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Avangrid Power Line Rejection Deals Blow to Emissions Goals (2)

Nov. 3, 2021, 8:09 PMUpdated: Nov. 3, 2021, 9:37 PM

The $1 billion, 145-mile-long transmission line project from Avangrid Inc. had secured permits, survived years of legal challenges, and fulfilled the White House’s national clean energy goals.

On Tuesday, about 60% Maine voters didn’t see what was in it for them and rejected the partially built project.

The voter referendum on Central Maine Power’s New England Clean Energy Connect project dealt a blow to the Biden administration’s push for net-zero greenhouse gas emissions from the power sector by 2035. And it heaps pressure on federal energy regulators to accelerate their national overhaul of transmission planning, which can be stymied by local opposition in one state.

“This is a major setback, to be sure,” said Rob Gramlich, executive director of the Americans for a Clean Energy Grid and founder and president of Grid Strategies LLC, a Washington-based consulting firm.

“We have a lot of work to do to explain to a few hundred million people around the country that the grid is the key to a clean energy future,” said Gramlich, who oversaw transmission and power market policy for the American Wind Energy Association from 2005 through 2016.

‘A New Level’

Transmission lines, as with other large infrastructure projects, have long faced local opposition from residents, particularly in states that neither produce nor receive the power, industry experts acknowledged.

But Maine’s referendum takes such opposition to “a new level” by moving voters to the ballot box, Michael Skelly, founder of Grid United, a Houston-based clean energy transmission company.

“I’d say this is something to watch, in the same way gas pipelines got killed in the Northeast,” Skelly said. “It’s obviously discouraging for anybody trying to do this stuff.”

Meanwhile, two Avangrid subsidiaries announced Wednesday that they’re challenging the ballot initiative outcome, known as Question 1, in Maine Superior Court, arguing that it violates state and federal law.

Renewable energy companies are going to need to be ready for a public relations fight from the fossil fuel industry when they pursue projects, said Thorn Dickinson, president and CEO of the New England Clean Energy Connect project.

“Clearly this was an out-of-state company fighting this because it means less profit for all their fossil fuel generation in New England,” Dickinson said.

“This is a battle that’s going to be fought all over the country, and I don’t think there’s an easy answer,” he said. Oil and gas companies “are going to be looking at this strategy against these projects all across the country, and informing others about how to fight them.”

Growing Frustrations

Avangrid and Hydro-Quebec, supplier of the hydropower, squared off against NextEra Energy Resources of Florida and Calpine Corp. and Vistra Energy Corp. of Texas in the fight over the project.

The corridor is designed to convey carbon-free power from Canada to the New England energy grid, serving mostly ratepayers in Massachusetts, who were to pay for the project.

The opposition was largely funded by three energy companies that operate natural gas and nuclear plants in Maine. Among the opponents were environmental groups like the Sierra Club and Natural Resources Defense Council.

“I am frustrated by environmental groups who say they care about climate partnering with fossil interests,” said Gramlich said.

The Sierra Club is a longstanding believer in carbon-free energy, but “we want to focus on the projects we know will have the least impact and are cost effective,” such as solar and wind energy projects, said Matt Cannon, campaign and policy associate director at Sierra Club Maine.

“Megadams are not part of the solution for fighting climate change,” Cannon said.

Transmission projects already face tough challenges due to regulatory hurdles.

This year, the Federal Energy Regulatory Commission launched a proceeding to tackle ways to better plan for transmission—a process that will likely take years before any final rules are put into place. The Energy Department has launched studies to try to promote national transmission corridors.

‘We Have Work to Do’

The Maine referendum highlights shortcomings beyond Washington regulators, said Gregory Wetsone, president and CEO of American Council on Renewable Energy.

“Obviously, we have work to do in terms of public education,” Wetstone said during a webinar on power grid issues on Wednesday. I think we’ve made headway with policy-makers, but we’ve got to go further and deeper, clearly,” he said.

Transmission advocates are “at a loss” with how to deal with such a politically mobilized opposition, said Larry Gasteiger, executive director of WIRES, a trade association that advocates for more investment in transmission infrastructure to support clean energy integration.

He urged his association’s members to highlight the benefits for the broader economy, power bills and cleaner environment — a marketing campaign that is an “ongoing and never-ending process,” he said.

The Maine vote is a “bad harbinger of transmission projects elsewhere potentially, to the extent that it provides a road map for others to try to use referendum processes in their state to overturn transmission projects or raise higher hurdles,” Gasteiger said.

(Updates with additional reporting. An earlier version corrected the length of the project in the first paragraph.)

To contact the reporters on this story: Daniel Moore at dmoore1@bloombergindustry.com; Tripp Baltz in Denver at abaltz@bloomberglaw.com

To contact the editor responsible for this story: Rebecca Baker at rbaker@bloombergindustry.com