Construction of a 145-mile transmission line in western Maine to deliver hydropower from Canada to Massachusetts—stalled for nearly two years by legal battles over an opponents' grass-roots ballot initiative and federal project permits—restarted Aug. 3 at a Lewiston substation site, but with a pricetag up 50% to $1.5-billion since work began, project officials confirmed.
“It was a small group” of union workers at the site, said a spokesman for New England Clean Energy Connect (NECEC), but he did not confirm which unions were present or detail the planned project scope or completion target. "This is a small first step in the overall process,” he said.
Material and pole deliveries to project sites and laydown yards will continue and “additional pre-construction activities will occur throughout the project area,” says an online project update. “NECEC will send additional notices to landowners prior to construction occurring near their properties.”
Construction restart is the latest move in the controversial battle over developer Avangrid's effort to build the 145-mile transmission project. In February 2021, three environmental groups filed for an injunction to stop work while they sued the U.S. Army Corps of Engineers for stricter environmental permit review.
Construction finally stopped following a Maine citizen’s initiative on state ballots in November of that year that won with 60% approval, but which was contested by Avangrid claiming “vested rights” to proceed with its project.
The developer's claim was upheld in April with a unanimous jury verdict.
Maine's environmental agency in May lifted its permit suspension, enabling construction restart of a project designed to supply up to 1,200 MW of Canadian hydropower to the New England power grid, or equivalent energy for one million homes, Avangrid claims.
Central Maine Power, a utility unit of Avangrid, notified the agency late last month that “some construction activities” on the NECEC project will begin in August, says a project update.
“We are very pleased that the jury in the Maine business and consumer court unanimously determined that NECEC can not only resume construction but also that there are no appeals on the ruling,” Avangrid CEO Azagra told analysts on the company's July 27 second-quarter earnings call.
He identified work at the Lewiston site as involving "critical path activities" where a new converter station and upgraded substation will be built.
Project Cost Up 50% Since Shutdown
Azagra confirmed that the 21-month-long project delay has inflated the $1-billion project cost to $1.5 billion, with $638 million already capitalized, he said, but the CEO did not detail reasons for the increase. However, he added that Avangrid was engaged in “ongoing discussions on cost adjustments" and had "reached an agreement with the counterparties … to extend the … timeline" under its power contracts.
Azagra added that recently the Massachusetts legislature included “favorable legislation in the budget bill to provide the [state] Department of Public Utilities the flexibility to approve amended transmission services agreements, which will support in the recovery of cost increases.” That would allow Avangrid to transfer cost overages to utilities and their ratepayers to recapture the overruns.
In coming weeks, two spending bills will have to be reconciled in the state House and Senate chambers.
Rep. Jeff Roy, co-chairman of the House energy and telecommunications committee, said the money that Avangrid seeks to recoup would reduce the monthly savings for an average household from $2.64 per month to about $2 per month. But it is a way to allow the project to restart, he said.
"It's good news for Massachusetts residents and businesses—and New England as a whole—that construction will resume on the NECEC line, said a spokesperson for the state Office of Energy and Environmental Affairs. "This transmission line will bring affordable, clean energy to our state and we're pleased to see it moving forward."
The spokesperson added, "We're committed to working with the Legislature to ensure that the project is completed."
In 2022, Massachusetts released a clean energy and climate plan that targets net zero greenhouse gas emissions by 2050.