Northeast Utilities (NYSE:NU) continues to work on more than 200 transmission projects, which are in various stages of development, siting and conceptual planning, construction, testing and being placed in service, the company’s Transmission Group President Jim Muntz told TransmissionHub.
For 2011, the company expects to spend about $450m on its two biggest projects, including about $190m on the Greater Springfield Reliability Project (GSRP) and about $20m on the Northern Pass Transmission Project, which is still in its early siting process, Muntz said.
According to Northeast Utilities, GSRP is one of four major transmission projects that are part of the New England East-West Solution, or NEEWS. It has a length of 39 corridor miles of new and reconstructed transmission lines across Connecticut and Massachusetts and includes three major substation upgrades, two in Massachusetts and one in Connecticut, as well as work on five other substations in Massachusetts.
Northeast Utilities’ share of NEEWS is about $1.35bn and $1.1bn for the Northern Pass project, Muntz said. Those figures represent 75% of the estimated total project costs.
Of the estimated $718m GSRP, Muntz said the idea there is to ensure, “that we don’t have lines overloading and overheating or system instability, regardless of what materializes with new generation, old generation retiring or generation dispatch. This project is part of the foundation of the robust competitive electric market in New England.”
Northeast Utilities obtained its last permit – from the U.S. Army Corps of Engineers – for the GSRP and expects to complete it in the end of 2013, Muntz said.
The Interstate Reliability Project, which is also part of NEEWS, will follow, he said, noting that it is a joint project between Northeast Utilities and National Grid plc subsidiary National Grid USA.
According to Northeast Utilities, this project is a proposed 345-kV high voltage transmission line that will strengthen the interstate transfer of electricity across Connecticut, Rhode Island and Massachusetts. The project will span Northeast Utilities’ Connecticut Light and Power’s and National Grid’s service areas.
Construction is expected to begin in late 2013 or early 2014, pending the project’s siting plans and permit applications approvals. Northeast Utilities also said the project is expected to be in service in late 2015.
As for the Northern Pass “public policy” project, Muntz said the company has been working with FERC and New Hampshire officials on the $1.1bn DC line between the U.S. and Canada to import 1,200 MW of Canadian hydropower, specifically, from Hydro-Québec. Northeast Utilities hopes to complete the Northern Pass project in 2016, he said.
The Northern Pass Transmission LLC is a limited liability company organized as a joint venture between Northeast Utilities and NSTAR to develop, construct, own and maintain the project in New Hampshire. Northeast Utilities also said that FERC approved the project’s transmission service agreement in February.
Approvals from the U.S. Nuclear Regulatory Commission and Connecticut state regulators are still required for the Northeast Utilities/NSTAR (NYSE:NST) merger, which FERC approved in July, Muntz said, adding that right now the companies expect the merger could be completed by the end of the year.
While there is some opposition to the Northern Pass project in New Hampshire, Muntz said, “We think we can work through that and find a route that is acceptable to all the stakeholders.”
The other projects that Northeast Utilities is working on are generally smaller and involve, for instance, replacing aging insulators and conductors, which are part of a proactive maintenance effort to ensure NERC compliance, he said.
Northeast Utilities will spend about $5m this year and about $15m in 2012 to improve reliability around Dominion’s (NYSE:D) Millstone units in Connecticut. Specifically, the project entails separating certain double-circuit towers in efforts to prevent widespread power outages should failures occur. This is an example of meeting North American Electric reliability Council criteria about system design, Muntz said.
Northeast Utilities is also working with a consortium of other transmission owners on determining what is “the next best thing for our customers” as it pertains to renewable energy, he said.
The “monkey wrench” for renewables now, Muntz said, is the price of natural gas, which is keeping the market price of power low enough “that it’s now becoming maybe not as politically tenable to be saying we want to have 33% of renewables by 2030 [for instance], recognizing the actual price of renewable versus a natural gas driven market for energy.”
New Hampshire and the other northeast states have renewable portfolio standards to meet.
Solar energy remains “extremely expensive” and while biomass sounds good, “there is only enough wood in New England for about 300 MW of biomass, which doesn’t really move the needle.” Onshore wind, in his view, looks the most attractive, Muntz added, due to its lowest cost.
Among other things, he said FERC’s Order 1000, which was issued in July and reforms the commission’s electric transmission planning and cost allocation requirements for public utility transmission providers, should solve, in a couple of years, the funding issue for public policy projects. Northeast Utilities will be looking at that closely as it evolves.
Muntz said: “For New England, we don’t see it as a huge change. New England has been wrestling with the question of cost allocation for public policy or economically driven projects for a couple of years already. This just sort of puts a deadline on the debate, so we think it’s good.”