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Hydro-Québec sweetens 1,200-MW transmission line deal with Maine

Энергия | Energy Transition

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Hydro-Québec sweetens 1,200-MW transmission line deal with Maine

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Power would be sold at $4.00/MWh discount

Project faces November ballot initiative

New York — Maine Governor Janet Mills said that Hydro-Québec has signed a binding commitment to sell power directly into Maine at a discounted price via the controversial New England Clean Energy Connect transmission line.

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"I have heard people say that the NECEC will deliver power directly to Massachusetts but not to Maine," Governor Mills said in a July 10 statement. "With this new commitment, we ensure that Maine consumers access power directly from the line at a discounted price," Mills said.

The $950 million project is a partnership between Iberdrola subsidiary Avangrid and Hydro-Québec that would transport 1,200 MW of Canadian hydropower through Maine into Massachusetts and the New England power grid.

The transmission line is opposed by local power producers, some environmental groups and local residents who claim the project would not provide enough benefit to Maine. Opponents gathered enough signatures to add an initiative to the November ballot that seeks to allow voters to say whether or not they support the power line.

The new agreement between Maine and HQ is intended to guarantee that Mainers directly benefit from the large transmission line that would run through their state.

Under the commitment, HQ will sell 500,000 MWh per year of hydropower to Maine via NECEC at a discount of $4.00/MWh, according to the statement.

To implement the commitment, the Governor's Energy Office and HQ will finalize one of these options: a 20 year power purchase agreement with one or more Maine Buyer(s) at the discounted price; or if a power purchase agreement is not agreed, HQ will pay a total of $40 million in installments over 20 years to an entity designated by the GEO that ensures benefits to Maine retail energy customers, the statement said.

The delivery point for the power would be the southern terminus of the transmission line at Larrabee Road substation in Lewiston, Maine, according the agreement.

The contract price for energy would be an index price minus $4.00/MWh, according to the agreement.

The index price means the ISO New England day-ahead locational marginal price at the Larrabee Road substation, and in the event that the index price is negative during an hour, "the seller shall be under no obligation to deliver energy during such hour," the agreement said.

The three-year average day-ahead price at the ISO-NE Maine hub was $33.50/MWh, and year-to-date the average day-ahead price at that location has been $20.02/MWh, according to ISO data.

The day-ahead Maine Hub price during the afternoon of July 13 was $28.43/MWh according to ISO-NE.

Request answered

The commitment from HQ came after Governor Mills wrote to the president and CEO of Hydro-Québec on March 6 "to convey that, despite NECEC's benefits, many Maine people have expressed concern that the power to be transmitted across western Maine will go to Massachusetts and not directly to Maine consumers," the statement said.

Mills said in the letter that not all of the electricity transmitted over the power line will be needed to fulfill HQ's contractual commitments to Massachusetts "and that any such power not delivered for this obligation could instead be redirected to Maine."

The agreement with Massachusetts electricity distributors is for a 20-year supply of baseload hydropower that works out to approximately 9.45 TWh/year.

The new commitment from HQ builds on a $258 million stipulation negotiated last year with several parties, including the Office of the Public Advocate and the Industrial Energy Consumer Group with the assistance of the Mills Administration, the statement said.

As part of that agreement, HQ has committed to rate relief in the form of $140 million in installments over 40 years, $10 million for the installation of high efficiency air source heat pumps and $10 million for the Hydro-Québec EV Fund to facilitate deployment of fast charging infrastructure in Maine.

The new deal struck between Maine and HQ accelerates the start of those payments to begin upon the issuance of final permits rather than the commercial operation date, the statement said.

The agreement requires approval from the Maine Public Utilities Commission.