Eversource, National Grid cost sharing agreement on Greater Boston projects filed at FERC

Eversource Energy Service (Eversource Service), acting on behalf of its electric operating company affiliates NSTAR Electric and Public Service Company of New Hampshire – together, the Eversource Companies – on Feb. 3 submitted for FERC acceptance an agreement regarding cost sharing for the Greater Boston Area Transmission Solution Plan between the Eversource Companies and New England Power d/b/a National Grid.

The cost sharing agreement is a contract designed to set forth the respective rights and obligations of the Eversource Companies and National Grid – together, the parties – in connection with the sharing of costs of the planning, engineering, permitting and siting of facilities associated with the Greater Boston transmission projects. Eversource Service, a wholly owned service company subsidiary of Eversource Energy (NYSE:ES), also said that the parties entered into the agreement to document their cooperation and coordination in building the Greater Boston transmission projects, which are planned reliability upgrades to satisfy certain New England regional reliability needs.

Eversource Service noted that it is making the filing with FERC out of an abundance of caution, in the event that FERC considers the cost sharing agreement to be jurisdictional, and also requires the filing of the agreement.

The company requested that FERC allow the cost sharing agreement to become effective 60 days after the filing, or on April 4.

Of the Greater Boston Transmission Project, Eversource Service noted that ISO New England (ISO-NE) in 2010 identified reliability and transmission security issues in the Greater Boston area of the New England region, and conducted a study process to re-evaluate potential solutions to those reliability needs. ISO-NE in 2015 identified a set of interstate and intrastate AC transmission upgrades and new transmission facilities in Massachusetts and New Hampshire, proposed by National Grid and the Eversource Companies as the preferred solution to those regional reliability needs, the company said.

“As a result of the ISO-NE process, the Eversource Companies and National Grid are jointly developing and constructing a series of transmission projects to implement comprehensive improvements to the electrical transmission system in New England,” the company said.

The Greater Boston transmission solutions consist of four portfolios of projects, corresponding to the four sub-areas in the ISO-NE’s Feb. 18, 2015, Greater Boston Preferred Solution presentation to the Planning Advisory Committee:

  • North sub-area: A series of projects to enhance interstate power transfers and to address North sub-area power transfer constraints
  • South sub-area: A series of projects to enhance interstate power transfers and to address reliability issues in South sub-area
  • Western suburbs sub-area: A series of projects to address reliability issues in the Western sub-areas
  • Downtown Boston sub-area: A series of projects to address Downtown Boston limitations

As noted on the companies’ website on “The Greater Boston and New Hampshire Solution,” National Grid and Eversource are teaming up to deliver a set of critical reliability projects in the Greater Boston and southern New Hampshire area. The companies said that their Solution comprises various projects, each with individual merit, which together address the reliability problems identified by ISO-NE, improve the region’s power system, and meet the customer demand for power for years to come. The notable projects are:

  • Merrimack Valley Reliability Project: New overhead 345-kV line in existing transmission rights of way in the towns of Tewksbury, Andover, and Dracut, Mass., and Pelham, Hudson, Windham, and Londonderry, N.H.
  • Woburn to Wakefield Line: New 345-kV underground cable in the towns of Woburn, Winchester, Stoneham, and Wakefield, Mass.
  • Mystic to Woburn Line: New 115-kV underground cable in the towns of Woburn, Winchester, Medford, Somerville, Boston (Charlestown), and Everett, Mass.

A National Grid spokesperson told TransmissionHub on Feb. 9 that about 40 projects that are part of the overall solution have an estimated total cost of about $740m.

Discussing the cost sharing agreement, Eversource Service noted in the filing that the Greater Boston projects will require the Eversource Companies and National Grid to coordinate and collaborate on the planning, engineering, siting and construction of their electric transmission facilities, including transmission line structures and conductors, substations and other related facilities. To avoid duplication of work effort and consulting services, and to avoid duplication of costs, the Eversource Companies and National Grid determined that a cost sharing agreement was in their best interests and best interests of customers, and comparable to arrangements they have entered into where they have partnered on other transmission projects, Eversource Service added.

Under the agreement, the parties may from time to time agree to share certain costs associated with Greater Boston, Eversource Service said, adding that particular shared costs relating to a Greater Boston project will be allocated between the parties on a case by case basis. Section 3 of the agreement provides that, if the parties fail to agree on allocation of a shared cost within 30 business days after determining that a particular cost will be a shared cost, such shared cost will be allocated between the parties based on the pro-rata share of the total number of miles of transmission lines associated with each party’s respective ownership of the particular Greater Boston project for which costs are being shared.

Eversource Service also said that with respect to shared costs that are costs, fees or expenses payable to third parties, the parties will use commercially reasonable efforts to cause such third parties to invoice each party separately for its allocable share of the shared costs established by written agreement of the parties.

Each of the parties will bill the other for its applicable share of the shared costs by sending an invoice to the other party on a quarterly – or more frequently if elected by the parties from time to time – basis for approval by the other party’s project manager. Eversource Service added that the billed party will have the right to request additional information concerning any invoice submitted by the billing party. Within 30 business days of the date of receipt of any invoice, the billed party is to promptly pay all amounts in such invoice not reasonably disputed by it, the company said.

National Grid is a subsidiary of National Grid plc.

Article amended at 5:24 p.m., EST, on Tuesday, Feb. 9, 2016, to amend the cost estimate provided by a National Grid spokesperson.

About Corina Rivera-Linares 3277 Articles
Corina Rivera-Linares, chief editor for TransmissionHub, has covered the U.S. power industry for the past 16 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.