Hydro-Qubec could lose more than $500M if power export line through Maine is dropped

A new Hydro-Qubec report says the utility could lose more than $500 millionif its power export project to Massachusetts is abandoned.

All construction for the project,known as theNew England Clean Energy Corridor,has been on hold since59 per cent of Maine residents voted against it in a referendum last November.

The planned project would carry some 1,200 megawatts of electricity overa new 336-kilometrehigh-voltage transmission linebetween Thetford Mines, Que., and Lewiston, Maine.

The electricity would be sent over existing or rebuilt lines to Massachusetts for 20 years, and would reduce greenhouse gas emissions by up to 3.6 million metric tons per year the equivalent of taking 700,000 cars off the road, according to the Maine Public Utilities Commission.

The project would also generate a projected$10 billion US for Hydro-Qubec over 20 years.

But some people in Maine protested against the fact that the project requires cutting down 1,000trees,even though most of those trees had already been cleared when the project got underway in 2020.Others were opposed to a foreign companyHydro-Qubec providing power to Americans.

Now, the parent company of Hydro-Qubec's U.S. partner, Central Maine Power (CMP), is challenging the constitutionality of the referendum in the Maine Supreme Court.

In a memorandum filed in mid-February, Avangrid argues that the referendum retroactively bans a project that had received executive and judicial approval and had already led to hundreds of millions of dollars in expenditures.

Close to $1B total on the line for Quebec, U.S.

In its 2021 annual report, the Quebec Crown corporation disclosed it could lose $536 million if the project is dropped.

Of the estimated $600 million budget, $347 million has already been committed to capital expenditures for construction of the 103-kilometre line on the Quebec side.The other $189 million represents amounts that the company has committed to pay under agreements with CMP.

This sum doesn't include the $20 million spent in recent years on lobbying and advertising for the project. Hydro-Qubec also had to write off $46 million in 2019 following the failure of its first project to export power to the U.S. through New Hampshire, which had the same objectives.

Avangrid has spent $450 million US to date in Maine to clear 86 per centof the corridor and install 120 structures. This represents 43 per centof the total cost of the U.S. portion, estimated at $1.04 billion US.

No plans to abandon project

Despite the suspension of work on the project,Hydro-Qubec and Avangridsay they have no intention of letting it go anytime soon.

"We followed the process and the laws in Maine, and that process led to all the permits being obtained," saidHydro-Qubec spokespersonLynn St-Laurent.

"Once we get the green light, we start working," she said.

Last December, a Maine judgedenied Avangrid'sbid to resume construction of the power line, rejecting a preliminary injunction sought bythe utility company. In the ongoinglawsuit againstMaine's Bureau of Parks and Lands, Avangridwritesthat the referendum initiative "would render all development in the state, no matter how big or small, or its advancement, vulnerable to discriminatory legislation passed after the fact."

Opponents of the New England Clean Energy Connect made up of both energy providers such as natural gas and wind as well as environmental and citizens' groups are expected to file briefs in the coming weeks to present their arguments.

The case will be heard in May.