Avangrid Corp. has spent more than $350 million on the $1 billion New England Clean Energy Connect project so far, and a subsidiary is developing contingency plans for working around legal and permitting challenges to an important public lands lease, according to a recently filed document and information provided to investment analysts.

But a suspension of subsidiary NECEC LLC’s license by state environmental regulators and an estimated nine-month construction delay during a legal appeal would make it impossible to complete the project by its December 2023 target date, the company said. It also would disrupt plans to be in service by the August 2024 contract deadline with Massachusetts utilities, the company added, and a delay stretching out 12 months would cost NECEC an extra $67 million.

And if NECEC ultimately can’t secure its public lands lease or get approval for an alternate route, the company could cancel the project and carry out a decommissioning plan that would remove all poles and foundations and allow cleared areas to regrow.

Cancellation would put at risk $240 million in negotiated benefits for Maine residents, the company noted, ranging from low-income rate relief to fiber-optic broadband connections and electric vehicle charging stations. Additional benefits include lower electric prices, millions in property taxes and hundreds of jobs.

These updates and opinions are contained in an Oct. 4 status report from Thorn Dickinson, NECEC LLC’s president and chief executive, to the Maine Department of Environmental Protection. They are part of testimony pre-filed with the agency as it prepares to hold a public hearing Oct. 19 on whether it should suspend NECEC’s construction license.

NECEC owns or controls almost all the power line route, but a section less than one mile long crosses two parcels of state-owned public land.

In August, a Maine Superior Court judge ruled that the Maine Bureau of Public Lands didn’t follow proper procedures to assure the lease wouldn’t result in a substantial alteration to the public land. That led the DEP’s commissioner to determine that the lower court decision represented a change in circumstances that could warrant suspending NECEC’s environmental permit.

Both NECEC and the bureau have appealed the ruling to the Maine Supreme Judicial Court. Based on a briefing schedule set out last month, no decision is expected until around June 2022.

This undated photo from opponents of the New England Clean Energy Connect power corridor shows trees being cleared in western Maine. Photo courtesy of No CMP Corridor

The public hearing comes roughly three weeks before voters weigh in on Question 1, a ballot initiative aimed at killing the project outright.

To Tom Saviello, a former state senator and lead organizer of the Question 1 referendum, Dickinson’s testimony is designed to give the impression that, while the project faces challenges, it eventually will be built.

“They’re trying to send the message that it’s a done deal,” he said.

Saviello also expressed surprise that the company already had spent $350 million on a venture that could ultimately fail. That figure, contained in communications from investment analysts who cover Avangrid and provided by the company as guidance for projected earnings, represents money spent on expenses including labor, materials and permitting.

Because any outcome will be challenged in court, Saviello said he suspects Avangrid will invoke the legal doctrine known as vested rights, arguing that it should be able to proceed after securing all its needed permits. But Saviello said Avangrid should have known it was taking a gamble.

“In my mind,” he said, “they’ve gone out there at their own risk.”

KEY PROJECT UPDATES

Dickinson’s testimony includes some notable benchmarks about the status of the 145-mile transmission line, which would bring 1,200 megawatts of electricity from Hydro-Quebec in Canada into New England’s grid at Lewiston. Most of the route is along existing power line corridors used by Central Maine Power, an Avangrid subsidiary. But 53 miles are being cleared through commercial forest from The Forks to the Quebec border, a section prized for recreation, wildlife habitat and biodiversity.

Other key project updates in the testimony include:

• All transmission-related material such as conductors and insulators have been received and stored along the route. More than half of the steel poles have been delivered.

• Construction began on Jan. 18. As of Oct. 4, 108 miles of right of way were cleared and 58 poles installed. Most clearing is expected to wrap up by year’s end.

• Site work in Lewiston for the $250 million converter station that will change the line’s direct current voltage into alternating current is 80 percent done. Foundation work is expected to start shortly.

• Roughly 600 workers are directly on the job and 300 more are expected as construction ramps up. Another 100 or so workers will be needed early next year for pole-setting and conductor-stringing. Underground drilling to put the line under the Kennebec River is set to begin in late winter.

In his testimony, Dickinson also laid out two options that would avoid crossing a 0.9-mile stretch of West Forks Plantation and Johnson Mountain Township, which is subject to the contested 2020 lease. But both alternate routes, according to NECEC, would cause more environmental damage and require more tree-clearing. While the lease fight is tied up at the DEP and in court, Dickinson said, NECEC could work on other segments.

However, Dickinson warned that if the DEP suspends NECEC’s license while the Supreme Court appeal is underway, construction would be delayed beyond December 2023. That would set in motion a complex and costly “demobilization” process of removing miles of erosion-control timber mats and restoring cleared land. Then, if construction resumed, NECEC would need to rehire crews, obtain equipment and update permits and approvals.

This process would delay the company’s receipt of anticipated revenue and have a “significant adverse impact” on its substantial investment. That’s how the company estimated $67 million in added costs and why it’s asking the DEP to not suspend its license during the court appeal.

But if the project can’t ultimately secure a route and is canceled, NECEC says it will submit a decommissioning plan to the DEP.

“Through decommissioning, all transmission lines and pole structures would be dismantled and removed. Subsurface components, including pole and equipment foundations, would be removed,” Dickinson’s testimony states. “No project-related infrastructure would protrude or remain above grade to eliminate any NECEC-related physical hazards. Disturbed areas would be stabilized. Trees would be allowed to regenerate naturally and, similar to what occurs after a forestry operation, would be expected to be re-established as a young forest in between 10 and 20 years.”

FOES SEEK TO HALT PROJECT

Project opponents, however, will tell the DEP that any route alternatives will cause environmental damage and that NECEC shouldn’t be allowed to continue construction.

Jeff Reardon, who said he became highly familiar with the area while working as Maine brook trout project coordinator for Trout Unlimited, said in pre-filed testimony that any new route west of Route 201 would “require extensive permitting procedures and a new alternatives analysis of prospective routes and their impacts on fish, wildlife, aquatic and scenic resources in an area that is rich in these.”

Filing his testimony on behalf of the Natural Resources Council of Maine, Reardon said that because the outcome of the review is unpredictable, “no further construction of NECEC should take place until the alternative has been finally identified and approved in order to avoid unnecessary and highly detrimental impacts to the environment.”

Beyond environmental considerations, testimony at the DEP also will include opinions about how the court appeal will play out and its bearing on continued construction.

NECEC will argue that even if the Law Court affirms the Superior Court’s judgment, it would still pursue the public lands lease. It contends that the ruling only found that the Bureau of Public Lands failed to follow a specific procedure, but didn’t address the legal issue of whether the land would be substantially altered.

But Sen. Rick Bennett, R-Oxford, one of the plaintiffs in the Superior Court case, said that uncertainty is exactly why the DEP should suspend the project’s license.

“Since the outcome of the Black v. Cutko appeal will not be known for an extended period of time,” Bennett said,  “it makes no sense to allow CMP to continue construction on the gamble that the Superior Court’s decision will be reversed.”