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 October 10, 2013
Keystone XL's not the only cross-border energy fight

 In New Hampshire's northernmost reaches, locals are proving there's more than one way to overheat a presidential permit for a major energy project.

On one level, it's an old story: A huge utility wants to build a multibillion-dollar transmission project, but not-in-our-backyard locals want none of it. The ground war goes on for years in quirky places -- high school gyms, street corners, taverns -- until state and federal regulators exhaust the democratic process and hand down important decisions.

But in the Great North Woods, the struggle is taking place with typical stern-faced Yankee flair in a region that's home to Dixville Notch, where the first presidential ballot is cast every four years. There are also lesser-known attractions nearby, like the 1,000-mile "Ride the Wilds" all-terrain-vehicle trail system and the annual Moose Festival in late August.

Inflamed locals here are fighting a proposed 187-mile power line called the Northern Pass that they say would destroy wilderness along its path from Canada into southern New England. A few of them are pretty sure the Canadian hydropower giant Hydro-Québec is preparing a quiet invasion of the United States.

The company behind the $1.4 billion project, Hartford, Conn.-based Northeast Utilities, is countering every punch in a bid to bring fresh power into a tightly constrained New England grid, boost property taxes for affected towns and gain stable long-term revenue for itself.

This same fight over core infrastructure is taking place in any number of venues across the country, as the future of the U.S. energy landscape collides with the present. The most prominent example of this dynamic on a bigger stage is the cross-boundary Keystone XL proposal to pipe Canadian oil sands crude to the Gulf Coast.

In each case, a developer wants to build a major piece of energy transmission across the U.S.-Canadian border, to reach resources to the north -- and each needs a presidential permit. But here in the Granite State, across the border from the more economically developed Canadian province of Quebec, the struggle is playing out according to local, not national, politics.

The opposition rhetoric has two themes: that Hydro-Québec is an imperialist corporation looking to take over the New England Power Pool, and that nobody has the right to come into the region, kill the viewshed and tell local citizens how to live.

A comment from one local who asked not to be identified was typical. The man was wearing an orange-and-black "NO" to Northern Pass cap and admitted he simply doesn't like the idea of 100-foot-tall towers cutting through his state, traversing the White Mountain National Forest and the Appalachian Trail along the way. He accused Northeast Utilities of lying about its relationship with Hydro-Québec, stating his belief that the Canadians are bankrolling the entire thing.

"There's not much in New Hampshire that's untouched," he said. "I don't like it. I don't want to look at it. I don't care if they need power in the south; they are not my problem."

On the other side was Scott Mason, a farmer, a former selectman in North Stratford, N.H., and political muscle hired by Northeast Utilities to push the project one conversation at a time. To Mason, who took this reporter on a tour of Coos County up to the border in a minivan, the opposition has become a circus of nutty naysayers who want New Hampshire to remain stuck economically.

"It's a traveling roadshow," said Mason of the opposition, hours before the last of four Energy Department scoping hearings on the project last month.

The tour weaved through peak autumn brilliance, rolling mountains and granite cliffs, passing wind towers above Dixville Notch and a closed-down old hotel attraction called "The Balsams Grand Resort" that looked like something out of a horror movie. Then, all along state Highway 3, leading to the venue for the DOE hearing in Colebrook, all manner of politically loaded signs appeared.

The roadside signs collapsed the complex fight, first over the federal presidential permit then over the more difficult question of state approval, into easy sound bites: "Hydro-Quebec, Stop Bullying New Hampshire!" read one, "Live Free or Fry," proclaimed another, in a clever take on the state's famous "Live Free or Die" manifesto held over from the Revolutionary War.

Over the next few days, it became apparent that the fight over the Northern Pass line has it all for energy junkies.

The state claims it wants more renewable energy to cut carbon emissions by 80 percent by 2050, but many fear Hydro-Québec is looking to flood New England with plentiful hydropower to elbow out U.S.-based generation and one day take over U.S. firms like Northeast Utilities. The utility counters that it's simply trying to meet regional power demands and do so with cleaner electricity to help meet the state's carbon goal, replace shuttered nuclear power and avoid regional overreliance on natural gas.

At the local level, pro-development landowners and unions want the line along with the construction jobs and increased property taxes that would come with it. Northeast Utilities estimates that operation of Northern Pass would result annually in $1.5 million for Coos County, where local opposition is strongest, and $28 million in all for the state treasury.

The company has already secured a 40-year transmission service agreement with Hydro-Québec to transmit as much as 1,200 megawatts of power over the line. That sets the project apart from rivals like the Lake Champlain Hudson Express proposal to get hydropower to New York City, an idea not nearly as far along in its permit review process that has arguably seen more attention because it has the backing of New York Gov. Andrew Cuomo (D).

"That's part of what we battle, the public perception that there are multiple projects," Northeast Utilities spokesman Martin Murray said. "People are aware of projects like that and think the region is getting swamped."

Murray insists his company's project is much closer to reality, given the secured contract with a proven supplier, but opposition to the final 40-mile stretch is intense.

Residents in the North Woods have reacted to Northeast Utilities latest proposal, which improves upon a rejected version from 2011, with venom, claiming the company is essentially sponsoring a Canadian incursion to benefit Massachusetts and Connecticut to the south.

"New Hampshire is not a doormat for the rest of New England," said E.H. Roy, a Stewartstown property owner who opposes Northern Pass. His comment was echoed by several others who see the battle as a split between rural New England and the more densely populated south.

'Let's make them put this thing underground'

Opponents insist they could support the project if Northeast Utilities would bury the entire line. The utility counters that an underground power line through a state made almost entirely of granite through its central belt makes no economic sense.

Even so, Northeast Utilities has agreed to bury key stretches in an attempt to pacify locals. The company's latest proposal steers the power line to the east, away from towns like Colebrook and smaller private landowners into an area where acreage was more readily available from timber and paper companies that have been struggling to stay in business.

Mason argued that local support is more active than one would think after attending a scoping hearing. He said this was the first time he had ever taken work as a consultant on local politics and that he had done so because he believes it's good for the region's economy.

The dispute does not break down on partisan lines, he said. "It all depends on how they look at business," he explained, while driving back and forth over the 45th parallel.

Most of the proposed route, or 147 miles of it, is through the central part of the state and would use existing transmission rights of way. It would also cut across a small slice of the White Mountain National Forest, requiring a special-use permit from the U.S. Forest Service. The more controversial stretch, the last 40 miles before crossing into Canada, would break ground on new rights of way above ground and dig to bury the line for about an 8-mile stretch.

Howard Moffett, a state legislator from down south, said he's not concerned about Hydro-Québec or any theories about economic development hurting the North Woods' remote flavor. What puzzles him is why Northeast Utilities won't bury the whole thing when the company argues that power-line technology has advanced enough to support a 1,200 MW cable.

"Stick with your guns," he told the crowd during the scoping hearing. "Let's make them put this thing underground. Bury it!"

Marvin Bellis is the lead attorney on the project and a senior counsel at Northeast Utilities. He spent all last month trying to convince locals that 187 miles underground couldn't possibly work.

Bellis said project costs would be $20 million a mile underground compared to $3 million a mile above ground. When asked if his team had developed an estimate of the entire cost of burial, Bellis dismissed the question.

"It makes no sense to develop an answer that's obvious on its face," he said. "It's not a question of pure feasibility; it's a question of economics."

Bellis added that the environmental consequences of digging through hundreds of miles of hard rock could make the aboveground project look environmental impact-free, by comparison. Murray later calculated the entire underground project at six times the cost of elevated lines.

Larry Rappaport, a state legislator, was the author of a law that blocked Northeast Utilities from using eminent domain to clear the project's path. He echoed local sentiment that says New Hampshire, a net electricity exporter, has enough power and need not lose scenic views to benefit New England.

"If states to our south have not planned and implemented, why should New Hampshire have to suffer?" he said, adding that the state's scenery "is the last asset we have."

"We would accept this proposal if it were buried in its entirety," he said.

'A lot of people are simply wrong'

Murray and Bellis acknowledged the power line is about shoring up the entire region's power supply with more diversified sources, not necessarily about improving New Hampshire's mix alone.

But Bellis insisted hydro supplies will result in lower bid prices into the New England Power Pool and therefore lower electricity bills. Murray cited an op-ed from the Sept. 15 edition of The Boston Globe that proclaimed support for the line.

"We don't shy away from saying it's a regional issue," Murray said.

Murray added that pipeline companies tend to stay away from New England because they are uncertain about whether their investments would pay off, while generation capacity in the region this past summer was running at maximum during hotter periods.

"This is the size of two Vermont Yankees," he said, referring to the 41-year-old nuclear plant in Vernon, Vt., that's scheduled to close next year. "It's a tremendous amount of power."

But the locals aren't buying. Cindy Lou Amy, an educator who testified at the scoping hearing, said Northeast Utilities should "stop complaining" about the cost of burying the line. She compared the company to children she's taught in the past, in reference to seven scoping hearings in 2011 regarding the company's initial proposed route that failed.

"There comes a time to tell a child, 'Enough! You had a chance to make your case; you failed,'" she said, predicting Northeast Utilities would be sold to Hydro-Québec as soon as the power line is finished. This also seemed to represent a commonly held view here.

Samuel Byrd, another local resident, warned that Northern Pass could be the first of many such projects. "Many others will follow, then we'll just be an industrial corridor for Massachusetts and Connecticut," he said.

But Murray and Mason described this kind of rhetoric as off-base. When asked how he intended to turn it around, Mason said he was working on it.

"You try to have a lot of small conversations," Mason said.

Murray added, "There is a lot of misunderstanding about it. A lot of people are simply wrong."

The utility is hoping to break ground by the end of 2015 and be operational in 2017. When and if the presidential permit is approved, Northeast will have to turn to the state review process, which will be much harder to secure given the tone evident in Coos County.

"This is by no means over when we get the presidential permit," Murray said.

As for the paranoia about Hydro-Québec, part of the problem appears to be that Northeast Utilities' arrangement for construction payment would be out of pocket, rather than through ratepayer financing. Indeed, Murray called the project the only "participant-funded transmission project in New England."

Asked to clarify what that means, Murray said most transmission projects in the past were financed by ratepayers because they were meant to ensure reliability. Northern Pass, on the other hand, "is not needed for reliability," he said.

"Since Northern Pass' costs of constructing the line will be recovered over a 40-year period of regular payments made exclusively by Hydro-Québec under a transmission service agreement that has been approved by the [Federal Energy Regulatory Commission], customers/ratepayers are not liable for the payment of any of those costs," he explained.

So what does that say about the fear that Hydro-Québec is behind all this?

"Paranoia is typically, by definition, an unfounded fear that something may happen," Murray wrote in an email. "There is no basis for that paranoia, and we are not, therefore, in a position to explain or comment on it."