June 27, 2011 | last updated May 31, 2012 7:17 pm

Power plants work to block Northern Pass

Low-cost hydroelectric power, one of the key ingredients in a mix to lower Connecticut's energy bills, is a threat to power plants. And the owners of plants who might lose business to the hydroelectric power are fighting back.

As Northeast Utilities attempts to tap into Canada's hydropower from Quebec via a $1.1 billion transmission line, the Hartford-based utility company faces opposition beyond the not-in-my-backyard complaints about the route of the line.

Operators of New England's power plants actively oppose this Northern Pass project because the transmission line could put them out of business. And they are trying to cut off the project at its first entry point in the country — New Hampshire.

"Northern Pass represents the permanent export of jobs and economic development out of Connecticut and into Canada," said Ray Long, vice president of government affairs for NRG Energy, which operates nine power plants in Connecticut.

All power generated and brought into the region is pooled, and grid administrator ISO New England contracts with only enough generators to meet real-time demand, which typically runs between 15,000-17,000 megawatts depending on season, time of day and temperature.

If complete, Northern Pass will import 1,200 megawatts of hydropower from Quebec, a low-cost alternative compared to most non-nuclear New England power plants that produce less than 100 megawatts. Because ISO New England contracts with the lowest cost power first, the influx of 1,200 megawatts from Canada will push higher cost generators out of the market.

Electricity demand in New England is expected to increase by as much as 1,800 megawatts by 2015 — Northern Pass' optimistic in-service date — but the imported power decreases the need for domestic plants.

"Putting this power into the regional power pool will displace other power in New England," said Martin Murray, spokesman for the Northern Pass project. "Because they are in the pool, the price will be less than it would be otherwise."

The expected cost savings to New England of hydropower pushing higher cost generators out of the market will be $206 million in 2015 and rise to $327 million by 2024, according to a report by Boston consultant Charles River Associates. Connecticut's estimated savings are $37 million in 2015, rising to $59 million by 2024.

The power plants pushed out by Northern Pass will likely be those powered by natural gas, which produces higher cost electricity and typically sets the clearing price in New England, part of the reason the region's electricity prices are higher than the rest of the nation.

In times of extreme demand, the hydropower also decreases the need for peaker plants, which are high-cost, inefficient generators that only operate during high-demand times to take advantage of the increased price.

The Northern Pass power will decrease the price of electricity in New England, but government officials and regulators need to consider the all-in cost of importing a large chunk of the region's energy from Canada, said Long.

Other than cheap power, there are no ancillary benefits to the transmission line, Long said. Jobs lost from obsolete power plants will be exported to Canada. The need for research and development into new energy technologies will decrease. Lower retail electricity prices will make high-cost renewable projects such as solar and wind less economical.

Northern Pass is a joint venture between Northeast Utilities and Boston-based NStar, which is expected to merge into Northeast Utilities by the end of the third quarter. The two companies have contracted with Hydro-Quebec to provide the power along the line.

The $1.1 billion in capital cost to Northeast Utilities and NStar for the transmission will be paid by Hydro-Quebec over the course of its 40-year lease. Hydro-Quebec will recoup those expenses by selling power onto the regional grid at market price, which is lucrative for low-cost sources of generation such as hydro and nuclear.

The transmission line will run down from Canada into New Hampshire, where it will be sent out onto the rest of the New England power grid. Northeast Utilities needs federal and state approvals to install the line and will wait until the federal permission is given in 2012 or 2013 before seeking the state permit.

The project has already run into opposition from residents in New Hampshire, particularly northern New Hampshire where the utilities don't have existing right-of-way. Northeast Utilities in April scrapped its proposed map for northern New Hampshire and is working on a new submittal to the Federal Energy Regulatory Commission.

"Everybody is against it," said New Hampshire State Rep. Laurence Rappaport, R-Colebrook. "One of the concerns is that in this area, which is known for its natural beauty, to have power cords run through it."

Rappaport proposed legislation that would have prevented utility companies from using eminent domain when installing non-reliability-based transmission lines, such as the Northern Pass project. That legislation passed the New Hampshire House of Representatives but was tabled by the state Senate. Still, Rappaport is working on four more bills that would block Northern Pass in New Hampshire.

While Rappaport's base is residents concerned about having a transmission line ruin their views and their property values, he's also received support from various power plants that oppose Northern Pass. The state's four biomass plants in Bethlehem, Tamworth, Alexandria and Bridgeport, which employ 120 total workers, worked to pass Rappaport's legislation.

A lawyer from the New England Power Generators Association — made up of electric producers such as NRG, Dominion, Entergy and Constellation — helped write some of Rappaport's legislation.

The New England Power Generators Association also opposed Northeast Utilities and NStar's contract between Hydro-Quebec to provide power along the line as far back as 2009, saying the contract went against the principals of the competitive market.

The New England Power Generators Association normally don't oppose transmission lines as long as they are properly sited and don't use eminent domain; but that is not the case with Northern Pass, said Sandi Hennequin, vice president of the association.

The efforts by power plants to block Northern Pass are anticompetitive, particularly riling up residents over the so-called destruction to natural beauty and tourism industry, said Bob Clegg, president of the Small Business and Small Industry Association in New Hampshire.

"If we want more jobs in New England, cheap power is an absolute necessity," said Clegg, a former New Hampshire state senator. "Small businesses can't continue to grow their companies if the price of electricity continues to rise."

Although not considered a renewable energy source, hydroelectric power produces much less carbon than typical power plants, so using more of it will add to New England's natural beauty while decreasing the cost of electricity, Clegg said.

"That power is important to the sustainability of the Northeast power grid," Clegg said.

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