The SEC Decision to Deny Northern Pass

On Thursday Feb. 1, the New Hampshire Site Evaluation Committee voted 7-0 to deny Northern Pass a Certificate of Site and Facility. To understand the SEC decision, it’s helpful to look at the transcripts of that day’s deliberations by the SEC subcommittee members.

In the morning, Chair Martin Honigberg explained the process.

“I'm going to summarize the statute and the rule and the question,” he said. “The statute is RSA 162-H:16, the required findings regarding the issuance of a certificate. Roman IV says, "After due consideration of all relevant information regarding the potential siting of routes of a proposed energy facility, including potential significant impacts and benefits, the Site Evaluation Committee shall determine if issuance of the certificate will serve the objectives of this chapter. In order to issue a certificate, the Committee shall find that," and Paragraph 24 (b) says, "The site and facility will not unduly interfere with the orderly development of the region, with due consideration having been given to the views of municipal and regional planning commissions and municipal governing bodies."

Honigberg continued: “We have two rules that are directly relevant to this criterion. One is Site 301.15, which are the Criteria Relative to a Finding of Undue Interference, and it says, "In determining whether a proposed energy facility will unduly interfere with the orderly development of the region, the Committee shall consider: (a) the extent to which the siting, construction and operation of the proposed facility will affect land use, employment and the economy of the region; (b) the provisions of and financial assurances for the proposed decommissioning plan for the proposed facility; and (c) the views of municipal and regional planning commissions and municipal governing bodies regarding the proposed facility."

Honigberg then said “…we're going to ask people [subcommittee members] to say where they are as a way of bringing the discussion about orderly development to a close.” He went on to point out that “it is the Applicant's burden to establish, more likely than not, that there will not be an undue interference with the orderly development of the region.”

Then each member said whether they thought Northern Pass had met the required burden of proof, and why.

Chris Way, the representative from the state department of economic resources, began:

• “Regarding land use, I was not convinced that the entire project would be consistent with the prevailing land use,” Way said.  “I think we pointed out several areas where we had concerns. I think we brought up the issue of that tipping point when it's no longer conforming with what was the original intent and design for the ROW.”
• “The same thing I think with the references to the zoning as well. In many cases, I thought that it tended to suggest other than what the Applicant was suggesting.”
• “I do not believe the Applicant has met the burden of proof that there will be no impact on tourism. I'm not sure I know one way or the other. I was critical of the methodology and findings. I did not find them to be particularly adequate or convincing. I did not find the witness to be particularly knowledgeable about the state, its tourist destinations, and I didn't feel there was an adequate outreach to attempt to fill that gap.”
• “Impact to property values. In the same vein, I'm not sure I accept the argument that there will be no impact to property values. It just doesn't make sense to me that there won't be any. But once again, if we sort of wash it into a region, I guess that's the statement that can be made. But I just don't think it passes the "straight-face test" that there will be none. I think we've heard some good testimony to suggest that it could be just the opposite.”

Public member Rachel Dandenau was next to express her conclusions:

• “And then in summarizing my own thoughts over the last couple of days...I am not convinced that the construction phase of this project would not have an impact on tourism and the economy.”
• “I'm also specifically concerned about those businesses and residences who will be impacted by underground construction. Their travel to and from work,school and emergency care access also concern me.”
• “In terms of land use, I'm concerned about vegetative clearing, particularly in the new right-of-way up north, in that that vegetative clearing will have an impact on land use. I don't agree with Mr. Varney's testimony that, because 80 percent of the Project is proposed to be in an existing right-of-way, that it does not change land use.”
• “In terms of property values, I agree with a lot of what was said by the Subcommittee over the last day or so. I did not find the analysis credible or convincing, and I do have concern about this project's impact on property values.”
• “I guess one last comment on tourism. I don't feel that we have in front of us at this point in time an analysis of what the construction phase of this project would or would not have on tourism. I feel that this is an oversight by the Applicant and their experts.”

Patricia Weathersby, also a public member of the subcommittee went next:

• “Concerning land use, the Applicant's continued insistence that because the Project is in an existing corridor doesn't take into account that that corridor isn't zoned. It goes through land that is zoned for something else. It's not, in most cases, industrial or commercial land, but it's zoned for agricultural or residential, et cetera, and the municipalities have specific guidelines for the use and development of those areas.
• “I do think there's a tipping point in which the nonconforming use, such as the use of the corridor for the Northern Pass Transmission Project, becomes a different use in some places, and I do believe that will be thecase. As to the new right-of-way, my concerns, similar to Ms. Dandeneau's, those areas particularly outside of the Wagner Forest, the Project will be very inconsistent with the prevailing land uses there to a very large degree.”
• “And as I considered the views of the municipal and regional planning commissions and municipal governing bodies, I also find the Project to be contrary to almost all such views, and I do give that some weight.”
• “Concerning tourism, I also believe the Applicant didn't demonstrate that there will not be undue interference to tourism from this project either during construction, and particularly over the long term. The analysis by Mr. Nichols was deficient in many respects, and I was left unpersuaded that New Hampshire tourism will not be unduly influenced in a negative manner.”
• “So I also agree with my colleagues that the Applicant has not met its burden to show that the Project will not unduly interfere with the orderly development of the area.”

Next up was William Oldenberg, from the New Hampshire Department of Transportation:

• “I agree with Mr. Way's assessment of the impacts on tourism. I believe there will be an impact on tourism.”
• “I do believe, as the other folks have stated, that the property values will be impacted in a negative way and that land use, especially up north, would be impacted.”
• “I would say that they haven't met their burden of proof overall and that they will -- it will have an unreasonable impact on orderly development. ...That's my bottom line.”

Craig Wright, of the New Hampshire Department of Environmental Services, was next:

• “With respect to land use, I do have some concerns about the new right-of-way, but I think that my primary concerns are in the existing right-of-way. I think Ms. Weathersby mentioned the idea of a "tipping point." I wasn't overly convinced by the argument that because you have an existing right-of-way with utilities, then this would be consistent with local land use. I say that in consideration of, one, not only the new line coming in, but also the work that needs to be done to accommodate the new line in terms of moving other lines within the right-of-way. I do view that as having a potential significant change on the local land use in many areas of the state.”
• “With respect to the real estate values, I did not find the witness credible. I thought there was a lot of gaps. I thought we received significant evidence from other parties that there could be real estate impacts from the Project.”
• “Tourism.  Again, I didn't find the witness credible for a number of reasons that have already been stated by others.”
• “I think we saw in some cases there was a clear desire by local communities to maintain the rural nature of their town. And I have questions as to whether, given the scope, scale and size of the Project, that we would be able to accomplish that. I think in some cases we saw some local ordinance that specifically mentioned burying transmission lines, and the Project was not proposed to be buried in that area.”
• “I think when I take all of that into my mind, I would feel that the Applicant has not met the burden of proof with respect to unduly interference with orderly development.”

Next was Kathryn Bailey of the New Hampshire Public Utilities Commission:

• “But I still have a concern about the local town roads and the burial in those roads, and I'm not sure I have enough evidence to conclude that it can be constructed -- that we should preempt the towns.
• “With respect to property values, I don't believe that the Applicant has met its burden to demonstrate that there will not be an impact on property value.
• “So we really do have to take into account the views of municipal officials, and those have all been very negative and have in many cases demonstrated their belief that this is not consistent with their master plans, their zoning ordinances. So, therefore, I don't think that the Applicant has met is burden of proof with respect to that either.”
• “So, overall, I think that the evidence that we have lacks the information that I would need to make a finding that there is not an undue -- let me get the statute right... that the site and facility will not unduly interfere with the orderly development of the region.”

Chairman Honigberg, also from the New Hampshire Public Utilities Commission, was the last to weigh in:

• “I am perhaps more concerned than others about the consistency with prevailing land uses from the Canadian border through to the transition station in, I think it's Bethlehem, where the long underground passage starts. I think in Pittsburg and Stewartstown and Clarksville, the above-ground sections, except perhaps in the Wagner Forest, are inconsistent with the current -- with what is currently there.”
• “But I -- unlike some of the others, while I recognize energy market savings are likely, and there seems to be no dispute about that, those are small. Those are a tenth of what the projected capacity market savings were supposed to be. And I know there's a lot of people in this room, in this state, who are concerned about electric rates, that the rates are too high, that electric bills are too high. That has an effect on the economy. But the savings from this project, demonstrated savings, are small.”
• “Well, the energy market savings are very small. And I would note that the energy market savings and the capacity market savings, to the extent they can be realized, can be realized by any similar project should Massachusetts decide not to go with Northern Pass, or if Northern Pass is not certificated and they have to go in another direction. The testimony from all of the experts is the same, that any similar project will deliver the same benefits to New Hampshire's ratepayers.”
• “I do not believe the Applicant met its burden to demonstrate that the Project would not unduly interfere with the orderly development of the region.”

The Formal Vote

The discussion in the morning indicated that based on the record, the SEC subcommittee members each concluded that Northern Pass had not met the burden of proof on the Orderly Development standard.

After lunch, the subcommittee reconvened. Kathryn Bailey made the initial motion to deny the Certificate, seconded by Rachel Dandenau. There was discussion.

“This morning's straw vote was revealing to me,” said Chris Way. “In that I was sort of somewhat surprised of the amount of agreement that we had amongst each other. I was also a little surprised that each time I heard from our different disciplines, I found that I agreed more and more on certain things that even I wish I had said. And, so, I guess my point is, on orderly development, it's not even close, doesn't seem close to me. That it's not something where we're going to be able to come back and walk out of it. It seems like that -- that today was sort of a decision point, and it would be hard to go somewhere from here.”

The subcommittee discussed the pros and cons of ending the deliberations. With respect to the administrative record overall, Chair Honigberg said,  “I mean, that said, I have a lot of confidence in the work that the Subcommittee has done, the care with which it reviewed the record, considered the submissions of all the Parties, the evidence, and the record we have.”

Ultimately, motion was made to end deliberations, which passed 5-2. A motion was then made to deny the Certificate. It passed 7-0.