The Massachusetts Department of Public Utilities has approved the long-term contracts for hydropower from Quebec.
It's the only approval needed for the New England Clean Energy Connect project to deliver to the Bay State about 9.45 terawatt-hours per year of clean hydropower for 20 years.
In an order issued late Tuesday, the DPU gave its approval for contracts between H.Q. Energy Services Inc. and the state's electric distribution companies in what would be Massachusetts's largest procurement of clean energy.
If the New England Clean Energy Connect project secures the permits it needs from Maine and the federal government, Massachusetts officials said the state would be on track to source about half of its electrical supply from clean sources, mainly offshore wind and hydro.
"Moving forward with these hydroelectricity contracts is an important next step toward providing Massachusetts ratepayers with additional clean energy resources that will reduce monthly energy bills, cut greenhouse gas emissions and improve winter reliability," Governor Charlie Baker said in a statement.
An official from the Executive Office of Energy and Environmental Affairs said the New England Clean Energy Connect project could supply about 17 percent of the state's electricity demand at a levelized price of 5.9 cents per kilowatt-hour under the contracts.
The project, which is expected to come online by December 13, 2022, would reduce Massachusetts electric bills rates between 2 and 4 percent each year, the EEA official said.
Without the project, EEA estimated that Massachusetts would be buying clean energy at a price of roughly 7.5 cents per kilowatt-hour, resulting in a savings of $3.9 billion over the 20-year life of the contracts.
"These contracts will diversify energy sources available to the consumer and are focused on protecting the ratepayers," DPU Chairman Matthew Nelson said in a statement. "We look forward to seeing the Commonwealth continue to be a leader in providing clean and reliable sources to meet our energy needs."
New England Clean Energy Connect is a 145-mile transmission project of Central Maine Power Company, an Avangrid Inc. subsidiary. After Massachusetts energy officials and utility executives dropped the state's first choice of a transmission project to deliver hydropower from Quebec to Massachusetts — the Northern Pass project through New Hampshire — due to regulatory opposition in New Hampshire, utility executives decided to negotiate long-term contracts with CMP and the NECEC project under a 2016 energy law.
Avangrid and CMP have said the $950 million NECEC project will provide an above-ground link between the electrical grids in Quebec and New England to provide cleaner and more reliable hydropower directly to a converter station in Lewiston, Maine, and into the regional power grid.
The news of DPU's approval Tuesday was not universally welcomed. Dan Dolan, president of the New England Power Generators Association, said his organization is disappointed that DPU did not require the contracts to guarantee delivery of a historical level of electricity into the region above the amount being procured through the contract.
"The order entirely side-steps the requirement that this contract be incremental to historical deliveries by Hydro Quebec into New England. That means that any hopes that this would help reduce greenhouse gas emissions will be little more than an accounting trick," Dolan said. "Massachusetts consumers will now be paying out the largest single contract for electricity in Massachusetts history, for power that Hydro Quebec has largely already been providing, with no required reduction in greenhouse gas emissions. It's incredibly disappointing to see such a handout for a shell game of power production."
This report was originally published by State House News Service.
