Chafee eyes stronger link to Canadian hydropower

The powerful rivers that course through Canada’s vast northern wilderness helped define the country and are one of its greatest natural resources. Using dams and turbines, Canada has tapped the rivers to build a growing hydroelectric industry, with New England as its chief export market.
As New England governors are eager to reduce their states’ carbon footprints, Canadian leaders see the potential for more growth. Thus, in recent talks with their Canadian counterparts, the region’s governors have proposed a regional initiative to greatly expand power imported from the North in long-term power contracts.
Vermont already buys energy from Quebec-Hydro, the government-owned power company that dominates large-scale hydroelectric power production north of the border.
Gov. Lincoln D. Chafee, a long-time supporter of Canadian hydropower, has proposed a law to spur increased power imports from Canada. But opposition to Chafee’s proposal has sprung up from utility National Grid and environmental groups, with both questioning whether it benefits Quebec-Hydro more than Rhode Island.
In Rhode Island, National Grid imported 13 percent of the electricity it sold to customers in May, according to a monthly disclosure notice, although how much of that was hydro is not specified. Small-scale domestic hydropower facilities produced 4.5 percent of the state’s energy.
The Chafee-backed bill would require National Grid to solicit bids for a 150-megawatt, 15-year energy contract from “large-scale” hydropower producers, of which Quebec-Hydro appears to be the only firm to qualify.
National Grid opposes the bill out of concern that it will hike Rhode Island electricity prices at a time state ratepayers are likely to be absorbing the costs of offshore wind power projects.
National Grid officials say such a mandate would put them in a poor negotiating position and give Quebec-Hydro the leverage to extract a high rate from Rhode Island customers.
“As currently written, the proposed Energy Reform Act of 2013 does not put National Grid in the best position possible for the company to acquire hydro power at the best price for our customers,” said National Grid spokesman David Graves in an email statement about the bill. “The legislation places increased, and unfair, leverage in the hands of the energy sellers.” The Energy Council Rhode Island, a group that advocates on behalf of commercial energy customers, has asked for the bill to be held until after a statewide energy plan under way is completed.
If legislation is passed, Energy Council Executive Director Bill Ferguson said he would like to see language changed so that price would be the main criteria in judging a potential hydropower purchase.
On the environmental side, the Conservation Law Foundation, which helped write parts of Rhode Island’s existing renewable energy laws, argues the state should be supporting the creation of new “clean-energy” production instead of existing sources like Quebec-Hydro’s plants.
“We are not opposed to hydro or large hydro,” said Conservation Law Foundation attorney Jerry Elmer, “but the 2004 Renewable Energy Standards were created to facilitate new renewable energy and Quebec-Hydro is 25 years old.”
With electrical rates expected to rise as a result of the Deepwater Wind Block Island demonstration project and a larger wind farm planned for federal waters, Elmer said raising energy costs for Canadian hydro doesn’t make sense.
“The long-term contracting law was designed to help projects that could not be created,” Elmer said. “Quebec-Hydro doesn’t need the help.”
In addition to the fact that it already exists, there are also questions about how green hydropower really is.
While they don’t burn fossil fuels or directly emit carbon, hydro plants require the damming of rivers, which alter habitats and flood formerly carbon-capturing forests.
Getting the power here is also an issue, as current power lines don’t have the capacity needed to significantly expand transmission to Southern New England.
A proposal to build a series of new transmission lines through New Hampshire, called Northern Pass, is drawing environmental opposition that includes CLF.
While Hydro-Quebec already has 36,000 megawatts of capacity in its existing plants, the company is now building a 1,550 megawatt plant on the St. Lawrence River called the Romaine Complex that will grow export capacity further. “Historically, New England has been Hydro-Quebec’s most important export market,” said Hydro-Quebec spokeswoman Ariane Connor in an email. “It is a tradition that we plan on continuing. Hydro-Quebec has an abundance of clean, reliable, economically priced electricity that offers our neighbors added fuel diversity. As such, we are always looking for new customers.”
R.I. Energy Resources Commissioner Marion Gold said Chafee’s proposal is not a sweetheart deal for Hydro-Quebec, but instead a framework for Rhode Island to explore whether Canadian hydropower could benefit the state.
“[Hydropower] is important because in New England we are relying so much on natural gas for our electrical needs and home heating – this winter we came close to a shut down when the natural gas supply was constrained,” Gold said. “From an energy-security standpoint we feel it is important to diversify.”
Gold noted that Chafee’s proposal would not, like the bill recently passed in Connecticut, make Canadian hydropower eligible for renewable energy credits, nor would it count toward its renewable energy mandates.
Instead, Gold said the bill is intended to let Rhode Island participate in the New England-wide effort to buy Canadian hydropower using the bulk purchasing power of multiple states to get a better price than individual states could get on their own.
The bill directs National Grid to execute a contract only if “commercially reasonable proposals have been received.”
Addressing concerns over whether Canadian hydropower will end up slowing or forcing out local renewable energy development, Gold said it would be the job of state regulators to make sure that dirtier energy sources – not renewable – are replaced by the imported electricity.
Environmental concerns about the Northern Pass project could also be alleviated through alternative plans to increase transmission capacity from Canada, Gold said.
“Will Canadian power be competitive on price? That’s what we want to find out,” Gold said. “We are convinced we are generating too much carbon, and if we can displace a dirtier source that would be a good thing.” •

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