Northern Pass Transmission public utility status

Thursday, October 27, 2016

New Hampshire utility regulators have issued an order conditionally authorizing Northern Pass Transmission LLC to operate as a public utility, with respect to its proposed 192-mile, high-voltage electric transmission line from Canada into New Hampshire.  The New Hampshire Public Utilities Commission's Order No. 25,953 approves a settlement agreement between the transmission line developer and Commission staff.  Among its conditions are requirements that NPT obtain all necessary permits, contribute $20 million over 10 years to support energy efficiency and clean energy initiatives, and hold New Hampshire electric ratepayers harmless from costs associated with the possible regional allocation of costs for a portion of the Northern Pass transmission line.

Proposed by two companies affiliated under the Eversource family -- Northern Pass Transmission LLC and Public Service Company of New Hampshire d/b/a Eversource Energy -- the Northern Pass line would include new direct current transmission lines and an AC-DC converter station.  A variety of federal and state approvals are required for the line's development, including certification of site and facility by the state Site Evaluation Commission, plus several approvals from the Public Utilities Commission.

NPT secured one of those approvals this month, in the form of Public Utilities Commission Order No. 25,953, which conditionally authorizes NPT to operate as a public utilities in municipalities along its route.  In the Order, the Commission found "that NPT has the necessary technical, managerial, and financial expertise to operate as a public utility."

The Commission next found that the terms and conditions of a settlement agreement between Commission staff and NPT "ensure that granting NPT authority to commence business as a public utility is for the public good."
  • First, the Commission noted public benefit, in the form of transparency, from the fact that the settlement recites a list of applicable statutes and rules.
  • Second, the settlement called for a $20 million public interest payment, to be paid in installments of $2 million per year over the first 10 years of the operation of the Northern Pass Project; the Commission noted that this payment "will benefit customers by allowing the Commission to direct the use of this payment to energy efficiency programs and clean energy projects under its supervision."
  • Third, the Commission noted that its grant of public utility status is conditioned on NPT procuring all necessary approvals for the Northern Pass Project, including obtaining a certificate of site and facility from the SEC.
  • Finally, the Commission noted a provision in the settlement that "NPT must hold New Hampshire electric ratepayers harmless from costs associated with the possible regional allocation of costs for a portion of the Northern Pass transmission line."  The Commission expressed a belief "that the rate treatment provision applicable to the DC portion of the line could constitute a significant benefit to ratepayers in the event the ISO-NE designates this portion as eligible for regional cost recovery.
On this basis, the Commission approved the settlement agreement in its entirety, adopted its conditions, and found that commencement of business as public utility subject to those terms and conditions will be for the public good.

Meanwhile, NPT continues to pursue other approvals, such as PUC approval for crossings of public waters, and the SEC certificate of site and facility itself.

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