Hydro-Québec could lose more than $500M if power export line through Maine is dropped

A new Hydro-Québec report says the utility could lose more than $500 million if its power export project to Massachusetts is abandoned.

All construction for the project, known as the New England Clean Energy Corridor, has been on hold since 59 per cent of Maine residents voted against it in a referendum last November. 

The planned project would carry some 1,200 megawatts of electricity over a new 336-kilometre high-voltage transmission line between Thetford Mines, Que., and Lewiston, Maine.

The electricity would be sent over existing or rebuilt lines to Massachusetts for 20 years, and would reduce greenhouse gas emissions by up to 3.6 million metric tons per year — the equivalent of taking 700,000 cars off the road, according to the Maine Public Utilities Commission.

The project would also generate a projected $10 billion US for Hydro-Québec over 20 years. 

But some people in Maine protested against the fact that the project requires cutting down 1,000 trees, even though most of those trees had already been cleared when the project got underway in 2020. Others were opposed to a foreign company — Hydro-Québec — providing power to Americans.

Now, the parent company of Hydro-Québec's U.S. partner, Central Maine Power (CMP), is challenging the constitutionality of the referendum in the Maine Supreme Court.

In a memorandum filed in mid-February, Avangrid argues that the referendum retroactively bans a project that had received executive and judicial approval and had already led to hundreds of millions of dollars in expenditures.

Close to $1B total on the line for Quebec, U.S. 

In its 2021 annual report, the Quebec Crown corporation disclosed it could lose $536 million if the project is dropped. 

Of the estimated $600 million budget, $347 million has already been committed to capital expenditures for construction of the 103-kilometre line on the Quebec side. The other $189 million represents amounts that the company has committed to pay under agreements with CMP. 

This sum doesn't include the $20 million spent in recent years on lobbying and advertising for the project. Hydro-Québec also had to write off $46 million in 2019 following the failure of its first project to export power to the U.S. through New Hampshire, which had the same objectives. 

Avangrid has spent $450 million US to date in Maine to clear 86 per cent of the corridor and install 120 structures. This represents 43 per cent of the total cost of the U.S. portion, estimated at $1.04 billion US. 

No plans to abandon project

Despite the suspension of work on the project, Hydro-Québec and Avangrid say they have no intention of letting it go anytime soon.

"We followed the process and the laws in Maine, and that process led to all the permits being obtained," said Hydro-Québec spokesperson Lynn St-Laurent. 

"Once we get the green light, we start working," she said. 

Last December, a Maine judge denied Avangrid's bid to resume construction of the power line, rejecting a preliminary injunction sought by the utility company. In the ongoing lawsuit against Maine's Bureau of Parks and Lands, Avangrid writes that the referendum initiative "would render all development in the state, no matter how big or small, or its advancement, vulnerable to discriminatory legislation passed after the fact."

Opponents of the New England Clean Energy Connect — made up of both energy providers such as natural gas and wind as well as environmental and citizens' groups — are expected to file briefs in the coming weeks to present their arguments.

The case will be heard in May.