Central Maine Power’s $950 million hydropower project could top $1.1 billion when the interest costs for the project are considered.
The higher amount for the proposed New England Clean Energy Connect project was stated in an order issued by the Federal Energy Regulatory Commission on Oct. 19 approving the transmission service agreements between CMP and three Massachusetts electricity distributors in June.
“Central Maine Power estimates that the NECEC project will cost approximately $1.1 billion,” the order, signed by FERC Deputy Secretary Nathaniel J. Davis Sr., said. The order was effective Oct. 20.
The extra $600,000 is for the allowance for funds used during construction, said John Carroll, a spokesman for CMP’s parent company Avangrid. He said it is for interest CMP must pay on the project until 2023, when the company starts receiving compensation for the energy that starts flowing from the project.
“We’ll get that back in 2023,” he said. “The $950 million in capital costs in the bid to Massachusetts is the same.”
Even with the higher total price tag, the CMP bid still is lower than the competitive bids from Vermont and New Hampshire.
Separately, CMP on Oct. 18 notified Maine regulators that it would bury a power line near the Kennebec River Gorge instead of stringing it above the gorge. The power line is contentious among environmentalists and tourists as a potential eyesore.
CMP said in the spring that it could cost upwards of $37 million to bury the line. But a company witness testified at a Maine Public Utilities Commission meeting earlier this week it would cost about $31 million. Carroll said the cost still is being honed.
Avangrid said Wednesday it has moved a step closer to getting the needed certificate for the hydropower project in western Maine.
It made the comment as it released third quarter financial results. Using generally accepted accounting principles, net income for the quarter was $125 million for the third quarter ended Sept. 30, up from $99 million for the same quarter in 2017.
Avangrid CEO James Torgerson said two major projects are advancing. One is the Vineyard Wind, a wind farm that will be located offshore of Massachusetts, which agreed on 20-year contracts with the Massachusetts Department of Public Utilities in August.
The NECEC passed two key hurdles this year. In June CMP and the Massachusetts electricity distributors agreed on contracts. Those contracts still required Massachusetts DPU and other approvals.
Torgerson said today the proposed project got another key approval from FERC, which accepted those transmission service agreements ahead of schedule.
“We are another step closer to achieving the project’s Certificate of Public Convenience and Necessity in Maine. Both Vineyard Wind and NECEC are on track, and we expect all permits and final approvals in 2019,” Torgerson said.
FERC indicated the transmission rate and CMP’s return on equity are reasonable.
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