By Michael Kuser

Avangrid said this week it expects to begin construction this year on the New England Clean Energy Connect (NECEC) project to bring Canadian hydropower to Massachusetts despite a potential referendum on the project in Maine.

“We still expect to start construction in the third quarter of 2020 and start operation by the end of 2022,” CEO James P. Torgerson said on the company’s earnings call Tuesday.

Torgerson said the $950 million, 1,200-MW project won certification from the Maine Land Use Planning Commission on Jan. 8 and the state Department of Environment Protection’s final decision is expected in April, with the U.S. Army Corps of Engineers approval expected 60 to 90 days later. ISO-NE approval is expected in the first quarter.

A presidential permit, which is not needed to start construction but is to cross the border, is expected to be issued approximately 60 days after the corps’ and RTO’s approvals.

Although most of the 145-mile line would follow existing utility paths, it would require removing trees for 53 miles through western Maine. On Feb. 3, opponents of the project submitted more than 75,000 signatures to election officials, above the 63,000 signatures that must be certified to put the issue on the November ballot.

While opposition to the transmission project remains, “we have contributed resources for our political action committee, called Clean Energy Matters, dedicated to helping Maine voters understand the benefits of NECEC and correct misinformation about the project,” Torgerson said.

Earnings

Torgerson said the company was “very disappointed with our financial results, which were below our expectations.” The company reported net income of $700 million ($2.26/share) for 2019, compared to $595 million ($1.92/share) for the previous year. But adjusted net income for the year was $673 million, down from $684 million in 2018. In the fourth quarter, earnings were $223 million ($0.72/share) versus $119 million ($0.38/share) a year earlier.

The company said low wind production hurt results in its Renewables business, while its Networks business was hit by outage restoration and staging costs and a penalty over its 2018 storm response in New York. (See NYPSC Dings Utilities for 2018 Reliability, Safety.)

But the company said it will benefit soon from higher rates in New York and Maine. Torgerson announced that the company would notify the New York Public Service Commission, in a letter filed Wednesday, that they had reached settlement in the New York State Electric and Gas and Rochester Gas and Electric rate cases.

“We recently received a final decision from the Maine Public Utilities Commission in the [Central Maine Power] distribution rate case and the metering and billing dockets,” Torgerson said. “Now our rate cases in New York and Maine represent about 55% of our total rate base with new rate plans going into effect this year. In Maine, it will be on March 1, and then in New York, it should be in May, depending on the settlement [that] we’re drafting now.”

Renewables

While the Renewables division continues with its onshore wind and solar growth, having completed 831 MW of projects last year and projecting 700 MW of new projects to be completed in 2020, the company also is looking offshore for future growth.

Avangrid is a 50/50 partner with Copenhagen Infrastructure Partners in Vineyard Wind, which has separate 800-MW offshore wind contracts with Massachusetts and Connecticut. It also controls a wind lease area off North Carolina in its own right.

The U.S. Bureau of Ocean Energy Management in February published a revised timetable for Vineyard Wind, with a final supplemental environmental impact study on Nov. 13 and the record of decision by Dec. 18. (See Offshore Wind Slogs Forward in Massachusetts.)

“Considering the revised base case, we target a commissioning date no earlier than 2023, [and] we also see no risk of the [power purchase agreement] termination under a later commissioning date,” Torgerson said. “The good thing is, with this later date, it will also help develop synergies with our Park City Wind. … Our Vineyard Wind joint venture was selected in Connecticut’s offshore wind [request for proposals] in December.”

In October, Vineyard Wind announced it had selected Marmon Utility to supply cables for the Connecticut wind farm. “Park City Wind has the potential to establish Bridgeport as an offshore wind hub,” Torgerson said.

Avangrid’s Kitty Hawk lease area off North Carolina, which has a potential capacity up to 2.5 GW, received Site Assessment Plan approval by BOEM on Feb. 20, he said.

Earnings call transcript courtesy of Seeking Alpha.