As construction costs balloon, Mass. hydro transmission project set to restart in August

Construction on the revived transmission project expected to tap into Quebec hydroelectric power to benefit Massachusetts will resume next week. The project's price tag — which Bay State utility customers are on the hook for — has ballooned to $1.5 billion, project officials said.

The New England Clean Energy Connect project developed by Avangrid is viewed as essential to Massachusetts' clean energy goals. But it has been frozen since Maine voters in 2021 approved a ballot question retroactively banning its construction. A Maine court brought the project back to life this year, and Avangrid officials said construction is slated to resume Thursday with work related to a substation in Lewiston.

Avangrid CEO Pedro Azagra told investors in a conference call Thursday that the cost of the transmission corridor has grown from $950 million to an estimated $1.5 billion, with $638 million already spent.

He highlighted efforts to renegotiate the price Avangrid will receive from Massachusetts utilities and ratepayers for New England Clean Energy Connect, and to get some flexibility to delay the line's operational date.

"We also have two new positive developments. First, the Massachusetts House and Senate have included legislation supporting cost recovery for change of law, the referendum cost, in a budget bill. And second, we have an agreement to extend the commercial operations date for the change in law delay, if needed," Azagra said. "We continue our discussions regarding price adjustments for the change of law costs."

The House and Senate both approved language in a supplemental budget, clearing the way for contract renegotiations to "allow recovery for such expenditures and payments that the [Department of Public Utilities] determines to be associated with the subsequent construction delay." But that provision remains in limbo as the branches bicker over procedural steps and other differences in those bills.

Last week, a top House energy official said the language was necessary "to make sure that this project happens" and downplayed the impact the higher price tag will have on ratepayers.

"What we anticipated when this line was originally proposed and approved was that residential customers were going to see monthly savings of $2.64," state Rep. Jeff Roy, who co-chairs the Legislature's Telecommunications, Utilities and Energy Committee, told the News Service last week. "Given these updated costs, the residential customers are going to see around $2 per month savings. So it's a reduction in the cost savings, but it's not going to be additional costs to the consumer."