Northeast Utilities CEO: Deregulation causes transmission ‘building boom’

Northeast Utilities (NYSE:NU) President and CEO Thomas May said on Nov. 13 that the company believes it will be chosen to build “new electric superhighways” in the region.

The company’s service territory has been less affected by the economic recession than other areas, he said. “We haven’t had the foreclosures that you’re reading about all over the country,” May said. “[W]hen that is removed from your daily life, you have higher customer purchasing and confidence in your economy.”

Furthermore, May said: “[W]e’re starting to see a building boom of sorts, particularly in Boston. … The newspapers are calling it the year of the crane in Boston and to us, that’s exciting because every one of the cranes we see in the sky is next year’s or the year’s after new customers.”

Looking back, he said no one really predicted that deregulation and the resulting required divestiture of power plants would set off the transmission building boom that occurred.

“In New England, we all were required to sell off our power plants, and it became particularly significant that this building occurred and that Northeast Utilities was the biggest benefactor of that,” May said.

New environmental regulations that “are coming out fast and furiously” as well as the age and price of coal plants will cause more plants to retire.

“As plants retire, electrons shift around in the system and new sources of transmission investment are required,” he added. “We really do believe that we will be the chosen one to build these new electric superhighways in the Northeast.”

From 2013 to 2017, Northeast Utilities will spend $3.7bn on transmission, or a $700m increase from what was previously expected. The increase, May said is made up of $500m of new transmission projects in the greater Boston area, with some of that driven by retiring power plants and change in energy flow in the region, and about $200m of that is spread throughout the service territory.

“We feel pretty good about the fact that FERC will continue to encourage transmission investment, that there will not be a significant change [and] that they will provide attractive return because [we] need to continue to invest in our infrastructure,” he said.

In relation to the environmental regulations, he said: “It’s key to keeping the lights on that we build a very robust transmission infrastructure and I think [FERC recognizes] that and the leaders of our industry remind them of that daily.”

Update on transmission projects

May provided an update on the company’s transmission projects, noting that it continues to make great progress on the New England East-West Solution (NEEWS).

Part of NEEWS, the Greater Springfield Reliability Project is the furthest along with construction completed on 85% of the project. “We expect it to be completed in the end of 2013 at a cost of about $718m,” he added.

According to TransmissionHub data, the Greater Springfield Reliability Project is a 39-mile, 345-kV transmission line that beginsin New Bloomfield, Conn., and ends in Ludlow, Mass.

Another project that is part of NEEWS is the Interstate Reliability Project, for which all of the siting and permit applications have been filed in three states. NU is building a 40-mile portion in Connecticut and National Grid plc subsidiary National Grid USA is building the rest out in Rhode Island and Massachusetts.

“We expect to begin substation construction in Connecticut in late 2013 or early 2014, depending on how the permitting process goes and [we] hope to have the project go into service in 2015,” May said.

According to TransmissionHub data, the Interstate Reliability Project is a 75-mile, 345-kV transmission line that begins in Millbury, Mass., and ends in Card Street, Conn.

The National Grid portion of the project will begin in Millbury, Massachusetts and travel south through Sutton, Northbridge, Uxbridge and Millville in the vicinity of Route 146 into North Smithfield, R.I. It will then travel west to Burrillville, R.I., and into Connecticut where it will connect to a Northeast Utilities line at Killingly. The Northeast Utilities project is a 38-mile, 345-kV transmission line that originates at Killingly and terminates at Card Street, Conn.

NEEWS also includes the Central Connecticut Reliability Project, which May said is designed to address the east to west flow of energy across Connecticut. ISO New England is a proponent of the project, he said.

There are 345-kV and 115-kV solutions to making the area more robust that are being considered, he said, adding, “For now, our cost estimate is about $300m with a 2017 in-service date.”

According to TransmissionHub data, the Central Connecticut Reliability Project is a 36-mile, 345-kV transmission line, starting in Frostbridge, Conn., and ending in North Bloomfield, Conn.

May also discussed the Northern Pass project, for which NU continues to make good progress. “It’s the best project, we believe, to come along in decades,” he said, noting that it will inject 1,200 MW of low carbon or no carbon.

The project also has economic value, such as 1,200 new jobs and $25m of property taxes.

May also said that NU has acquired 99% of the right of way, adding, “We hope and expect to have the rest of it wrapped up before the year end and at that point in time, we’ll…file for approval with DOE.”

NU expects to complete the project in late 2016 or early 2017.

According to TransmissionHub data, the Northern Pass transmission project would involve 140 miles of 300-kV DC and 40 miles of 345-kV AC transmission lines and would bring renewable energy from Quebec into New Hampshire to satisfy the need for additional renewable energy in New England.

About Corina Rivera-Linares 3052 Articles
Corina Rivera-Linares, chief editor for TransmissionHub, has covered the U.S. power industry for the past 15 years. Before joining TransmissionHub, Corina covered renewable energy and environmental issues, as well as transmission, generation, regulation, legislation and ISO/RTO matters at SNL Financial. She has also covered such topics as health, politics, and education for weekly newspapers and national magazines. She can be reached at clinares@endeavorb2b.com.