Massachusetts approves contracts for hydroelectricity through NECEC project

NECEC hydro project

The Massachusetts Department of Public Utilities has issued an order approving long-term contracts for 9,554,940 MWh annually of hydropower between H.Q. Energy Services (U.S.) Inc. and the Commonwealth’s electric distribution companies through the New England Clean Energy Connect 100% Hydro project (NECEC Hydro).

These contracts stem from An Act Relative to Energy Diversity, signed by Governor Baker in 2016, and will enhance reliability, ensure a resilient energy future for the Commonwealth, and secure progress toward greenhouse gas reduction requirements, according to the department. This project, which is undergoing permitting review in the State of Maine, represents the largest procurement of clean energy in the Commonwealth’s history, increasing Massachusetts’ electricity supply to nearly half coming from clean energy resources.

“Moving forward with these hydroelectricity contracts is an important next step toward providing Massachusetts ratepayers with additional clean energy resources that will reduce monthly energy bills, cut greenhouse gas emissions and improve winter reliability,” said Governor Charlie Baker.

The NECEC hydro bid was selected for contract negotiation in February 2018 based on criteria established under a request for proposals submitted to the DPU for review and approval on July 2018. The criteria used to evaluate the bids included factors that help mitigate winter price spikes, enhance electricity reliability within Massachusetts, avoid line loss, mitigate transmission costs while ensuring that transmission cost overruns, if any, are not borne by ratepayers, and foster employment and economic development in Massachusetts. The NECEC hydro bid was determined to provide the greatest overall value to Massachusetts customers by delivering about 9,554,940 MWh of capacity per year while providing substantial ratepayer benefits. The DPU’s order approved the selection and found that these contracts are cost-effective and in the public interest.

With a total levelized price of 5.9 cents/kWh (in real 2017 dollars) for clean energy and transmission, this project is expected to provide about 2% to 4% savings on customers’ monthly energy bills, all other bill impacts remaining equal. Overall, the total net benefits, including direct and indirect benefits, to Massachusetts ratepayers over the 20-year contract are expected to be about $4 billion.

Electricity provided by the NECEC Hydro project would be supplied by Canadian utility Hydro-Quebec.

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