Last week, five New England States (all but New Hampshire) announced a collaborative effort to explore opportunities for expanding imports of power from large hydro facilities into New England.  The states tabbed the New England States Committee on Electricity (NESCOE) , which is already working on a regional procurement of renewable energy, to evaluate “opportunities, options and issues relating to the expansion of large hydro into New England” – no small task.  The idea appears to be that NESCOE will present its findings to the states, which may then incorporate them into strategic plans to be presented to the New England Governors later this year. We could see a regional procurement for hydro emerge from this process along the lines of the joint renewable energy procurement that NESCOE is already working on.

A coordinated regional approach could be a helpful way to move forward on what has been a looming question in the region for some time: what role should Canadian hydro have in New England’s energy future?  It is not a simple question.  There are potential benefits to bringing more hydropower to New England, such as enhanced fuel diversity in a region becoming increasingly reliant on natural gas, and reduced greenhouse gas emissions, which can contribute to state policy goals (such as compliance with the Global Warming Solutions Act in Massachusetts).  But there are also potential costs to investing in major transmission projects.  The Northern Pass project, the most prominent current proposal to construct transmission lines to bring Canadian hydropower into New England, has been controversial.  (The regional process started last week should be careful not to give the appearance that it is a device for promoting that, or any other, particular project – New Hampshire’s decision not to participate suggests that experience with the Northern Pass project may affect how the current proposal is viewed.)

One important question raised by efforts to bring more large hydropower into New England is the extent to which large hydro imports will compete with the development of other renewable generation such as wind and solar.  There need not be such competition, and the announcement last week does not propose the use of incentives for large hydro that might otherwise go to other renewable technologies; the announcement opens an investigation of policy options rather than proposing any particular policy mechanism.  But this is a sensitive issue: recent developments, particularly in Connecticut (where the role of large hydro in Connecticut’s RPS program was fiercely debated in relation to the recently enacted Senate Bill 1138, An Act Concerning Connecticut’s Clean energy Goals), have raised questions about whether the pressure of meeting RPS goals in the region may lead states to expand the eligibility of large hydro for RPS compliance – a move that could displace investments in other renewable technologies.  In the announcement for this regional effort, Massachusetts officials, clearly cognizant of this issue, emphasized that Massachusetts did not intend for large hydro to eat into the incentives available to other renewables and specifically noted that large hydro could not be used to comply with RPS requirements in Massachusetts.  How New England ultimately decides to incorporate large hydro into the regional energy supply will have far-reaching consequences, including, potentially, for the growing renewable energy sector.  It will be interesting to see what NESCOE comes up with.