Midterm results point to more land mines ahead for embattled Northern Pass line

Within days of the midterm elections this year, a high-ranking Northeast Utilities executive took to the phone to assure investors the company's $1.4 billion, 187-mile power line proposal from Canada to the New England Power Pool would soon see the light of day.

That executive was Lee Olivier, the company's executive vice president for business development. He told investors the 1,200-megawatt cable called Northern Pass was facing crucial milestones in 2015, among them the release next spring of a draft Energy Department environmental study of the project and expectations that the company will file for state approval shortly thereafter.

Olivier sounded confident in the call and appeared to predict the controversial project, still opposed by many Granite Staters, would win its federal and state permits in early 2016, partly because energy issues featured so prominently during the 2014 campaign. That sunny outlook would make the line ready for hauling Canadian hydropower south from Hydro Quebec by the second half of 2018, he said.

Olivier also promised that the Hartford, Conn.-based company would work with stakeholders to achieve consensus but acted as if a "two-year construction period" was already in the works for those focused on the regional wholesale market.

"I have seen that many of the sell-side forecasts on NU already account for this construction schedule," he said, before arguing for the line due to "limited wintertime gas deliveries, the retirement of older generation, rising wholesale energy and capacity prices, increasing renewable portfolio standards, and carbon reduction mandates in some New England states."


Yet, the political reality on the ground leaves a much different impression. Because NU has refused so far to reconsider its proposed route, most of which would be elevated and part of which would cut through the White Mountain National Forest, it seems the company is failing when it comes to playing small ball with New Hampshire politicians.

According to several sources in state politics, the midterms if anything tilted the scales against Northern Pass. Republicans may have steamrolled Democrats to take the House and pick up seats in the Senate to control both ends of New Hampshire's General Court, but that doesn't necessarily mean good news for the project.

Sen. Jeanie Forrester, a pro-business Republican and chairwoman of the Finance Committee, explained that the issue has effectively brought together those concerned about private land rights with environmental activists, not to mention those who view the cable as a raw deal. In New Hampshire especially, that is a tough coalition.

"I think they had to tell their investors what their investors wanted to hear," she said.

As has been stated by many others in the state, including Gov. Maggie Hassan (D), Forrester insisted NU has to re-evaluate the economics of burying the entire cable. Either that or the company will face the prospect of state rejection for a project that is way ahead on paper of rival ideas through Vermont and Maine, all with the same goal in mind of wheeling merchant hydro to states that badly need the generation diversity.

"If anything, if this project is going to happen, it's going to happen underground all the way, and I don't think they have any interest in doing that," Forrester said.

She added: "There's not a dispute about wanting to ensure that there's more [fuel] diversity and that we get power to the power pool. It's how we get there."

Rep. Gene Chandler, a Republican former speaker of the House and currently the House Republican policy leader, offered much the same sentiment.

Chandler quipped that he "feels a little left out" because rival power line proposals through Vermont and Maine have committed to burial and "using 21st-century technology." This has left many in New Hampshire with the impression that NU is trying to do the project cheaply, at the expense of the state's scenery in many areas and right through the guts of the White Mountains.

"I don't think the midterms helped them in any way," he said. "The bottom line is, they should bury it. New Hampshire is getting picked on."

Forrester and Chandler both made a point to note that the line would transmit open-market power, meaning it has no eminent domain rights, and, in any event, the Granite State is a net exporter of electricity. So the state's motivation would be to help the rest of New England, get the jobs and possibly make a few bucks along the way, assuming the project can win more support outside of some business groups and electric workers unions.

'Show us the study'

Forrester, clearly charged up to talk about the issue, also took issue with the notion that NU -- viewed by many as an out-of-state interloper -- had not done much at all to reach out to those affected. At least eight of her constituent communities are in the proposed route's path, but Forrester said she has yet to hear from the NU president.

"If they were interested in working together with us, I would think we would have had a conversation, but we never have," she said.

Forrester also brought up the notion pushed hard by NU that burial through all that granite would be uneconomical. She noted that NU often claims it has an internal study showing as much, but executives have not released the study when prompted.

"You can't just say it, you've got to prove it," she said, adding that she believes the cost of such a study, at an estimated $2 million, would be well worth it to move things along.

"If the study hasn't been done, then do the study," she said. "Show us the study."

An NU spokeswoman, usually quite responsive over email, did not comment when asked for the study or why the supposed study has never been made public.

Others in state politics confirmed many of the points brought up by Forrester and Chandler, but they also noted a wild card that could shake things up: NU doesn't have to get its line through the General Court at all but rather though a Site Evaluation Committee made up of regulators and state-appointed officials.

In fact, legislation that would have prodded NU toward burial was shelved in the state Senate last year after passing the House. It's not clear whether such legislation will be reintroduced next year, so the decision likely will be left to the nine-member committee, not the politicians directly, though changes made to the committee were pushed through largely by Northern Pass opponents to bring more public overview into the mix.

Jack Savage of the Society for the Protection of New Hampshire Forests said that in addition to the federal special use permit and the presidential international boundary permit from DOE, NU will have to negotiate its way through the so-called SEC, which until recently didn't have a full-time staff.

Savage said that part of the process comes with a lot of uncertainty.

"It's a squishy landscape, no doubt," he said. "The SEC committee and the process itself is in the midst of undergoing changes. There are some unknowns in terms of how it will operate and behave."

Finding the balance

Jim Monahan, a Dupont Group lobbyist with several energy clients in Concord, said it could well be that NU believes it can "cram the project through" the committee. That said, Monahan does not believe such tactics would work, nor does he believe a cold winter with gas price spikes would move the needle much either.

"There is some speculation that they are going to revise the proposal, based on what we've heard," he said.

He added, of recent blackouts in the state, "That's a gas problem. That gas problem is likely to be solved sooner than adding transmission coming out of Canada."

Savage believes the atmosphere is heavily against the project along bipartisan lines, unlike in neighboring Vermont, where only a handful of people showed up at the first presidential permit public hearing for TDI's proposed cable through the state. In New Hampshire, more than 300 attended the first such meeting on Northern Pass, most of them to indicate displeasure.

"If you look at New Hampshire politics, the big issue has been and will likely continue to be private property rights, and they have not yet secured site control for their project," Savage said. "Northern Pass has been on the demise in the Legislature for the last couple years. I don't see that changing."

So how about the view from NU? Lauren Collins, a media specialist at the company, was given approval to release the following statement after several rounds of emails on the subject:

"Our perspective is that we need to strike the right balance: deliver a project that works reliably and economically -- and one that also respects the various concerns of stake holders," she wrote. "Ultimately, we may need to make some adjustments to achieve that balance in order to earn support and move forward with the best possible project. The main challenge with total underground of a project is the incremental cost."

Collins added that the forthcoming DOE analysis, which will include an assessment of alternative routes, will help the process along.

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