In 2016, the Massachusetts Legislature passed a law that would force the state to diversify its energy sources. It was a sensible, visionary move from the point of view of environmental stewardship and sourcing reliability, mandating that 1,200 megawatts of the state's energy eventually come from clean sources, and 1,600 megawatts from renewable sources offshore. This would amount to about 17 percent of the state's annual electricity needs, according to Acadia Center, a nonprofit clean energy advocacy group.
A decision made last week by a group of Massachusetts utilities and the Department of Energy Resources to choose a hydroelectric supplier from Canada as one of the Bay State's energy suppliers is an important step toward attaining this goal, as hydro could join solar and wind in reducing the state's dependence on fossil fuels. However, the nature of the process used to determine that supplier raises questions.
For example, it is curious that out of approximately 40 bids submitted by suppliers, the one chosen, Northern Pass, happens to be a joint undertaking by Hydro-Quebec and another company with whom many Massachusetts ratepayers are familiar: Eversource. Eversource was part of the utility consortium evaluating the submissions, and will be one of the distributors of this energy that will come into the Commonwealth by way of Vermont and New Hampshire. The opportunity to control the product from generation to sale would appear to be a sweet deal, indeed.
The Eversource/Hydro Quebec choice may well be the most advantageous for ratepayers, but information that would sustain such an assessment remains elusive. Eversource has been less than transparent when it comes to explaining why its Western Massachusetts customers must pay higher costs and bear a larger per-capita share of a coming rate increase than their Eastern brethren. It is not reassuring, therefore, that during a conference call announcing the decision to go with Northern Pass, Energy Resources Commissioner Judith Judson lauded the pick as "cost-effective," but declined to provide any solid evidence that would support her department's choice. According to State House News Service, state officials "could not say" whether the vote by the independent evaluator used to pick the winner was unanimous.
This procurement is so large that, if realized, it would satisfy the state goals set forth in the 2016 law. In so doing, it will go a long way toward assuring the Commonwealth's energy security into the future. Unfortunately, the entire undertaking has already managed to shroud itself in the kind of obfuscating fog that tends to surround Eversource and its dealings with state officials and regulators.
The Canadian electricity is slated to begin flowing by the end of 2020, which would appear on its face to be a remarkably optimistic prediction, considering the hoops that will have to be jumped through and the challenges posed by the laying of lines, including underground lines in sensitive areas like the White Mountains. We hope that through these as well as an open contract negotiation process (due to be completed in April and then reviewed by the Department of Public Utilities) more clarity will be provided as to why this particular entry was chosen, and whether in fact it is the best deal for Massachusetts electricity customers.