoing campaigns to ask Democratic Gov. Janet Mills to stop the project, saying that the corridor would "cut through pristine Maine wilderness in order to bring electricity from Canada to Massachusetts, with no stops in between," bringing no clean energy to Maine customers.

Mills endorsed the project in February, in a settlement agreement filed by the Governor's Office of Energy, CMP and the Conservation Law Foundation with the PUC. Under the agreement, CMP would make grid improvements and investments of about $260 million in programs largely focused on benefiting low- and moderate-income consumers.

Despite the widespread criticism, Maine PUC staff found a number of potential benefits from the transmission construction in an 18-month review, including:

Suppression of energy prices from $14 million-$44 million annually;
Reducing capacity market prices an estimated $19 million annually;
Enhancements to transmission reliability, supply reliability and energy source diversity, which was unquantified;
Increasing Maine's gross domestic product by an estimated $94 million-$98 million annually during construction;
Reduction in regional carbon emissions up to 3.6 million metric tons per year.

"This report squarely addresses the questions that have been raised in the course of this proceeding, and confirms that the project will provide environmental and economic benefits for Maine," John Carroll, spokesperson for CMP, said in press statement.

CMP's application for a Certificate of Public Convenience and Necessity established that the project would be in the public’s interest, according to the PUC.

Permits from federal agencies and Maine's Department of Environmental Protection and Land Use Planning Commission will also need to be approved for the project to advance.