If it fails to carry out its interconnection line project in Maine, Hydro-Quebec should register a charge of more than 500 million dollars in its results, estimates the state company.
The 336 kilometer project that would cross Quebec and the American state to bring electricity to Massachusetts was rejected by 59% by the citizens of Maine during a referendum last November.
The future of the project is in the hands of the Supreme Court of Maine, which will have to determine whether the result of the referendum is unconstitutional, as claimed by Hydro-Québec and its partners. Until then, work is suspended.
If the project were to be abandoned, Hydro-Québec estimates that it will have to record a charge of $536 million in its results, according to its annual report.
This amount includes property, plant and equipment costs of $347 million which will be charged to earnings. This represents more than half of the $600 million budget planned to build the Quebec portion of the line, which is 103 kilometers long.
The other $189 million represents amounts that the company has agreed to pay under agreements.
The opinion issued in the annual report does not take into account election expenses of US$22.3 million, the equivalent of C$28 million, made by Hydro-Québec, according to the most recent data from the Ethics Commissioner of Maine.
In 2019, Hydro-Quebec also recorded a charge of $46 million for the abandonment of the Northern Pass line project, which was to carry electricity from Quebec to Massachusetts, via New Hampshire.
The electricity sales contract with Massachusetts would bring in revenue of $10 billion over 20 years for Hydro-Quebec. It would reduce greenhouse gas emissions by 3 million metric tons, the equivalent of taking 700,000 cars off the road.
Stopped in the middle of construction
This is the first time that Hydro-Québec has provided an estimate of the costs of a possible abandonment of the project. Hydro-Québec’s partner in Maine, NECEC, has already spent nearly US$450 million, which represents 43% of the anticipated costs, according to documents filed in court.
Despite the suspension of work, the state corporation is not giving up. “Hydro-Québec remains convinced of the value, merits and importance of the NECEC project,” replied Caroline Des Rosiers, company spokesperson. Given the ongoing legal proceedings, there is no indication that the project will be abandoned and Hydro-Québec remains very confident about its completion. »
The Supreme Court of Maine authorized, in January, the adoption of an accelerated schedule to hear the request of the partner of Hydro-Quebec. The start of the oral argument is scheduled for May 9.
NECEC and Hydro-Québec believe that the referendum is unconstitutional and that the project, whose construction began in early 2021, has an acquired right. “Remember that the NECEC project has obtained all its permits, after a rigorous process of more than 30 months with the many American regulatory authorities,” adds Ms. Des Rosiers.
Another cause will also be decisive for the project. Permits for a portion of the 1.6 kilometer line are also in dispute. A Maine Superior Court judge struck down the permits in question granted by the government in 2014 and the ruling is on appeal.