Forward New Hampshire Plan Will Benefit Ratepayers – New England Ratepayers Association

New England Ratepayers Association

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Forward New Hampshire Plan Will Benefit Ratepayers

Eversource recently announced the Forward New Hampshire Plan, comprising an amended route and technology changes to its Northern Pass Project, which will import hydroelectricity from Canada. Making concessions to project opponents, Eversource proposes burying an additional 52 miles of transmission line underground—40 miles of which passes through sensitive areas in the White Mountain National Forest. It also apportions 100 MW of power directly to New Hampshire consumers to answer criticism that New Hampshire ratepayers will not directly benefit from Northern Pass power. Finally, it provides $200 million in “incentives” to dampen the contentiousness of some Northern Pass opponents. The additional burial also requires a technology change to HVDC Light, which has a more limited capacity, and as a result the project will unfortunately be down-rated from 1200 MW to 1000 MW—a 17% reduction.

The high cost of electricity to New England’s businesses and families has been well-documented. As a region, we have the highest electricity costs in the United States.  The (often premature) retirement of coal, nuclear and oil-fired electricity generation in New England has left the region short on options for baseload power and over-reliant on natural gas-fired generation.  This overreliance is exacerbated by the fact that New England has insufficient pipeline capacity to meet the demand of natural gas generators—especially during winter when most of the firm capacity for natural gas is committed to local distribution companies for home heating.

However, natural gas generation still sets the wholesale market price for electricity 80% of the time. When coupled with an electricity market that hasn’t induced any natural gas generators to subscribe to firm capacity from any of the proposed pipeline projects, extreme price volatility follows.  Liquefied natural gas imports provided some relief this past winter, but we still had weeks with wholesale electricity prices exceeding $150 per MWh—triple the norm.  LNG is not a long-term solution, because at any time changes in the global marketplace could redirect tankers to Europe or Asia instead of New England. It’s no surprise that ISO-NE, the independent operator of the region’s electrical grid, has repeatedly warned about our overreliance on natural gas and the need for additional infrastructure for new sources of supply.

By 2019, the “new” Northern Pass is expected to compensate for some of the scheduled retirements, and should provide ratepayers some relief, at least in the capacity markets. The current capacity market will see New England’s ratepayers pay an additional $1.5 billion in capacity payments to electricity generators in 2016-2017—a total that is expected to escalate to $3.5 billion for 2019-2020. Another 1000MW will help reduce the impact of these costs.

Northern Pass opponents frequently cite projects like New York’s Champlain-Hudson Power Express (CHPE) and Vermont’s New England Clean Power Link (NECPL) when questioning why Eversource doesn’t “bury it all or not at all”.  However, these comparisons aren’t apples-to-apples, as each of those projects has significant portions of its route buried underwater, which is far less expensive than underground burial.  What’s more, despite both of these projects being in development for years, neither has secured a transmission agreement like the Northern Pass commitment with Hydro-Quebec.

While Northern Pass addressed the major concerns that the U.S. Department of Energy had regarding the visual impacts of overhead transmission lines through the White Mountain National Forest, it is already clear there are continuing objections. Some object to the sections of the route that continue to utilize overhead lines, and others claim large-scale hydro as a threat to heavily subsidized, uneconomical small-scale renewables, such as solar and wind.

Unfortunately, decades of myopic energy policies have led us down this road of high electricity costs, with only two viable options for new base load supply—natural gas and large-scale hydropower.  Both are going to require significant infrastructure development in the form of natural gas pipelines and electric transmission lines, and both will need to overcome shortsighted opposition and competing special interests.

A perfect solution to our region’s energy demands that will please everyone does not exist, but the New Hampshire Forward Plan and Northern Pass are necessary to address wholesale electricity prices that have climbed 55% and 13% respectively the past two years. Can the New Hampshire economy really afford to wait any longer for some relief?

It’s extremely difficult to accurately calculate the savings that a project like Northern Pass will provide ratepayers.  What we do know is that on days like the one we had last week, when electricity demand reached 22,000 MW, and prices spiked to over $300 per megawatt-hour, Northern Pass could provide 1000 MW of urgently needed baseload power—whereas wind, despite billions in costs and ratepayer subsidies , provided nothing.

Marc Brown is the Executive Director of the New England Ratepayers Association, a nonprofit dedicated to protecting ratepayers.

(A version of this column originally appeared at Seacoast Online.)

Updated: November 29, 2016 — 9:34 am

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