A substantial amount of the property required for the Northern Pass’ 40-mile section in the northern New Hampshire area where the company does not have a right-of-way has been secured, Lee Olivier, executive vice president and COO, of Northeast Utilities (NYSE:NU) said during the company’s 4Q11 earnings call Feb. 24.
“While we have secured a significant amount of the property, we continue to negotiate with additional property owners to secure the remaining sections of the project,” he said. “We believe we will be able to acquire an acceptable route, which would make it feasible to construct the project, even if the legislation before Gov. [John] Lynch is enacted.”
Olivier was referring to House Bill 648, which prohibits public utilities from petitioning for permission to take private land or property rights for the construction or operation of certain transmission facilities. State Sen. Jeanie Forrester told TransmissionHub Feb. 24 that the Senate president and speaker of the House of Representatives are expected to sign off on the legislation, which would proceed to the governor.
“However, given the ultimate design needs of the project, along with the fact that we still need to complete significant siting and permit requirements, which will vary based on the route we ultimately select, there is a possibility that the commencement of construction could be delayed beyond the beginning of 2014,” Olivier said.
Responding to a question about Hydro-Québec’s “appetite” regarding Northern Pass given changed natural gas prices, Olivier said: “Clearly, when we started the project, gas was up around the $10, $11, per million BTU range. And of course we all know where gas is now. The way they look at that is, prices go up, prices go down. And, of course they are concerned with that, but they’re building — they’ve got about a $25bn capital program. So, they are building a significant amount of large, hydro facilities in [and around] Québec.”
Hydro-Québec, he said, knows New England is one of its major export markets and that it needs an outlet to get into the region. “[T]his particular project with this particular routing provides really the best opportunity to do that,” he said. “So, they continue to assess the numbers. We continue to meet with them. They continue to be supportive of the project. And, it is my expectations that this project will get built because it is needed by New England and it is needed by Hydro-Québec.”
Charles Shivery, chairman, president and CEO of Northeast Utilities, said the company is not yet in a position to file an amended route with the U.S. Department of Energy. The project, he said, will materially reduce fossil fuel usage and lower power costs in New Hampshire and the region.
“While we do not believe we need to use eminent domain in acquiring the property rights for the project, we also don’t think this bill will be in the best long-term interest to the state,” he said of HB 648.
He also noted that the House is considering a bill that would require Northeast Utilities wholly owned subsidiary Public Service of New Hampshire (PSNH) to divest its nearly 1,200 MW of generation by the end of 2013. “We continue to believe that PSNH’s ownership of generation is firmly in the best interest of our customers and believe the Legislature will concur,” he said.
Shivery also mentioned the Connecticut Senate Democrats’ 2012 energy agenda, which includes performance standards and penalties for utilities.
“We believe the versions of the bills we have seen to date are very workable and will help all parties achieve the common goals of improved…response to natural disasters,” he said.
Among other things, Shivery also mentioned the proposed Northeast Utilities/NSTAR merger, noting that if state approvals in Connecticut and Massachusetts are received the first week of April, the transaction may be consummated before April 16.
The company continues to work on its transmission projects, including the Greater Springfield Reliability Project, which Olivier said is the largest component of the New England East-West Solution family of projects.
The project remains on schedule and Northeast Utilities is “very confident we’ll be able to complete the project in late 2013, on its budget,” Olivier said.
He also noted that the company filed the siting application with the Connecticut Siting Council in December 2011 for the Interstate Reliability Project, with a decision expected in early 2013.
“We expect National Grid USA to file its siting application this spring and we expect to receive all siting approvals by the end of 2013,” he said, referencing the National Grid plc subsidiary. “That would support a construction schedule that would place the project into service by the end of 2015.”
Olivier also said ISO New England continues to evaluate Northeast Utilities’ third major initiative with NEEWS, the Central Connecticut Reliability Project.
“Our transmission capital expenditures totaled $459m in 2011, up significantly from the $261m dollars we invested in 2010, and higher than our initial $434m capital projections for 2011,” he said. “This was primarily due to the Greater Springfield project, where we invested nearly $200m in 2011, $30m more than we projected earlier in the year.”
In a Feb. 23 statement, Northeast Utilities said it reported earnings in 4Q11 of $113.3m, compared with earnings of $129.3m in 4Q10. The company also said it earned $394.7m in 2011, compared with $387.9m in 2010.