Northeast Utilities is delaying by as much as a year construction of power lines to bring renewable hydropower generated by Canadian dams into New England, with the project currently estimated at $1.1 billion.
The Hartford-based utility giant is undertaking the project with Boston-based NStar, even as the companies push ahead with a merger. In a conference call with investment analysts earlier this month, Northeast Utilities CEO Chuck Shivery said the company expects approval of the deal from Massachusetts regulators by year”™s end at the latest.
The Northern Pass project will require approval from a small army of regulators and officials, even as opponents in New Hampshire muster their forces to defeat the project entirely. On a blog called Bury the Northern Pass, a columnist said the Northeast Utilities third-quarter conference call marked the first time investment analysts have posed tough questions on the project to Shivery, including the question of any use of eminent domain to push the project along.
Shivery acknowledged the impact on New Hampshire residents protesting the proposed transmission towers.
“Although we believe there is a widespread view that the project will bring very significant economic and environmental benefits to both New Hampshire and other New England states, we also recognized that there were significant concerns about the initial 40-mile route we proposed for the northern section of the line in New Hampshire where we do not currently own a right of way,” Shivery said. “We expect to identify a new route for that northern section later this year so that regulatory review can continue.”
The project could have additional financial benefits for Northeast Utilities ”“ Shivery said the Federal Energy Regulatory Commission recently made a ruling that will favor utilities in how they can allocate costs for transmission lines.
Leon Olivier, CEO of Northeast Utilities subsidiary Connecticut Light & Power, said the company now hopes to start construction in early 2014.
“The additional time allows us to do the environmental analysis over two seasons and also work in the communities to build consensus and to line up the rights-of-way through that last 40 miles,” Olivier said. “We”™re making very solid progress on that.”
Even as the Northern Pass project proceeds, Northeast Utilities is looking to tap other sources of renewable power in New England, including:
Ӣ wind farms in Maine, New Hampshire, Vermont;
Ӣ wind and solar in Massachusetts; and
Ӣ what will be 10 megawatts of renewable power in Connecticut from sites the company has yet to reveal.
For the second quarter, Northeast Utilities earned $77.3 million as revenue dropped 6 percent to just above $1 billion, including the added costs from the damage caused by the tornado in Springfield, Mass., and other storms. CFO David McHale said the overall economic environment in New England remains a major concern.
“I think it”™s no surprise that we”™re going to stop short of calling (it) a double dip (recession) for sure, but no surprise that the New England economy and our economies have not reaccelerated in terms of growth, in terms of job creation, in terms of housing and the like,” McHale said. “You have ”¦ fundamentally more economic weakness than we might have hoped for six or nine months ago.”
