Hydro-Quebec chief consults with lawmakers
BOSTON >> As the Legislature considers ways to diversify the state's energy sources, meet its emissions reduction requirements and hold down ratepayer costs, the chief executive of Canada's largest producer of hydroelectricity said Wednesday his company has the answer.
"When I look at the needs, people need first of all, more renewable energy. You've got very aggressive (emission reduction) targets and we can be part of the solution," Éric Martel, president and CEO of Hydro-Quebec, told the News Service during an interview. "But I think there is also a challenge on cost of electricity. People some time will think about more renewable and building all of this will cost more, but I think clearly we can bring help stabilizing and bringing costs down."
Martel was at the State House on Wednesday morning to talk about hydropower and renewable energy with the Legislature's Green Economy Caucus, and to take additional meetings in the building in the afternoon. Earlier Wednesday, Martel met with members of the Massachusetts business community, whom he said will love the stability and predictability of hydropower.
Last week, the House overwhelmingly approved a bill (H 4385) to diversify the state's energy mix by requiring utilities to solicit and enter into 15- to 20-year contracts for 1,200 megawatts of offshore wind and roughly 1,200 megawatts of hydropower. It's part of a strategy to reduce the state's reliance on natural gas and meet carbon emission reduction mandates.
Senate leaders have suggested they could look to broaden the scope of the House bill by looking at ways to boost energy efficiency and spur the development of energy storage technology.
Cost has been a theme to the energy debate on Beacon Hill this session, particularly keeping ratepayers from seeing spikes in their electric bills each month amid reports that Boston-area electricity and natural gas rates are well above the national averages.
"The price on the bill here for every kilowatt-hour you pay, it's four times what we're paying in Quebec," he said. "Having a source like big hydro will help you to bring your costs down. We can contribute also not just to the environment piece, clearly, but also to the dollar figure, which people will see their bill going down."
A study released earlier this year by the Massachusetts Clean Energy Partnership estimated a net savings of $171 million from large-scale hydro imports for Massachusetts customers. But the New England Power Generators Association rebutted the report's claims, saying it believes long-term contracts for hydropower could end up costing ratepayers $777 million a year.
According to NEPGA, four of the past six electricity shortages in New England were caused by disruptions in Canadian hydropower exports. NEPGA President Dan Dolan has said that a provincially owned company like Hydro-Quebec would prioritize Canadian customers when disruptions occur, an assertion the Consul General of Canada to New England refuted last month.
Another concern among lawmakers is that ratepayers will end up subsidizing the construction of the transmission infrastructure necessary to carry the electricity from the rivers and reservoirs of Quebec to Massachusetts.
"It's expensive at the beginning, I know. But when you look at the impact it's going to have on the cost being depreciated over so many years and the value of the power being more competitive, I think at the end they're going to see a positive impact," Martel said. "It's an investment for a couple of generations."
Costs aside, transmission remains the largest obstacle to letting Canadian hydropower flow into Massachusetts at a greater scale, Martel said.
The option preferred by Hydro-Quebec is the Northern Pass Transmission Project, a 192-mile transmission line that would carry 1,090 megawatts of Quebec-Hydro's electricity from Quebec into New Hampshire and the rest of the region. The alternatives, Martel said, would be more costly and would take longer.
Northern Pass "can be done in the next four to five years and it will guarantee supply right away and help you with your emission target by 2020," he said. "In terms of the speed to market, it is clearly probably the best path to go."
The project faced stiff opposition in New Hampshire, where residents worried that the transmission lines would disturb the natural beauty of the White Mountains. Martel said New Hampshire now talks about the project more positively, in part because of the decision to put 52 miles of lines underground through the White Mountains region.
"We feel it's going in the right direction. The process will probably take a little longer than we expected at the beginning, but we feel that by September next year we will have the answer," Martel said. "We'll be ready to roll, we're already getting ready for building. We could be up and running in '19 delivering to Massachusetts and the other states that need it."