Three months after referendum, NECEC battles for survival amid legal challenges

Feb. 6—Three months after Maine voters endorsed a law aimed at preventing the New England Clean Energy Connect transmission line from moving ahead, opponents are working on at least four legal fronts to decisively kill the embattled project in 2022.

As they proceed, teams of lawyers representing project developer NECEC Transmission LLC are doing their best to keep the $1 billion venture alive.

Some Maine residents may have felt a sense of finality on Nov. 2, after nearly 60 percent of voters rejected the NECEC project through a ballot initiative. That feeling may have been reinforced on Nov. 23, when the Maine Department of Environmental Protection suspended the project's construction license, or on Dec. 16, after a Business and Consumer Court judge ruled against an injunction request by Avangrid, the parent company of NECEC and Central Maine Power, to keep the law from taking effect.

But those developments don't mean the project is dead. Avangrid and NECEC appealed the ruling to the Maine Supreme Judicial Court in late December, in a case called Avangrid Networks v. Bureau of Parks and Lands.

Avangrid maintains that the new law is unconstitutional and deprives the company of its "vested rights" to finish the project after receiving permits and spending $450 million on construction. Opponents say Avangrid took a risk and was well aware of the legal challenges it faced.

Written briefs are scheduled to be filed over the next three months at the Law Court, and oral arguments are tentatively set for early May. Some observers expect a decision by early summer.

But based on scheduling activity late last month at the court, a key proceeding set for early March could supersede the ballot question battle in deciding NECEC's fate.

"The project is either going to be dead in 2022, or it's going to go forward," said Jamie Kilbreth, a lawyer representing project opponents. "I don't see any alternatives."

NEXT UP: PUBLIC LAND FIGHT

Kilbreth, a former deputy attorney general, was referencing the Law Court's scheduling of oral arguments for the second week in March in a case involving a contested nine-tenths-of-a-mile lease for the transmission line to cross public lands in western Maine.

NECEC opponents say the lease was not properly negotiated. Last August, a Superior Court judge agreed and reversed a decision by the Maine Bureau of Parks and Lands to lease the land to CMP. The company appealed the judge's ruling in a case called Russell Black v. Bureau of Parks and Lands.

To follow its preferred route, CMP signed a lease in 2014 with the bureau to cross two public lots in the Upper Kennebec Valley, off U.S. Route 201. At issue now is whether the agency properly conducted an assessment of whether the lease would cause a "substantial change" to the public land. A 1993 amendment to the Maine State Constitution requires a two-thirds vote of the Legislature to approve any substantial change.

Project opponents, Avangrid and the state of Maine have over the past month been filing competing briefs with the court. Opponents want the court to dismiss the public lands appeal as moot because of the ballot initiative's passage. Avangrid argues against doing that, saying it would preempt the court's consideration of an important public matter.

At a Maine Department of Environmental Protection hearing last October, NECEC executives said they might sidestep the lease issue by running the high-voltage cable under the public lots or via one of two alternative routes. But the viability of those options is in dispute and, in any event, would require new environmental studies and permitting that would be contested and take considerable time.

Time is an enemy of the project. NECEC's chief executive, Thorn Dickinson, told the DEP in testimony last fall that a delay reaching into the summer of 2022 would make it impossible to put the project in service by August 2024, a contractual deadline with utilities in Massachusetts. That date could be extended until August 2025, Dickinson noted, if the company posted up to $10.9 million in additional security. He also estimated that a 12-month delay would add roughly $67 million to construction costs.

Work on the project stopped in mid-November. In December, crews stabilized the corridor, per DEP's order, to limit erosion over the winter. In a statement last week, NECEC said that the project site is secure and continues to be monitored and inspected. Specialized rental equipment has been returned, and the workforce — the majority of which was hired locally — has been released from the project.

Asked about what preparations the company was making to restart construction in the event of favorable court rulings, NECEC replied: "We are working on the restart and construction sequence scenarios taking into account time-of-year restrictions, status of material deliveries, the time necessary to remobilize construction, and the requirements of our permits."

But NECEC's plans also may be complicated by a new development in Canada. On Jan. 19, NECEC's partner, Canadian hydroelectric producer Hydro-Quebec, informed federal regulators that it has suspended work on clearing the corridor that would connect its energy resources to the Maine grid. Hydro-Quebec said it hopes to resume work on its Appalaches-Maine interconnection, but that it was contingent on resolving the legal challenges in Maine.

'DEATH BY A THOUSAND CUTS'

The NECEC project is designed to bring 1,200 megawatts from Hydro-Quebec to the New England electric grid over a 145-miles route and through a converter station in Lewiston. The project is being built to help Massachusetts meet its clean energy goals and is being paid for by that state's electricity customers. It would have the capacity to power roughly a million homes.

NECEC was first proposed in 2017, after a similar project was killed in New Hampshire. To satisfy contracts with Massachusetts utilities, NECEC is under intense pressure to complete the project by August 2024.

Outside of state court, opponents have contested a conditional permit to CMP for the project issued by the state DEP in May 2020, and a subsequent permit transfer in December 2020 to NECEC Transmission. In addition, they are appealing the DEP's May 2021 approval of some changes in its initial permit to the Board of Environmental Protection, the citizen appeals body.

The BEP was set to take up the issue Feb. 17. But in late January, it postponed the meeting and will reschedule it.

"They have stretched this out so long," said Pete Didisheim, advocacy director for the Natural Resources Council of Maine. "We appealed in 2020. They may just slow-walk this further and wait until the Avangrid case is heard by the Law Court."

Losing the ballot case would be a fatal blow for Avangrid, in Didisheim's view.

"Either that or the Black case, those are both perilous for them," he said. "Those will be decided this year and could result in the end of the project."

NECEC also faces a hurdle on the federal level.

Opponents contend that the U.S. Army Corps of Engineers, which reviews projects for their impacts on certain wetlands, didn't give the NECEC plan a rigorous enough review. Three conservation groups, the Natural Resources Council, the Sierra Club and the Appalachian Mountain Club, filed suit in October 2020 in federal court. They have until early March to tell the court whether they intend to go forward with their challenge. The case may end up on hold until the referendum issue is settled in Maine.

Taken together, these cases and the impact of mounting delays make it unlikely that NECEC can find a path forward, according to Tom Saviello, a leader of the ballot initiative campaign.

"Some people have described it to me as death by a thousand cuts," Saviello said. "I don't take anything for granted, but I feel pretty good."