April 01. 2013 8:56PM

Northern Pass vs. the unregulated

New Hampshire Union Leader

A report issued by the New England Power Generators Association, which represents unregulated energy suppliers in the region, says the promise of low-cost power from the Northern Pass hydroelectric project has been upended by the low price of natural gas, that the economic impact of the project has been overstated, and that the project is seeking special treatment that defeats the purpose of deregulation.

Northeast Utilities, which has proposed Northern Pass, wasted no time responding.

"At a time when regulators, policy makers and customers are looking for solutions to our long-term energy needs, NEPGA appears to be looking out for its bottom line," reads a post on the project website. "NEPGA's own fact sheet boasts that it controls more than 84 percent of all New England's existing generation. It's clear that Northern Pass concerns NEPGA because the clean hydro-power the project will deliver will displace the more expensive fossil fuels produced by NEPGA's members."

The March 25 report sparked the latest war of words between Northern Utilities, which owns Public Service of New Hampshire, and the group that lobbies on behalf of companies that own unregulated power plants throughout New England, which are now mostly fired by natural gas.

"We honestly have never taken a position in favor or opposed to Northern Pass," said NEPGA President Dan Dolan. "We just believe in an open and competitive playing field, and we haven't seen that historically from Northern Pass."

Northern Pass spokesman Mike Skelton said the timing of the NEPGA report is suspect: "It's telling that only days after several news articles from across the region reported real challenges facing the grid and the need for diversity, that NEPGA issues a report attacking Northern Pass, a project which is a solution to the very problem we are facing."

Skelton was referring to recent reports that New England came close to an electricity shortage during extremely cold days in January and February, due to the growing reliance on natural gas in a region with limited pipeline capacity.

"It seems NEPGA is suffering from a blackout of reality when it comes to the serious challenges facing our energy grid," said Skelton. "Recent warnings from the independent system operator have made clear the need for greater diversity in our energy supply, or we will continue to face the prospect of blackouts and price volatility."

He described the NEPGA report as nothing more than an "update" of a white paper from last year. "There is no new content in last week's report," he said. "ISO New England's warnings on natural gas, as you know, are very new, but NEPGA seems to be avoiding addressing them."

Dolan said the power generators' group is very concerned about the reliance on natural gas, and that he serves as co-chair of a regional initiative involving the electric and natural gas industries that is looking at various solutions.

"We are spending an enormous amount of time on this issue," he said, "but we can walk and chew gum at the same time."

He said last year's report focused mostly on the threat of eminent domain, which has since been resolved by the state Legislature through a ban on any property taking for Northern Pass. The new report focuses on threats to the competitive marketplace from Northern Pass, at a time when New Hampshire consumers are reaping the benefits of competition through lower electric service charges.

The report claims that Northern Pass is seeking special treatment that would give it an unfair advantage in the marketplace in areas such as property rights, subsidies and sole source, no-bid contracting.

"All we ask is a level playing field, on which all participants operate under the same rules," Dolan said.

Northeast Utilities executives last year told investors they would have a route for the high-voltage transmission lines designed to carry hydroelectric power from Quebec into New England by the end of 2012. In late December, the company said it had a route, but it was not ready for presentation to the public or regulators.

The company repeated that claim in a March 29 post: "Although we have identified a new route which meets our project requirements, we believe it is in the best of interest of landowners, communities, and all stakeholders for us to continue to build on the details of this proposal and to take the time now to make some additional refinements before we begin the formal public review processes at both the state and federal levels."