Eversource has spent $190 million on Northern Pass through 2016
CONCORD — Eversource already has spent more than $190 million on the proposed Northern Pass project through last year, a company executive testified Monday.
The proposed $1.6 billion project would make a yearly 12.56 percent rate of return during its construction phase and earn double-digit returns while operating, Michael Ausere, vice president of energy planning and economics for Eversource, told the state’s Site Evaluation Committee, which will decide by September whether to approve the project.
Northern Pass spokesman Martin Murray later said the project would be making about an 8 percent annual profit during the construction phase because the company is borrowing half the money to finance the project.
The $190.5 million spent through the end of 2016 included $50 million to acquire land for the 192-mile project, which would bring power from Canada into New England starting in late 1919 or early 2020, Murray said during a break.
Federal regulators, he said, set the rates of return for transmission projects.
Hydro Quebec will pay to construct Northern Pass, including covering property tax payments to cities and towns. Hydro Quebec will pay back Eversource the $190 million already spent, which, Murray said, came from shareholders, not from customers.
Earlier, the attorney representing the public in proceedings regarding Northern Pass repeatedly asked if there were stronger financial guarantees about who pays for decommissioning costs for the proposed transmission line.
Thomas Pappas, counsel to the public, questioned an Eversource executive about different funding sources, such as a letter of credit or bond, to guarantee someone would pay for the project’s decommissioning, which involves dismantling the infrastructure.
Ausere said there is “a scenario” where Hydro Quebec “would not be responsible for the decommissioning cost.”
“That would be a scenario where Eversource would step in,” Ausere said.
Should the Northern Pass transmission line be out of service for five years, Hydro Quebec “could walk away” from paying for the decommissioning cost, Murray said during a break.
Murray said he was told “that scenario is quite unlikely.”
The estimated decommissioning costs are a “little less than $100 million,” Murray said.
An agreement between Northern Pass and Hydro Quebec calls for the parties to develop a decommissioning plan in year 35 of the project’s operation and to collect funds from Hydro Quebec in years 36 through 40, he said.
Jack Savage, a vocal project critic, said during the break: “Who’s to pay to take it down to make sure our landscape isn’t left with rusting scars?”