Mass. Hydropower Project Stymied By Maine Ballot Question Dispute

The project that would provide New England with its largest source of renewable energy and Massachusetts with about a fifth of its electricity demand is at the center of a simmering political and legal fight taking shape in Maine.

New England Clean Energy Connect, a 145-mile transmission project of Central Maine Power Company, is expected to link the electrical grids in Quebec and New England to provide cleaner and more reliable hydropower directly to a converter station in Lewiston, Maine, and into the regional power grid.

This week, CMP's parent company filed a lawsuit against the state of Maine claiming a ballot question that project opponents got on the November ballot to overturn a key permit approval is unconstitutional. That suit came days after the Maine Supreme Judicial Court ruled in a separate case that contested signatures turned in by project opponents were valid.

Bay State utilities and Gov. Charlie Baker's administration chose the project to help Massachusetts meet its statutory requirements to increase renewable energy supplies after their first choice — the Northern Pass project through the White Mountains of New Hampshire — was stymied by regulators there.

If the project comes to fruition Massachusetts ratepayers could see their electric rates drop between 2 and 4 percent each year under contracts already approved by the Massachusetts Department of Public Utilities. The Bay State estimates a savings of $3.9 billion over the 20-year life of the contracts.

Mainers opposed to the NECEC argue that the project is run by a foreign company — Avangrid parent company Iberdrola, a Spanish utility giant — and will benefit Massachusetts at the expense of Maine's natural resources and beauty, and will provide no meaningful reduction in pollution. A group called Say NO to NECEC turned in enough signatures earlier this year to put before voters in November the question of whether to reverse the Maine Public Utilities Commission's May 2019 approval of the NECEC.

The Maine Department of Environmental Protection earlier this week issued the final state permit needed for construction of the project to move ahead and executives at CMP parent company Avangrid have told investors that they are on track to begin work this summer.

"The clean energy corridor is projected to inject more than $570 million in the Maine's economy to deliver high-quality jobs for Mainers. Pending the necessary permits and an assessment of the potential of a referendum, we will be in a position to start construction in the third quarter of 2020 and to start operation by the end of '22," Avangrid CEO James Torgerson told investors April 29, according to a transcript of the company's first quarter earnings call.

Avangrid's lawsuit was filed Tuesday in Cumberland County against Maine Secretary of State Matthew Dunlap, and has the support of the Maine State Chamber of Commerce and a manufacturing industry association.

"Why don't we change the sign in Kittery from 'Welcome Home' to 'Maine: Where permits mean nothing and referenda are every Tuesday.' You can't run a society by referendum," Tony Buxton, counsel for the Industrial Energy Consumers Group, said.

Say NO to NECEC, the group that turned in more than 75,000 signatures to get the permit repeal question on the November ballot, said the lawsuit is another tactic from a group of for-profit interests that have already spent millions of dollars to put down local opposition.

"This is just CMP's latest stunt to try and keep the people of Maine from having a say over their for-profit corridor project. It's ludicrous for a foreign company to go to such lengths and expense to silence 66,000 Mainers who signed petitions to make this referendum a reality," Sandi Howard, director of Say NO to NECEC, said. "The bottom line is that the people of Maine deserve the right to decide what goes through their back yards, and this November, they will have that opportunity."

The lawsuit claims the referendum has two "fatal constitutional flaws:" first, that it goes beyond the legislative power provided to the people under the state Constitution by attempting to overturn one single agency decision rather than an act of the state Legislature. The second argument is that it violates a separation of powers provision of the Maine Constitution by seeking to disrupt an executive branch function and also a judicial decision that upheld that action through an appeals process.

Thorn Dickinson, CEO and president of the NECEC Transmission, LLC, likened it to an initiative to revoke the permit for one single lobsterman while leaving the rest of the lobster industry unaffected.

"If this referendum is put on the ballot, any decision by a court or agency could be arbitrarily overturned after the fact," he said. "It will create a dangerous precedent that allows special interests to manipulate voters in overturning decisions made by local and state regulators and Maine courts. This creates uncertainty and threatens individual rights of fairness under the law."

Avangrid's lawsuit came on the heels of a Maine Supreme Judicial Court ruling last week that upheld the validity of signatures Say NO to NECEC turned in to qualify its question for the ballot. That suit revolved around whether certain signatures should have been thrown out because the notaries public who signed off on some signature forms also performed non-notary services for the signature-gathering campaign.

"We are challenging it for a lot of good reasons. We found what we believe are a lot of irregularities," Torgerson, the Avangrid CEO, told investors late last month. "People doing notary public work when they're also doing work for the campaign to push the referendum. So we feel we have a good case."

Ultimately, the court cleared the way for the referendum to go to voters in November with a ruling that the secretary of state acted properly in validating the signatures.

While the referendum fight plays out in the Maine courts, the NECEC project is not fully out of the woods just yet.

The transmission project still must be certified by the U.S. Army Corps of Engineers and must obtain a Presidential Permit from the U.S. Department of Energy because it connects across the border into Canada. And the regional grid operator — ISO-New England — also gets a say before the project can get fully underway.

Torgerson said during Avangrid's investor call late last month that the Army Corps approval is expected in early third quarter, roughly 90 days after the Maine DEP final decision, which came May 11. He said the ISO-New England approval is expected by the end of the second quarter of 2020. The Presidential Permit, he said, is expected to be issued approximately 60 days after the Army Corps and ISO-New England approvals.