Why we must take a second look at Northern Pass

Jim Roche
Business and Industry Association
Last week, after years of remaining neutral on any proposed energy infrastructure project, the Executive Board of the Business and Industry Association – New Hampshire’s statewide chamber of commerce – voted to declare its support for the Northern Pass transmission project. Further, the board voted to urge reconsideration of the project by the New Hampshire Site Evaluation Committee.

After nearly two-and-a-half years of hearings, the SEC deliberated for only two-and-a-half days before rejecting the permit for the transmission line which would bring much-needed hydroelectric power to New England. Given this short-sighted action you may ask, “Isn’t Northern Pass dead now?” The answer is no. The petitioner, Eversource, can still ask the SEC for reconsideration of their deliberative process to determine whether legal requirements were followed. The Northern Pass project is very much alive.

So what has changed in these many years to shift BIA’s position from neutrality to support? The region is in an energy crisis with two major concerns: reliability and cost. Just a few years ago there were several proposed infrastructure projects on the table that would either import electricity or bring more natural gas that New England increasingly relies on for electric generation. At the time, BIA’s board did not feel it was appropriate to pick winners and losers among these proposals. But one by one, those projects were thwarted by well-organized opponents. There are other plans being drawn up to bring electricity to the region, but they are years away from permitting and even further away from construction. Planners have become weary seeing how unfriendly regulators are to new energy infrastructure in New Hampshire. The only large infrastructure project that is shovel-ready is Northern Pass.

The Independent System Operator of New England is the region’s electrical grid operator. After a yearlong analysis of the market, ISO New England recently concluded it’s unlikely the amount of electricity in the grid will meet peak demand by the winter of 2024-25. ISO predicts emergency measures – including rolling blackouts in New Hampshire and across the region – will be necessary. Factories abruptly going offline and homes going dark in the winter are a reality. If that becomes the new normal, it will already be too late.

BIA supports the use of renewables and energy efficiency investments. But these things by themselves are not nearly enough to fill the gap. ISO’s study confirms this. Only bolder measures can ensure the reliability of electricity around the clock to the region’s 14 million customers.

New Hampshire’s electrical energy prices are consistently 50 to 60 percent higher than the national average. Approximately 30 percent of the region’s generation capacity has already retired or is at risk of retiring over the next few years. 

The “attrition rate” for proposed new electric generation projects (the percentage of projects that never come to fruition in New England) is a whopping 68 percent.

During the extreme cold weather between Christmas and early January, the region was forced to use over 2 million barrels of oil to fill gaps in supply. 

Many oil-fired generators were days away from running out of fuel. Spot prices for natural gas in New England became the most expensive in the world. (Emissions of greenhouse gases spiked during this period because burning oil for electric generation is less environmentally friendly than electricity generated from natural gas, nuclear energy, and hydroelectricity). Without Northern Pass and other large energy infrastructure projects, electricity prices in the region will continue to rise relative to the rest of the country, putting New Hampshire’s economy on the razor’s edge of disaster.

Northern Pass would bring 1,090 megawatts of clean hydroelectric energy from Quebec to the region. Massachusetts ratepayers would pay for the electricity and the transmission to deliver it to New England, yet New Hampshire and the rest of the region would reap benefits because the additional electricity would meet demand and help stabilize and lower energy prices throughout New England. 

New Hampshire’s estimated cost savings would be approximately $60 million annually.

Those who claim New Hampshire can get by without Northern Pass are playing roulette with state’s economy. Already, businesses from outside New Hampshire and others now here have reversed their plans to grow in the Granite State due to the SEC’s decision. 

The SEC needs to reopen the review process and reverse its decision denying the permit to construct Northern Pass. Its unfortunate decision to prematurely end consideration of the permit puts New Hampshire’s economic future in jeopardy.

 

Jim Roche is president of the Business and Industry Association.