Free Press - Central Maine Power will provide $50 million over a 40-year period to help lower electricity bills for low-income residents of Massachusetts. The deal was struck as part of CMP’s application before the Massachusetts Department of Public Utilities Commission, which is considering whether to approve its $950 million electrical transmission line from Lewiston to Quebec.
The 146-mile New England Clean Energy Connect (NECEC), a joint effort of CMP and Hydro-Québec, would send 1,200 megawatts of Canadian hydro power to Massachusetts through the existing regional grid to comply with the Bay State’s renewable energy goals and replace retiring power plants.
The contract provision would allocate $1 million per year over the first 20 years of the agreement to two Massachusetts nonprofits, collectively known as the Low-Income Energy Affordability Network (LEAN), to be used for low-income energy efficiency initiatives and replacing heating equipment as well as battery storage and plug-in electric vehicle investments. Over the next 20 years, CMP would provide $1.5 million per year to benefit low-income Massachusetts ratepayers. As required in the contract, the $50 million would come out of shareholder funds, not from Maine electricity customers.
“It was a requirement in the RFP that the project addressed certain benefits for low-income customers in the state of Massachusetts,” said CMP spokesman John Carroll. “So as part of the bidding and competition we were in, we tried to make an assessment of what would be meaningful in terms of a benefit, but still be competitive in the context of us being held up against 46 different proposals and judged in terms of the economics and the benefits.”
NECEC was one of dozens of transmission proposals submitted last year in response to an RFP put out by Massachusetts and utilities to procure 1,200MW of renewable energy. If approved by Massachusetts and Maine regulators, CMP will secure a 20-year contract to provide power to Massachusetts starting in 2022, which would require the company to clear a 146-mile corridor from the Quebec border to Lewiston, crossing the Appalachian Trail and the Kennebec River Gorge, a popular whitewater rafting route. NECEC became the next in line for a contract earlier this spring after New Hampshire regulators pulled the plug on the winning bid, the utility Eversource’s controversial Northern Pass project.
Under the terms of the Northern Pass plan, which would have run through New Hampshire’s White Mountains, Eversource would have provided $10 million in funding over 20 years to support low-income energy programs in Massachusetts, much less than the $50 million offered in the CMP plan. For residents of New Hampshire, the Northern Pass plan offered a total of $211 million in benefits, including $25 million to address property value impacts on the route, $25 million to promote tourism and recreation in the affected areas, $32.5 million for economic development in the host communities, and $20 million for energy efficiency programs.
Carroll said that the NECEC will provide between $40 and $45 million a year in future energy savings for Maine when it goes online. He estimated that the energy benefits, property taxes, and wages combined will provide up to a “billion dollars in value to the state.” The company also struck a deal with whitewater rafting companies and others in northern Somerset County where the transmission line would cross Kennebec Gorge to provide $22 million for tourism-related programs.
“Massachusetts is paying for the project and as an added benefit to them, they’ll get $50 million over 40 years,” said Carroll. “Maine isn’t paying for this project and over the first 10 years that’s a billion dollars worth of value. In the very first year, between property taxes and energy prices alone, it’ll be almost $60 million alone. It’ll be more than Massachusetts gets.”
An analysis commissioned by the Maine Public Utilities Commission by the Boston-based firm London Economics found that NECEC would reduce annual CO2 emissions by 3.6 million metric tons while providing $346 million in wholesale electricity benefits during its first 15 years in operation. It also estimated that it will create over 1,600 construction jobs during the four-year construction period, increasing state GDP by $98.2 million. Carroll noted that the discrepancy in electricity cost benefits between the PUC analysis and the CMP analysis was a difference in how they projected future natural gas prices.
Multiple efforts to reach the Public Advocate Barry Hobbins were unsuccessful, but he expressed outrage about the NECEC deal to the Portland Press Herald two weeks ago.
“It’s pretty insulting that Massachusetts is going to receive these benefits for low-income customers and Maine hasn’t been offered anything,” he told the Press Herald. He added that he will try to get a better deal for low-income Mainers in the NECEC. “It should be no less than what CMP agreed to in Massachusetts. Not a penny less.”
Two weeks ago, the Massachusetts Department of Energy Resources staff recommended approving the contract with CMP, stating that the procurement of hydro power will result in approximately a 2- to 4-percent reduction in monthly electric bills, lead to more than half of the energy consumed by Massachusetts being generated from renewable power, and be “particularly beneficial” in the winter months when energy prices spike due to a reliance on natural gas for heating and electricity.