$1B Canadian hydropower transmission project to be renegotiated due to cost increases

Partners on a $1 billion project aimed at bringing Canadian hydropower to the New England power grid are trying to sort out how cost increases during lengthy litigation will be shared, in hopes of getting the stalled project moving.

A provision in a spending bill being considered Thursday by the Massachusetts House would open the door to a renegotiation of the transmission project between the developers and Massachusetts utilities. The original contract called for the project to be funded entirely by Massachusetts ratepayers; negotiations would determine how any additional costs would be shared.

Lauren Diggin from the Massachusetts Department of Energy Resources said she was thankful to the House for including language needed to jumpstart the so-called New England Clean Energy Connect.

“Completion of the NECEC line is important for Massachusetts customers. This project will help stabilize our electric rates, provide clean, reliable winter energy supply, and reduce the state’s emissions,” Diggin said a statement.

The bill must still be approved by the Massachusetts Senate and signed by Massachusetts Gov. Maura Healey before becoming law.

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The state of Maine lifted its stop-work order nearly two months ago but construction has not yet resumed on the project, which has had a tortured history despite being backed by sitting Republican and Democratic governors in Maine, and clearing every regulatory hurdle.

The final obstacle was a lawsuit by developers over a Maine referendum in which 59% of voters rebuked the project, causing construction to halt.

In April, a jury in Maine ruled that developers, Central Maine Power’s corporate parent and Hydro-Quebec, completed enough work to have a vested rights to finish the project. A month later, the Maine Department of Environmental Protection restored permits for the project.

But construction remains on hold, for now, as construction costs have grown during the delays for the project, which was supposed to be operational this year. The amount of the cost increase is unclear.

Avangrid, CMP’s parent, declined comment. A Hydro-Quebec spokesperson said work has resumed at an electrical converter site and that crews are being mobilized for transmission line work on the Canadian side of the border.

Avangrid and Hydro-Quebec partnered on the project to build a power line to serve as a conduit for up to 1,200 megawatts of Canadian hydropower with a goal of meeting green energy goals in Massachusetts. That represents enough electricity for about 1 million homes.

While the project was conceived by Massachusetts, supporters say the project will stabilize supply and reduce rates for all consumers in the region while representing a bold move in the battle against climate change. The renewable energy from Canada represented the equivalent of removing 40% of cars and trucks from Maine roads, supporters said.

The 145-mile power transmission line would stretch from Lewiston, Maine to the Canadian border, mostly following existing utility corridors. The fight was over a new, 53-mile section that had to be carved through the woods of western Maine.

Construction was well underway before being halted by the referendum.

The regional power grid operator was supportive of the project, stating previously that the region’s “ambitious climate goals will require building significant amounts of new infrastructure.”