FACE OFF: Five Reasons Why Northern Pass Deserves Serious Consideration

The Northern Pass Transmission project proposes to build a new transmission line that will bring up to 1,200 MW of hourly electricity and associated electric generating capacity into New Hampshire and New England from Québec. For comparison, 1,200 MW is approximately equal to the energy production capacity of the Seabrook nuclear power plant. Unfortunately, while there has been concern expressed about the project’s route and its aesthetics, there has been very little attention paid to the specific benefits the project will deliver to New Hampshire and New England and why this project is “needed.” Here are five specific reasons that it should be given serious consideration by the New Hampshire public and policy makers.

First, electricity on the Northern Pass will be sourced from Québec’s predominantly low carbon, hydroelectric system. The energy will be competitively priced when compared to New Hampshire and New England’s existing energy resource mix. It will displace other, more expensive and higher-carbon emitting, sources of electricity. The reduction in carbon emissions projected from the Northern Pass project is significant and is equivalent to taking off the road nearly 900,000 cars annually.

Public opinion, environmental policy and economics are driving utilities to seriously consider and plan for renewable sources of power in their portfolio mix. Coal and oil power production are on the decline here in New England, but another fossil fuel source – natural gas – powers nearly 45% of the electricity consumed in New England today. Natural gas, as a fossil fuel, also emits carbon when used to produce electricity. Natural gas is plentiful currently and moderately priced but conditions can change in the future. Supply shocks can reduce availability of supply. In addition, if some existing generating resources are retired, this will exacerbate the constraints on the local gas infrastructure system in New England and would require switching to oil generation with increasing frequency, and ultimately, electricity prices and emission levels would increase.

Second, unlike other energy transmission projects which are seeking guaranteed consumer subsidies, Hydro-Québec has committed to financing all capital and operating costs of this transmission project. As a result, there will be no direct investment risk for New Hampshire or New England electric consumers. Hydro-Québec has agreed to take on the market risk of the transmission investment in order to open up export opportunities for its generation.

Third, the New England wholesale power market is a fully integrated one that spans across state borders, covering six states. Northern Pass will create direct energy market benefits for all electricity consumers in New Hampshire and New England in the form of lower spot market energy prices. But, in addition to such spot market price benefits and regional environmental benefits, Northern Pass will also create local economic benefits for New Hampshire, in terms of more construction jobs and property tax revenues.

Fourth, Northern Pass provides insurance against “game changing” events that could lead to higher electricity costs for consumers. These game changing scenarios include unforeseen events like a shortage of natural gas or gas delivery constraints and resulting spikes in prices as outlined above. They also include a natural disaster that takes down a major power plant, as recently occurred in Japan; the retirement of aging oil and coal fired plants; or the closure of one or more nuclear power plants.

It is not widely known, but New England has an aging fleet of power plants and more than 14,000 MW of capacity – 46% of the current supply base in New England — is at some risk for retirement.

Finally, Northern Pass will improve the reliability of electricity service in New Hampshire and New England by increasing and diversifying the supply of power to the region. The Northern Pass transmission project – coupled with energy sourced from many of Hydro Québec’s storage reservoirs – will be a very controllable and reliable form of supply, in contrast to the typical run of river hydroelectric plant.

In summary, Northern Pass fits well within New Hampshire’s energy policy framework. It meets a number of fundamental objectives, including the need to transition to lower- carbon renewable energy, minimize government market intervention, contain costs for consumers, and make viable and reasonable long-term plans for the state’s energy future.

There are clear and substantive benefits for New Hampshire residents if Northern Pass moves forward. The cost-benefit proposition is very compelling, confirming the need for this project from the New Hampshire consumers’ and policy makers’ perspectives.

Julia Frayer is managing director of London Economics International’s Boston office.

Author: Julia Frayer

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  • C. dog e. doG

                                   Shirley, You Can’t Be Serious!
    Serious consideration, serious consideration indeed.  Now just what does all this corporate speak mean in regular folk language?  Well, lets just pass it through the Decepticon 2012 Translation Machine to decode this gobbly-gook.  After all, as the shill for Big Biz/Grate Gov marriages beseeches, this deserves our utmost serious consideration.
    Given the august aspect of something so serious, our first inquiry must, of course, be: how will such an enterprise affect are freedom?  After all, being citizens of New Hampshire, if we are not free, then we surely must be dead.  So, Julie, what say you about this most important of elements bending through your prism?  What’s that?  Nothing you say?   How odd.  Why, does this have anything to do with you working for an enterprise hailing from the mother country where freedom has never been of much concern, as the focus has always been on more regal matters?

    Perhaps this will shed some light on your prism for those not familiar with the corporate creation for which you are in employ, and perhaps sharing in the profit bag too:
    London Economics International LLC provides economic, financial and strategic advice to the energy and infrastructure industries.

    Now, just between us girls, has the gelling conglomerate interest, Northern Pass Project, hired you to spin this piece of propaganda (and how much does that fetch these days)?  And if so, how could we possibly separate your monied interests from your ability to tell the truth?  Why, there’s been so many deceptions and outright lies from those workin’ the Northern Pass angle, and workin’ it hard, how could little ol’ me and the country bumpkins of New Hampshire ever figure out such a complex thing like ferreting direct-current electrons across national borders to feed craven powers damming rivers while damning indigenous people and their land? 

    Oops, now just how do you crunch that number in your magical cost/benefit calculator?  I just can’t seem to find the right button to push on my TI-34.  Is it next to π, or is it some inverse ƒ(x), where x = dead culture?  Staying on function, is this button also used for forcible taking of peoples’ lands in NH, or is such ∫Culture (from James Bay to White Mtns) frowned upon by such revered white-glove consultants as you, and therefore merits a separate, but equal, button for this calculation?

    Now lets go to our two-by-two London Economics matrix, shall we:             
                     Policy            Constitution
    Slave        Cash Cow        Chattel
    Free man  Cost                No Eminent Domain (No Northern Pass)

    Why, it would appear that policies are a variable thing, no more than legalsleeze rope by which pols and their corporate brethren hang the free man.  Or, perhaps, you’re feeling a bit intrepid – a bit daring might I infer? – and could point out, exactly, where in the NH Constitution it provides the bases for your cherished policies?  Those of us living nominally under the Grate State of NH Constitution are dyin’ to hear your retort, should you and your fellow redcoats be able to muster one.
    – C. dog sets snares for wascally weasels

  • The Bird

    ” … Northern Pass provides insurance against ‘game changing events that could lead to higher … costs … ” Can Julia Frayer say “secession?” She sounds like she was taking dictation from Gary Long.

  • Disgusted of Coos County

    This sounds like more of the same old corporate speak that’s been shoved down our throats for the last year and a half. The benefits to this scheme are all to PSNH. The costs are all on the residents of the Great North Woods. Any temporary jobs (and I don’t think they’ll be many of those going to New Hampshire residents) are outweighed by the devastating effect these towers will have on our tourism industry. The increased, but depreciating, tax income will be more than offset by the widespread decline in property values and consequent net decline in tax revenues. So towns will struggle to survive with less money, less jobs and less people.

    As to all this cheap electricity, this is to give PSNH and Hydro Quebec more profit. They have been very careful not to promise lower electricity prices to the people effected, even though our electricity is ridiculously expensive.

    So Ms Frayer, if you want to write a piece about the economic impact of this scheme, that’s fine. But do some work and look at both sides of the picture and calculate what the long term economic impact will be to the people of New Hampshire. Don’t just parrot Northern Pass propaganda and claim it’s an economist’s opinion.

  • Jtddb

    we should not be buying another energy source from another country.

  • Anonymous

    Propaganda beyond belief!
    If, in fact, we want to purchase energy from another country (energy created with enormous and ongoing damage and emissions not considered in this article), then we are confronted with the most antiquated and damaging project to transmit this power to it’s market further south.
    How incredibly foolish NH would be to accept the Northern Pass Project as it is proposed.
    This is NH’s excellent opportunity to take charge and negotiate an energy policy that would serve everyone!

    No scarring of the landscape of taking of people’s property.
    No overhead transmission lines reducing property values and damaging people’s health.

    Lease out out existing highways and bi-ways for line burial with new, better technology in land with relatively soft digging.

    Jobs, energy, revenue for NH, without the devastating damage that the Northern Pass promises.
    Anything less will be a dismal failure on the part of our legislature.

    High transmission lines are in the future all over NH if we do not stop this project.
    No one will be unaffected.

  • Ed

    The Northern Pass Project is about one thing and one only, PSNH leasing the use of thier right of ways to Hydro Quebec for millions of dollars a year. If the State of New Hampshire is really in need of more revenue why not lease the states right of ways to Hydro Quebec and let New Hampshire profit instead of PSNH ? Why, because our state politicians who favor the Northern Pass have been bought and are in the back pochets of PSNH .

  • Timo

    What an incredible stretch! This project is a TOTAL no win deal for New Hampshire. The writer’s claim that is an environmentally conscious project shows just how uninformed and ignorant of the damage done to construct the dam and flood thousands of acres of productive forest to create “green” energy. It would take over 150 YEARS for the carbon foot print to simply equal out with a coal plant at the rate of carbo emissions produced by the degradation and decomposition of the organic matter killed by the flooding to say NOTHING about the trees that USED to clean the air that are now dead and irreplacable under the waters. Let’s talk about the cultural damage the dams have cost the natives in Canada! The list goes on. The corporation behind NP has NO concerns for anything but making money for themselves!

  • Darlene King-Jennings

    Well your from Mass, what do you have to lose by fudging the truth? It is a bit more than about the esthetics Ms Frayer for those of us in the kill zone. It is about the fact that our economy runs on our esthetics. People come to central and northern NH because the National forest is uncluttered and unmarred by such horrible sites as high voltage lines through it . Without the money from tourism we in this part of the country have no econommic base. Yes it is about esthetics but it is about economics, it is about health threats -only someone that has no threat will say that the risk of health risk from high tension lines is minimal or nonexistant- the rest of us know that it is real and seriously a threat especially to our sick, our children and our elderly. Despite what you all want us to believe the tax dollars that might come in from the Northern Pass will be far offset by the loss in our real estate values  and we stand to gain absolutely nothing . The power benefits are meant to make power cheaper in Mass and Conneticut  not in NH, no wonder you tout the benefits . Come on we are not hicks up here so stupid that we do not see someone paid for their opinion! 

  • neal

    The economist  still hasn’t figured out thet Quebec Hydro is in a foreign country which the U S has no control over. We need to become independent of foreign energy and develope oun own energy policy here in our own country.

  • Helen

    Perhaps Ms Frayer, like Marie Von Luling, vice president of Northeast Utilities, parent company of PSNH, is just so ‘caught up in the process that she is just not using any common sense,’  Obviously, Julia is immersed in the pool of a shareholder/payoff high. Acting as a puppet for the ‘Northern Pass’ promoters certainly is not something that gains respect for anyone involved. Perhaps Julia has forgotten that Patrick McDermott, economic & community development manager for PSNH stated to an audience at a Site Energy Meeting  that ‘large scale hydro-power does not qualify as renewable energy under NH law & would not contribute to NH’s goal of 25% RPS by 2025.’ It has nothing to do with ‘clean & renewable energy.’ He also admits that ‘Northern Pass’ would not generate a lot of property taxes (except in Franklin) Brian Bosse, project manager for ‘Northern Pass’ admits ‘that property values would plummet due to the visual pollution.’
    “Game changing events’  that could lead to higher electricity costs to consumers? Vermont, who signed a 40 year contract with Hydro-Quebec, has many speaking out now against that decision, stating that they did not do enough research beforehand and  that that decision is a ‘renewable disaster’ and their electric rate will increase by 40% and there is nothing they can do.
    Hydro-Quebec is fueled by a coal-fired plant. They also have 2 nuclear plants. Hydro-Quebec is constantly in court fighting lawsuits with disgruntled parties. Hydro-Quebec has destroyed millions of acres of land and ruined countless rivers. There have been many allegations of corruption.
    Hydro-Quebec would pay for all of the project? All of it? Really? I’ve read reports from PSNH itself to the PUC stating that they would be trying to recap money put out for such things as the converter station in Franklin thru  their ratepayers and that wouldn’t be all.
    I would personally like to escort Ms Frayer to the homes, businesses, schools & daycares that the Northern Pass project would affect all along the 180 mile route. I would love Ms Frayer to plunk herself down in a home 50 feet from the HVDC & the AC lines. maybe even beside the hugh converter station that will be in Franklin.
    The Northern Pass project has been promoted by lies & deceit from the beginning. It’s a get rich quick opportunity for the utility companies and their stakeholders. It is a disgrace. And the blatant disregard for the people of NH who it would hurt the most is even more of a disgrace. How Ms Frayer, with any kind of conscience, can state what she has is beyond me.

  • Brian David Symmes

    Bringing New Hampshire more into line with the power grid of Southern Appalachia? No Thanks!
    What I’d like to see is if the people can motivate the politicians to vote for tax credits for newer more efficient home furnaces. Credits that would be given both to the property or business owner and could be used to reduce the tax burden
    Along with that, low-interest long-term loans to businesses that upgrade their insulation and heating systems. Let’s try to maximize building insulation efficiency – let that money go the contractors in the state of New Hampshire instead of Hydro-Quebec.
    Let’s also be clear that this is a choice to sacrifice the North Country for the down-state cities like Portsmouth
    Look at the map of natural gas pipelines in this NHBR article, http://www.nhbr.com/July-12-2013/Natural-gas-pipeline-plans-bring-opportunities/
    Shouldn’t the government subsidize gas pipelines? This is infrastructure for the USA that will keep the working capital for energy costs in the USA. It may take longer, but in the long run it’s cheaper, more reliable, and keeps more of the money in the USA