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October 28, 2013

NU’s $338M CT transmission line shelved

Contributed Photo Northeast Utilities' power transmission lines linking Norwalk and Middletown.

The most Connecticut-centric segment of Northeast Utilities' planned $1.5 billion transmission project for southern New England has been put on hold, slowing the creation of potentially hundreds of new construction jobs in the state.

NU is in the midst of its New England East West Solutions (NEEWS) transmission initiative, a series of four projects designed to move electricity more reliably, quickly, and cheaply around Connecticut, Massachusetts, and Rhode Island.

Three of those four projects are either complete or underway, but the fourth — the Central Connecticut Reliability Project — has been shelved as industry officials re-evaluate its need for Greater Hartford.

“All these improvements have the idea of improving reliability,” said Frank Poirot, NU transmission spokesman.

Transmission lines are a vital part of the electric grid, carrying power from generating plants to local distribution systems, which then distribute electricity to homes and businesses.

As power plants are built and decommissioned, however, and local electricity demand shifts and grows as communities develop or shrink, the current transmission system is not always in line with today's electricity needs.

The NEEWS initiative was planned and approved by grid administrator ISO New England so electricity could flow more easily and cost-effectively from power plants to end users via fewer connections.

The main component of the NEEWS projects is the installation of 345-kilovolt transmission lines. The projects also include upgrades to substations and improvements to the region's electric system.

The Central Connecticut Reliability Project (CCRP) planned to install a large 345-kilovolt transmission line stretching from Thomaston to Bloomfield. The original construction estimate was $338 million, and NU hoped to have the line in service by 2015.

However, after the economic downturn struck and the growing need for electricity in the region slowed, ISO decided to review the NEEWS initiative to make sure the projects still were needed for reliability.

While the other NEEWS projects moved forward, CCRP was held back because ISO is doing an expanded study of the Greater Hartford region, trying to forecast its future electricity needs and how the system can best serve those needs, said ISO spokeswoman Lacey Ryan.

The first half of that Greater Hartford study is expected in late 2013/early 2014, detailing the needs of the region. Then ISO will begin the second half, determining whether the solutions to those needs will include CCRP or not, Ryan said.

Because the project is in limbo, NU is unsure when it will start or end, or if the original $338 million construction estimate will increase or decrease, Poirot said.

“Until we have a clearer idea of what we are bidding, we won't even have a construction estimate,” Poirot said.

The delay on CCRP slows the hiring of contractors, subcontractors, and hundreds of workers. Another NEEWS project — the $718 million Greater Springfield Reliability Project in northern Connecticut/southern Massachusetts — employed more than 1,000, including line workers, electricians, equipment operators, project management positions, and general construction positions.

GSRP started back in December 2010 and is expected to be completed this year. The project strung a 345-kilovolt transmission line from Bloomfield to East Granby to Suffield to the Massachusetts border, where it linked through West Springfield to Ludlow.

GSRP also included restoration work on substations and existing facilities. Much of the Connecticut work is done, Poirot said, and the remainder in Massachusetts is on schedule.

“The line that we upgraded in Connecticut is in-service now,” Poirot said.

The other NEEWS project that includes work in Connecticut — the $218 million Interstate Reliability Project — began in October with substation work in Lebanon. The new 345-kilovolt line will link east and north to the Rhode Island border. From there, NU's partner on the NEEWS projects, National Grid, will string the line through northern Rhode Island to Millbury in central Massachusetts.

“The Interstate work will be in full swing later this year or early next year,” Poirot said.

NU expects IRP to be in service in late 2015.

Transmission projects are a significant revenue stream for utilities, and building new lines has been a major NU initiative for the past 10 years. Utilities earn a regulated percentage profit on their transmission and distribution systems — their main sources of revenue — and transmission lines tend to have higher value and equity returns.

In addition to partnering with National Grid to take the lines into its territory, NU signed an ownership agreement with New Haven utility parent UIL Holdings for the Connecticut segments of the projects. UIL gave $60 million to NU in exchange for 8.4 percent ownership of the transmission lines in Connecticut.

As the NEEWS projects finish their various construction cycles and as ISO completes its Greater Hartford needs assessment, NU expects to have more transmission-related news. “We will have more announcements by later in the fourth quarter,” Poirot said.

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Four NEEWS utility projects

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