N.H. regulators approve 40-year lease agreement involving Northern Pass

The New Hampshire Public Utilities Commission, in a Feb. 12 order, approved a 40-year lease agreement between Eversource Energy (NYSE:ES) and Northern Pass Transmission LLC (NPT) regarding the 192-mile Northern Pass transmission project, conditioned on the issuance to NPT of a certificate of the site and facility from the New Hampshire Site Evaluation Committee.

Eversource intends to lease certain land and easement rights it holds to NPT, which plans to use the leased rights to build the high-voltage electric transmission line from the New Hampshire border with Canada to Deerfield, N.H., the commission said.

The commission said that it also approves a settlement agreement that provides that NPT will pay about $15m over the term of the lease to fund “non-wire” alternatives and renewable energy projects to benefit New Hampshire customers.

The commission said that its order is not a final determination of the property rights relating to the lease as the disposition on property rights is not within the commission’s jurisdiction.

“Nor is this order an approval of the NPT project itself, the siting of which is within the jurisdiction of the Site Evaluation Committee,” the commission said.

As TransmissionHub reported, the committee earlier this month denied the Northern Pass project application. NPT then said that it is “shocked and outraged by” the decision and that it would seek reconsideration of the decision.

According to the commission’s Feb. 12 order, as part of its business of transmitting and distributing electrical energy, Eversource has acquired land and easements throughout New Hampshire to establish rights of way (ROWs) on which it has built poles, wires, and supporting structures. The lease between Eversource and NPT will grant NPT the right to use certain portions of Eversource ROWs for the construction of the line, the commission added. The ROWs that are the subject of the lease are located in 19 municipalities and are principally comprised of Eversource easements deeded by private property owners and land owned in fee by Eversource.

The commission also said that the lease provides that NPT will have exclusive use of 781 acres of the easement and land rights, while about 472 acres will be designated for shared use between Eversource and NPT. There are about 74 acres of remaining land included in the lease that have not been designated for a specific use.

Eversource in November 2017 filed a settlement agreement between it, NPT, the Office of Consumer Advocate (OCA), and staff that would resolve all issues pending in the proceeding, the commission added. The settlement agreement acknowledges that Eversource and staff engaged outside appraisers to calculate the fair market value of the lease. To resolve the differences in valuation, the settling parties agreed that an annual lease payment of $460,000 represents a reasonable compromise of the factual issues, provides for fair compensation to Eversource and its customers, and is otherwise just and reasonable, the commission said.

The settlement agreement also provides that NPT will, for each year of commercial operation of the line, make an annual payment into a fund under the direction and control of the commission. The fund will be used for programs, projects, or other purposes that provide benefits to New Hampshire distribution customers, the commission added. The programs will include demand response, distributed generation, and other non-wires alternatives. The commission also said that payments will be conditioned upon continued commercial operation of the line.

The commission said that because the lease is between related companies, the commission’s affiliate transaction rules require that lease payments are based on market values.
“The record demonstrates that the lease is typical of a standard commercial lease that contains provisions designed to protect the interests of each party,” the commission said. “There was no evidence offered that questioned any terms of the lease other than the value of the property right subject to the lease.”

Regarding the annual payments, totaling $15m over the term of the lease, that NPT would make, the commission said that it considers that provision to provide a benefit directly to New Hampshire ratepayers, and finds that the creation of that benefit is in the public good.

About Corina Rivera-Linares 3235 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.