Energizing Progress: Legal Reforms for Transmission Siting Inspired by Maine’s NECEC Project

Current Federal Framework

   A robust power grid is foundational to the nation’s energy security. How we define robustness is evolving as the grid shifts towards renewable energy sources. To streamline this evolution, the Energy Policy Act of 2005 authorized the Secretary of Energy to establish national interest corridors to alleviate electricity transmission congestion. [6] According to the Federal Energy Regulatory Commission (FERC), the provision allows the Commission to expedite siting processes and permitting in select corridors.

 
   However, legal ambiguity muddles these efforts. [7] In 2009, after FERC granted such permits for projects in the Southwest, a coalition of petitioners led by the New York State Public Service Commission appealed to the U.S. Fourth Circuit Court of Appeals in Richmond, Va., and the court agreed: FERC cannot assert its power to override transmission siting denials made by states. However, the court’s dissent opined, “that FERC’s authority may be limited does not even suggest that Congress would not have authority to grant applications in some situations in which states had denied them.” [8] In 2010 the respondents appealed the case; however, the Supreme Court let the decision stand without comment. [9] The legal limits on the federal government’s scope of influence even in ‘national interest corridors’ have impacted developer confidence in pursuing these crucial infrastructure projects for fear of unfettered legal fees and other hold-ups.

   The grid is arguably the largest machine in the world; however, it is intensely local. The scale of the nation’s grid is in focus as we transition to renewables because of the seasonal, daily, and hourly mismatches between where power is generated and where it is needed. Moving electricity thousands of miles can happen nearly instantly across high voltage direct current wires. It is possible to optimize how energy is generated and distributed, even across the country’s diverse topography. However, to get there, at least 275,000 miles of new transmission lines need to be built. [10]

   Building hundreds of thousands of miles of new transmission and updating nearly all the existing infrastructure requires coordinated resource allocation and legal pathways to siting and permitting. It is critical to study cases like those in Maine to identify new legal pathways and reforms that govern how we build and manage our grid. We need to be able to permit a clean energy transition that is not mutually exclusive with protecting natural ecosystems or respecting local preferences to secure our energy future.

Case Study: The New England Clean Energy Connect (NECEC)

   Compared to the rest of the country, New England is disproportionately dependent on burning fossil fuels to power its electric grid. [11] To rapidly decarbonize its grid, in 2016 the Massachusetts legislature passed an act that requires utilities to dramatically increase the amount of electricity sourced from hydropower by 1.2 Gigawatts (GW) and from wind power by 1.6 GW. [12] Geographically, Massachusetts’s long and curving coastline is well suited for wind power production. [13] However, offshore wind quickly became a political pariah. Local opposition swiftly rejected projects and strung up legal arguments against turbine installation. [14]

   In 2018, Massachusetts refocused on its hydropower ambitions instead. The State put forth a request for proposals (RFP) to procure the mandated 1.2 GW. From the start, the RFP process was riddled with controversy. Firstly, RFP responses were reviewed by a panel that included the State’s three distribution utilities: National Grid, Unitil, and Eversource Energy. Suspiciously, the winning proposal was a joint bid between Hydro-Quebec and Eversource Energy, one of the panelists. The fact that a profit-maximizing corporation had a hand in selecting itself for a lucrative project is not necessarily to say the committee selected the wrong proposal amongst the dozens submitted. It is to say, however, that the bid was incomplete and arguably should have been disqualified. The project hinged on an outstanding permit to bury the transmission wires under the White Mountains in New Hampshire that was ultimately denied.

   Embarrassed by misplaced confidence, Massachusetts shifted to an alternative plan to deliver clean energy from Hydro-Quebec in partnership with Central Maine Power Maine (CMP). Wary of looming legal challenges, the project undertook an 18-month comprehensive analysis, and in 2019, CMP’s New England Clean Energy Connect (NECEC) won the Maine Public Utilities Commission’s project approval. This endorsement granted a Certificate of Public Convenience and Necessity (CPCN), which allowed the construction of an electric transmission line from the Maine/Quebec border to Lewiston, Maine. In Lewiston, the deal included a $300 million investment in a new substation that would generate local jobs and would secure Mainers preferential energy rates from clean sources. [15]

   While the deal claimed to “address the twin challenges of climate change and energy affordability,” Mainers did not accept the notion that the energy from Hydro-Quebec was “clean.” [16] Locals claimed the energy would, in fact, be riddled with closed-door corruption, foreign beneficiaries, exploited tribal lands, and significant forest loss to such a degree that it undermined any potential upside. [17]

   CMP was already in hot water with its Maine customers that year for botching the rollout of a new payment system and sending unexpectedly inflated invoices. [18] Furthermore, CMP is a subsidiary of Avangrid, the U.S. subsidiary of Iberdrola, a Spanish utility company. So not only was CMP a distrusted foreign utility company, it was set to partner with another foreign utility in Canada. Hydro-Quebec’s reputation was not much better back home than it was in Maine– When they constructed the dams in the mid-1990s, thousands of acres of tribal land were flood flooding displaced wildlife, hunting game, farmland, and local development opportunities. At least five First Nations in Quebec and two Indigenous tribes in New England opposed NECEC, arguing the project is inequitable and unjust. [19]

   Furthermore, the project’s ecological impact was also a non-starter for many locals. For explanatory purposes, the 147-mile transmission line is effectively divided between new and upgraded corridor segments. The approved plan called for 53 miles of a new transmission corridor from the Canadian border to the Forks Plantation area. By using a high-voltage direct-current (HVDC) line, the proposed corridor would measure about 170 feet wide compared to typical 400-foot wide corridors. The remaining 94 miles of the proposed corridor would widen existing “rights-of-way”. In the following months, NECEC started construction spending $450 million to cut 124 miles of line corridor and erected over 100 transmission poles. [20] While the project was seemingly full steam ahead, tumultuous parallel narratives were unfolding between the courts, the public, and the transmission developers.

Legal Challenges and Citizens’ Opposition

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   Maine residents were determined to find a way to have a say in the NECEC project from day one. From filing over 1,000 public comments to persistently appealing state and local court rulings to suspend project permits, Mainers steadfastly charged up the growing ‘Stop the Corridor’ campaign. While legal challenges and appeals played out in the courts, the public comments evolved into the state’s most expensive ballot initiative campaign in history. 

   The public referendum aimed to set a retroactive precedent that would not only stymie NECEC’s development but any other projects that intended to leverage legacy leases and land use permits without a 2/3 majority vote in the legislature. On November 2, 2021, 59% of Mainers voted in favor of the referendum and formally challenged NECEC’s constitutionality. To avoiding the need for legislative approval, the NECEC immediately filed to block this retroactive application of the Initiative. [21]

   The Superior Court denied NECEC’s complaint and kept the Initiative alive, nothing that the complaint was resolved by existing law  and that, because of the separation of powers, the Court had no say in legislative affairs. However, the Superior Court Justices offered a historical review of vested rights through the lens of the Maine and U.S. Constitutions and ultimately contended with NECEC that “vested rights are properly viewed as arising from the Maine Constitution’s due process law.” This meant that the Initiative would retroactively interfere with NECEC’s “constitutionally-protected vested rights,” and that the NECEC had secured a pathway forward. [22]

   This report was not the end of the road for NECEC. The project’s opposition argues that when NECEC continued construction throughout the legal battles, it tried to generate a vested rights claim artificially. Superior Court Justice Michael A. Duddy ordered a jury trial and put the fate of the trials in the hands of nine ordinary citizens - a strategic nod to the people’s desire to secure their voice in Maine’s energy future. In March 2023, the jury unanimously issued a verdict in favor of the project, finding that the construction was undertaken in reliance on the PUC permit and “according to a schedule that was not created or expedited for the purpose of generating a vested rights claim.” In other words, they ruled that the public referendum was unconstitutional. After that, Maine DEP and other regulators lifted their suspensions, and the line was back on track to complete construction and deliver clean energy to the region. For now, the jury sealed the fate of the project, and the ‘Stop the Corridor’ campaign officially closed its books. [23]

Recommendations for Reform 

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   The siting and permitting of transmission lines is the Achilles heel of our energy future. [24] We need to decarbonize our economies in the next quarter century, but the protracted and resource-intensive process for siting and permitting transmission lines remains a significant obstacle. We cannot wait for  a breakthrough technology to emerge and hyper-accelerate our phasing out of fossil fuels to generate electricity. To surmount this challenge, it is imperative that we establish a national streamlined regulatory framework that fosters efficiency, consistency, and collaboration across jurisdictions.

   U.S. Senator Joe Manchin (D-WV) tried to address this issue by introducing the Building American Energy Security Act of 2023 earlier this year. [25] Emphasizing the need for swift action, Manchin noted, “In the United States, it often takes between five and ten years — sometimes longer — to get critical energy infrastructure projects approved, putting us years behind allies like Canada, Australia, and more recently the E.U., who each have policies designed to complete permitting in three years or less.” [26] Among its primary functions, the bill sets maximum timelines for permitting reviews, establishes a statute of limitations on court cases, and creates a national energy infrastructure priority list.

   Regrettably, the bill overlooks a crucial dimension: environmental protection in project prioritization. Though local opposition campaigns often halt projects for reasons unrelated to environmental concerns, environmental protection still lies at the heart of many critical legal battles. The bill must incorporate these considerations into its evaluation matrix to establish a siting and permitting framework capable of assuaging local opposition. The legal battle in Maine exemplifies this, as even though NECEC would have qualified as a national energy infrastructure priority project under the bill’s current language, it faced six years of intense opposition that nearly prevented it from happening at all.

   The legal climate around vested rights continues to complicate matters. Using the NECEC precedent, legacy energy operators may invoke vested rights to propagate infrastructure incongruent with the technological demands of the clean energy transition. This underscores the critical need to get legislative efforts like the Building American Energy Security Act right. It also underscores the importance of more constructive public lobbying. It is shortsighted to dismiss every opposition campaign as mere self-interested NIMBYism. Advocacy initiatives like ‘Stop the Corridor’ can encourage developers to create more equitable and sustainable projects. However, the current judicial process tends to reward battles based on technicalities for quick political wins, rather than providing a platform for judiciously considered reforms aimed at mutually beneficial solutions.

   We must empower the public to participate through a ranked-choice voting system, allowing them to prioritize the dimensions shaping a critical energy infrastructure project. Siting decisions will render trade-offs, so putting forth either or siting processes will fail to keep up with the demands of the energy transition. Reforms can allow for dimensionality in siting decisions so that local concerns and national interests can progress concurrently. For instance, if Mainers had the opportunity to rank their concerns and priorities, the Public Utility Commission could have brokered a more favorable agreement from the outset. This approach would provide the FERC with more actionable directives derived directly from the public’s preferences and concerns to shape a project’s direction. By moving past zero-sum strategies, public campaigns could more effectively broker and demand accountability for community benefits agreements and other win-win scenarios. 

   By directing public input toward shaping future decisions rather than relying on them ex post facto, we can create a more effective framework for achieving a clean energy future. This approach ensures that the public’s priorities remain integrated into energy projects, even as they change over time, fostering a sustainable and responsive energy infrastructure. Federally streamlined regulatory frameworks that enforce  democratic established best practices for energy infrastructure siting and permitting could have been an influential arbiter in Maine and potentially across the country. Considering the need to build 275,000 more miles of transmission lines in the coming decade, the opportunity to reform this process has never been more promising.

   We stand at a critical inflection point in building the future we want to live in. Two things can be concurrently true: The public has a vested right to clean, affordable energy security, and it is in our best interest to leverage existing assets to propel us toward a clean energy future that enhances our capacity for innovation, not just for 2050 but for centuries to come.