Maine regulators grant approval to CMP for NECEC

NextEra Energy Resources, LLC on May 7 filed with the commission a notice, stating that it appeals the commission’s order granting the CPCN to CMP for the NECEC

The Maine Public Utilities Commission, in a May 3 order, issued a certificate of public convenience and necessity (CPCN) for the New England Clean Energy Connect (NECEC) project, finding that construction and operation of the project is in the public interest.

The commission said that it also approves a stipulation that was filed in the proceeding (Docket No. 2017-00232) in February and is supported by the Office of the Public Advocate (OPA), Governor’s Energy Office (GEO), Industrial Energy Consumer Group (IECG), Conservation Law Foundation (CLF), Acadia Center, Western Mountains and Rivers Corporation (WM&RC), City of Lewiston, the Maine Chamber of Commerce (Chamber), International Brotherhood of Electrical Workers Local Union 104 (IBEW), and Friends of Maine Mountains (FMM).

As noted in the order, the NECEC will allow for up to 1,200 MW of hydropower to be delivered to New England from Québec, Canada. The core project elements are:

  • Transmission line equipment – a new 145.3-mile, +/-320-kV HVDC transmission line from the Canadian border to a new converter station on Merrill Road in Lewiston; and a new 1.6-mile, 345-kV AC transmission line from the new Merrill Road converter station to the existing Larrabee Road substation
  • Substation equipment – the new 345-kV AC to +/-320-kV HVDC 1,200-MW Merrill Road converter station; and an additional 345-kV AC transmission line terminal at the existing Larrabee Road substation

Proposed route

The NECEC’s proposed route is on private land that Central Maine Power (CMP) owns or controls, including existing corridors for more than half its length. The commission added that the proposed corridor for the new HVDC transmission line portion of the NECEC extends about 145.3 miles from the Québec-Maine border at Beattie Township, in northern Franklin County, to the Larrabee Road substation in Lewiston. The project also includes upgrades to existing AC network facilities in various locations on CMP’s existing transmission system.

The commission added that the northern portion of the HVDC line is proposed to be built in currently undeveloped corridor primarily traversing commercial forest land, and the remainder of the corridor will be built within the undeveloped width of existing transmission corridors. The corridor begins in western Maine in Beattie Township (Franklin County) and extends southeast for about 4.5 miles across Beattie Township, touches the southwest corner of Lowelltown Township (Franklin County) and then extends easterly about 27 miles across Skinner Township (Franklin County), then across Appleton Township, Raytown Township, Hobbstown Township, Bradstreet Township, and across the southwest corner of Parlin Pond Township (all in Somerset County), the commission said.

From that point, the corridor crosses onto Johnson Mountain Township extending southerly about 6.5 miles over the approach to Coburn Mountain and into the valley between Coburn Mountain and Johnson Mountain and then turning east for about 2.5 miles to U.S. Route 201, the commission said, adding that between the border and U.S. Route 201, the corridor is a 300-foot wide parcel.

The 300-foot wide corridor continues south across West Forks Plantation about 43⁄4 miles to the Kennebec River and the West Forks Plantation/Moxie Gore line (all in Somerset County). The commission added that from the Kennebec River, the 300-foot wide corridor extends about 49 miles southeast across Moxie Gore and the Forks Plantation to the intersection with an existing transmission corridor near the Lake Moxie Road. The remaining section of the NECEC will be built on the existing corridor, the commission said.

Project cost/permitting

In a statement provided to TransmissionHub on May 8, Thorn Dickinson, vice president of business development for AVANGRID (NYSE:AGR), which is the parent company of CMP, said that the project’s estimated total cost is $950m, with construction expected to begin next year and “hopefully be done by the end of 2022.”

The commission said in its order that the project’s costs will be paid for entirely by H.Q. Energy Services (U.S.) Inc., and the electric distribution companies in Massachusetts (MA EDCs).

The NECEC is a component of a bid prepared jointly by CMP and Hydro Renewable Energy Inc., (HRE), an affiliate of Hydro-Québec, that was submitted in response to a request for proposals (RFP) issued by the MA EDCs under Section 83D of the 2008 Massachusetts Green Communities Act.

The contractual arrangements underlying the NECEC include power purchase agreements (PPAs) between HQUS – the successor to HRE – and each of the purchasing utilities in Massachusetts and transmission services agreements (TSAs) between CMP and the MA EDCs, as well as between CMP and HQUS, the commissions added. The PPAs and TSAs were filed for approval with the Massachusetts Department of Public Utilities (DPU) in July 2018, the commission said, noting that the DPU proceedings are ongoing. CMP filed the TSAs for approval by FERC, which, on Oct. 19, 2018, accepted the TSAs to become effective Oct. 20, 2018.

The PPAs are for different amounts of capacity, totaling 1,090 MW of the 1,200-MW capacity of the NECEC, and all extend for a 20-year term, the commission said.

There are seven different TSAs with CMP, three corresponding to the capacity and term of the PPAs with the MA EDCs. The commission added that three additional TSAs correspond to the capacity of the PPAs with the MA EDCs, but are between CMP and HQUS for years 21-40 of the expected life of the NECEC line. The final TSA is a 40-year agreement between CMP and HQUS for the remaining 110 MW of the line, the commission said.

Dickinson said that the project still needs to obtain a presidential permit, and that in Maine, approvals for the project are needed from the Land Use Planning Commission, Department of Environmental Protection, and the U.S. Army Corps of Engineers.

Stipulation

The commission said in its order that in addition to the wholesale electricity price reductions that will result from the NECEC, the project will also enhance system reliability and fuel security within Maine and the ISO New England (ISO-NE) region.

The provisions of the NECEC stipulation augment the benefits that will be realized by Maine ratepayers, communities, and the environment by funding mechanisms and programs to provide rate relief to Maine ratepayers, benefits for low-income customers, and support for various programs intended to benefit Maine communities and the environment.

The commission said that the effects of the project on scenic and recreational values, as well as the associated impacts on tourism and the economies of communities in proximity to the project, will be adverse, but that when those adverse impacts are balanced against the ratepayer, economic, and environmental benefits of the NECEC, the commission finds that those adverse effects are outweighed by the benefits.

Among other things, the commission noted that the major provisions of the stipulation include the issuance of a CPCN for the NECEC and a set of CPCN conditions that contains benefit provisions in various categories. The commission said that the stipulation provides, for instance, that:

  • Maine transmission and distribution customers are not to be responsible for any portion of the revenue requirement for the project during at least the first 40 years of its useful life
  • Effective with the 2019 transmission rate change, CMP will provide a one-time credit for RNS and LNS transmission customers of $1.005m, which represents the amounts paid in rates by transmission customers for those portions of the transmission corridor held by CMP that have been included in FERC Account 105 for Plant Held for Future Use
  • Effective with the NECEC commercial operations date (COD), a $140m rate relief fund will be established to provide per kilowatt hour rate relief for CMP’s retail customers
  • There will be two electric vehicle (EV) funds, including the $10m Hydro-Québec EV Fund, which will be funded through five payments of $2m annually from HQUS beginning on COD and be used to fund the deployment of a statewide fast and ultra-fast public charging infrastructure network for EVs in Maine
  • CMP and NECEC will participate in all ISO-NE studies to determine the thermal, voltage, and stability ratings for the Surowiec-South interface, as well as advocate to maximize its stability rating and the total transfer capacity

Notice of appeal

NextEra Energy Resources, LLC on May 7 filed with the commission a notice, stating that it appeals the commission’s order granting the CPCN to CMP for the NECEC.

NextEra claims that the commission’s order was not supported by substantial evidence, contrary to the law, arbitrary, capricious, and an abuse of discretion, for, but not limited to, such reasons as:

  • The commission failed to require CMP comply with then applicable 35-A M.R.S.A. § 3132(2-C) (2013), repealed by P.L. 2017, ch. 201, § 3 (effective Nov. 1, 2017), which required CMP’s petition include the results of an independent, third-party investigation into the use of non-transmission alternatives (NTAs)
  • The commission failed to apply 65-407 C.M.R. ch. 330, § 9(B) (2012), which requires the commission consider whether the proposed transmission line is reasonable compared to the other alternatives
  • The commission’s conclusion that the NECEC will provide benefits to Maine is not supported by substantial evidence

In its order, the commission said, for instance, that it concludes that because there is no NTA that can feasibly substitute for the NECEC, the statute does not require that an independent analysis of the costs of potential NTAs be conducted. Noting that the purpose of the NECEC is to transmit hydroelectric generation from Québec to New England to meet the requirements of the MA EDCs, the commission said, “Thus, no NTA, whether large-scale generation, distributed generation, demand response resource, or conservation alternative, can replace the NECEC.”

The commission also noted in its order that NextEra asserts that any energy benefits from the NECEC are speculative and limited in time. According to NextEra, the commission said, the flexibility of the contract delivery terms with the MA EDCs can affect when and how much energy flows over the NECEC, which, in turn, impacts whether and how much of the claimed energy price suppression benefits will be realized.

The commission noted that HQUS has contractually committed to provide, and the MA EDCs have committed to purchase, 9.45 TWh of energy per year for 20 years to be delivered over the NECEC. Given the available capacity of the NECEC, that obligation will require energy to be delivered at a very high capacity factor, the commission said, adding that to ensure that it meets its contractual obligations, HQUS can be expected to participate in the market as a price-taking resource – i.e., submitting a low- or zero-price bid, and taking the clearing price in all hours.

“It is clear that the injection of such a large quantity of price-taking energy into the Maine Zone will have a materially beneficial effect on energy prices in Maine,” the commission said.

Representatives for CMP and the commission could not be immediately reached for comment on May 10.

About Corina Rivera-Linares 3058 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.