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Commitment from Hydro-Quebec will bring electricity to Maine at discounted rate

Gulf Coast Electric Cooperative announced they will not do member disconnections and will waive late fees during COVID-19. (MGN)
Gulf Coast Electric Cooperative announced they will not do member disconnections and will waive late fees during COVID-19. (MGN)(WJHG)
Published: Jul. 10, 2020 at 10:49 AM EDT
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$170 millions is coming to the state for rate relief from Hydro-Quebec.

This announced by Governor Mills Friday morning.

Hydro-Quebec has signed a formal binding commitment to sell electricity directly into Maine at a discounted price via the New England Clean Energy Connect.

The commitment will result in enough clean energy to power about 70,000 homes or 10,000 businesses.

The company will also accelerate $170 million in benefits including rate relief for consumers and incentives for broadband, electric vehicle charging stations and heat pumps.

Mills says with this new commitment, we ensure that Maine consumers access power directly from the line at a discounted price.

Governor Mills Full Statement:

Governor Janet Mills announced today that Hydro-Québec has signed a formal binding commitment to sell electricity directly into Maine at a discounted price via the New England Clean Energy Connect (NECEC). The commitment will result in enough clean energy to power approximately 70,000 homes or 10,000 businesses in Maine. Additionally, as part of the commitment, Hydro-Québec will accelerate $170 million in benefits negotiated last year, including rate relief for Maine consumers and incentives for broadband, electric vehicle charging stations, and heat pumps.

Other benefits negotiated in the 2019 Stipulation approved by the Public Utilities Commission include scholarships for Maine youth, host community funds, electric grid stability and improvement, and a preference for Maine workers, among other benefits.

“I have heard people say that the NECEC will deliver power directly to Massachusetts but not to Maine,” said Governor Janet Mills. “With this new commitment, we ensure that Maine consumers access power directly from the line at a discounted price.”

“From supporting Maine-based union labor to contracting with Maine businesses for construction materials, the NECEC project has always been a good deal for Maine. With this new announcement, it just got even better,” said Tim Burgess, Assistant Business Manager for IBEW Local 104. “The expanded agreement doubles down on longstanding efforts to ensure this project benefits Maine. We're proud of the significant role union workers will have in building new infrastructure that will deliver discounted clean electricity to Maine’s homes and businesses, a huge win for Maine rate payers.”

“This new agreement between Governor Mills and Hydro-Québec ensures that Maine will see increased benefits from this project and all of the benefits will reach Mainers several years earlier,” said Emily Green, Senior Attorney at Conservation Law Foundation. “It also reinforces the importance of coupling climate action with relief for Maine families and businesses. We look forward to working with the Administration to deliver the project’s many benefits to those who need them most.”

“I commend Governor Mills for her continued leadership and ability to secure these additional benefits for the state,” said Barry Hobbins, Maine Public Advocate. “This commitment adds to the already significant stipulation that was negotiated for this project and ensures that Maine ratepayers will receive lower cost electricity as a result of this project. Maine ratepayers will also begin to see these benefits sooner which is crucial during these challenging times.”

“The Maine State Chamber of Commerce thanks Governor Mills and Hydro-Québec for delivering energy savings for Maine’s business community and the timing of this agreement couldn’t be better for Maine as we prepare for our economic recovery from the pandemic,” said Dana Connors, President and CEO of the Maine State Chamber of Commerce. “Energy costs drive economic development, and this will put Maine in the driver’s seat for years to come.”

“Governor Mills has seized a tremendous opportunity for Maine to obtain far greater benefits from Hydro-Quebec,” said Robert Dorko, President of Industrial Energy Consumers Group. “Most importantly, Governor Mills has obtained a huge amount of non-fossil fuel hydroelectric energy for Maine at very low rates for a long time. This will lower costs for all while reducing climate emissions significantly. This agreement assures that NECEC will have the greatest possible benefit to Maine. Now it’s like we have our own Maine line to the largest source of carbon free electricity in North America.”

Under the commitment, Hydro-Québec will sell 500,000 megawatt (MWh) hours per year of hydroelectricity to Maine via NECEC, if permitted, at a discount of four dollars per MWh (US$4.00/MWh). To implement the commitment, the Governor’s Energy Office (GEO) and Hydro-Québec will finalize either: 1) a 20 year power purchase agreement with one or more Maine Buyer(s) at the discounted price; or 2) if a power purchase agreement is not entered into, Hydro-Québec will pay a total of $40 million in installments over 20 years to an entity designated by the GEO that ensures benefits to Maine retail energy customers. The formal commitment from Hydro-Québec to the GEO is attached.

In addition to the commitment to sell power to Maine, and pending review by the Public Utilities Commission (PUC), Hydro-Québec has agreed to accelerate the start of payments to begin upon the issuance of final permits rather than the commercial operation date. The following are the funds to be provided by Hydro-Québec:

Rate Relief: $140 million in installments over forty years, which includes $90 million of rate relief for retail electricity customers within Central Maine Power service territory and $50 million for the Low-Income Customer Benefits Fund to reduce energy costs for low income customers.

Broadband: $10 million to capitalize a Broadband Fund to provide grants that support the implementation and maintenance of high-speed broadband infrastructure in the communities that host the transmission facilities. Payments will be made in installments over five years.

Heat Pumps: $10 million for the installation of high efficiency air source heat pumps, that may include targeted initiatives to reach low-and moderate-income individuals in Maine. Payments will be made in installments over five years.

Electric Vehicles: $10 million for the Hydro-Québec EV Fund to fund the deployment of fast charging infrastructure in Maine. Payments will be made in installments over five years.

The commitment comes after Governor Mills wrote to the President and Chief Executive Officer of Hydro-Québec on March 6, 2020, to convey that, despite NECEC’s benefits, many Maine people have expressed concern that the power to be transmitted across western Maine will go to Massachusetts and not directly to Maine consumers. The Governor expressed her desire to secure NECEC’s uncontracted power at a rate that is advantageous to Maine people. A copy of the letter is attached.

The new commitment from Hydro-Québec builds on the strong $258 million stipulation negotiated last year with several parties, including the Office of the Public Advocate and the Industrial Energy Consumer Group with the assistance of the Mills Administration, and will enhance the benefits inherent in NECEC, the construction and operation of which will: provide economic development, educational scholarships, property tax payments, and the creation of more than a thousand jobs during development; suppress electricity prices, deliver rate relief for Maine consumers, and strengthen the New England electric grid to avoid blackouts and brownouts, and; reduce carbon emissions by as much as 3.6 million metric tons per year, or the equivalent of taking 700,000 cars off the road, according to a study commissioned by the PUC.

Furthermore, the Maine Department of Environmental Protection – through its independent permitting process – has required an unprecedented level of environmental protection and compensatory land conservation for the construction of NECEC, including the permanent conservation of 40,000 acres in western Maine and limiting the corridor’s width from 150 to 54 feet at its widest point in Segment 1.

Governor Mills directed the Governor’s Energy Office to sign onto the initial NECEC Stipulation in February of 2019.

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