Hydro-Québec’s plans to ramp up electricity exports keep running up against the NIMBYs.
The provincially owned utility has a $10-billion deal to sell a big chunk of its existing energy surpluses to Massachusetts over 20 years and has its eye on a similar agreement with New York. But Hydro-Québec and its U.S. partners have been stymied in their attempts to gain approval for the transmission lines needed to transport all that additional power across the border.
In July, New England-based Eversource Energy pulled the plug on its proposed Northern Pass transmission line after the New Hampshire Supreme Court rejected the company’s appeal of an earlier regulatory ruling that blocked the project. The U.S. utility, which had partnered with Hydro-Québec on the US$1.6-billion line, had sunk US$318-million into the project before pulling out in the face of relentless regional opposition.
A similar fate could now await Hydro-Québec’s Plan B, the New England Clean Energy Connect (NECEC) project that the Quebec utility is developing in partnership with Central Maine Power. The proposed US$950-million line cleared one hurdle last week, when Maine’s Land Use Planning Commission ruled that the NECEC met state land-use standards. However, the project still needs several additional approvals, including a presidential permit, and opponents in Maine are fighting to force a statewide referendum on the new line.
“This project would be a bad deal for Maine and cause irreparable damage to the largest contiguous temperate forest in North America,” the Natural Resources Council of Maine stated after last week’s decision by the land-use commission. “Mainers have made it clear they believe that with no verifiable reduction of carbon pollution, the project is simply not worth the enormous damage that would be done to Maine’s forests and wildlife.”
Hydro-Québec has been banking on higher export revenues to more than double its profits over the next decade. In its five-year strategic plan, tabled in December, the provincial Crown corporation set a net-income target of between $3.3-billion and $4.2-billion by 2024.
In the first nine months of 2019, however, Hydro-Québec’s profits sank 13 per cent from the same period in 2018 to $2.24-billion, in part because of lower prices in the U.S. spot market. Hydro-Québec has sought to lock in higher prices by signing long-term supply contracts. But those deals can’t be realized without increasing cross-border transmission capacity.
The $2-billion deal Hydro-Québec signed last week with New Brunswick Power to sell 47 terawatt-hours of additional power to the Maritime province over the next two decades is a small consolation for the billions of dollars the Quebec utility has had to forgo because of its inability to win speedy approval for new cross-border transmission lines.
NB Power and Hydro-Québec undertook to begin discussions on the construction of additional interconnections between their two home provinces in order “to increase electricity exports to Atlantic Canada and the United States.” While that might open up alternative export channels for the Quebec utility, it is unclear how seriously it is considering the idea. A more direct route south through New Hampshire, Vermont or Maine would likely be less costly.
Business groups and Maine Governor Janet Mills, a Democrat, support the NECEC. But that may not be enough to overcome the groundswell of opposition from local residents, who consider the lines a form of visual pollution, and regional and national environmental groups.
While Hydro-Québec touts itself as a green energy provider, environmentalists argue that any new transmission capacity from Canada would encourage the development of new hydroelectric projects that they claim destroy ecosystems and negatively impact local Indigenous populations. Environmentalists insist that New England can replace natural gas- and coal-based electricity with solar and wind power and by encouraging energy conservation.
After a meeting this week with Newfoundland and Labrador Premier Dwight Ball, Quebec Premier François Legault reiterated his desire to begin formal talks on the joint development of the 2,250-megawatt Gull Island project in Labrador. But opposition to Canadian hydro power south of the border, and lingering bitterness in Newfoundland over the one-sided (in Quebec’s favour) 1969 Churchill Falls contract, would likely doom any such talks before they got started.
Quebec and Newfoundland reached a tentative deal in the late 1990s to develop the site, but the project quickly became a victim of politics and changing market conditions. Newfoundland decided to go it alone on the much-smaller 824-megawatt Muskrat Falls generating station. But that project, with its underwater transmission lines that bypass Quebec, has gone way over budget – the current cost estimate is $12.7-billion – and lacks customers for its surplus power.
For Hydro-Québec, the New Brunswick deal may be as good as it gets for quite a while.