Hydro-Québec’s Maine Power Challenge: Who Exactly Is Being Bullied?

iPolitics

Hydro-Québec is used to getting its way.

The Crown-owned utility is massive. It posted a profit of $2.3-billion last year, in the midst of the pandemic, and handed over a dividend of $1.7-billion to its owner, the Quebec government.  

The utility has been dubbed a state within a state, a beacon to Quebec nationalists of the success of the province’s modernization, from the nationalization of private-sector power producers under the leadership of René Lévesque in the 1960s to construction of the James Bay hydroelectric complex in the 1970s and 1980s.

A better example of this emotional link is the 1966 ballad “La Manic” by Quebec singer-songwriter Georges Dor, a love song from a homesick worker at the Manicouagan hydro dam to his girlfriend back home in southern Quebec.

When Hydro-Québec wants a power line built in Quebec, it gets done. Locals can complain but it’s tough fighting a mythological symbol of national identity. And Newfoundland has found that battling Hydro-Québec over its lousy deal on Churchill Falls can end in tears.

So imagine the frustration of Sophie Brochu, the new CEO of Hydro-Québec, over the utility’s delayed efforts to get a power line pushed through the small state of Maine, the key part of a $10-billion deal to supply 1,090 megawatts of power to neighbouring Massachusetts over 20 years.

Hydro-Québec has got the necessary permits as well as political support from the governor and the state Chamber of Commerce, yet opposition to the power line remains ferocious. A strange alliance of environmentalists, angry consumers and rival power suppliers have repeatedly managed to delay Hydro-Québec’s ambitions and have gathered enough signatures to likely force a referendum on the project in next November’s elections.

Legislation proposed in the Maine legislature would also ban foreign-owned companies like Hydro-Québec from meddling in state politics through its massive spending on advertising and lobbying efforts. Of course, no foreign company could ever get away with this kind of activity in Quebec, where corporate spending on referendum campaigns is banned outright.

All of this pushback led this week to an extraordinary outburst by Brochu, who alleged that Hydro-Québec is being “bullied” by its opponents, including of all people, the Canada Pension Plan Investment Board, (more on this later). Clearly, Brochu is worried that the deal will end up crashing and Hydro-Québec will be stuck with its huge power surplus.

On the face of it, the deal sounds pretty straightforward. Hydro-Québec has lots of hydro power available and New England could use it to reduce dependence on thermal-generated power. A win for the climate and a win for Hydro-Québec.

But it turns out to be a much more complicated sell in independent-minded Maine. To get the power line built, Hydro-Québec teamed up with Central Maine Power (CMP) the state’s largest electric supplier. But CMP has a terrible reputation for reliability. A recent survey of business customers by J.D. Power put Central Maine Power in last place among 88 U.S. utilities. It was favoured just as badly in an earlier survey of residential customers. As one observer of the Maine political scene told me, a lot of Mainers “hate” CMP.

And like Hydro-Québec, Central Maine Power is foreign owned, by a Spanish conglomerate.

Maine environmentalists don’t buy Hydro-Quebec’s claims of being an ecological supplier of clean power. The Natural Resources Council of Maine points out that the power line would slash through 85 kilometres of pristine forest in the remote northern part of the state.

The Council claims the deal would crowd out renewable energy projects in the state, like wind and solar, and would take energy that Hydro-Québec now sells to places like New York State and send it to Massachusetts instead, forcing those places to potentially turn to sources like gas and coal. Hydro-Québec rejects those allegations.

Opponents of the line also argue that virtually none of the benefits, aside from some temporary construction jobs, will go to Maine. And native leaders from Quebec have pointed in newspaper op-eds to their fraught history of dealings with the utility and of the massive swathes of the province that have been flooded by Hydro-Québec dams.

How has Hydro-Québec responded to this persistent opposition? By spending gobs of money on lobbying efforts, including full-page newspaper ads, paid social-media posts and a letter-writing campaign. It even hired a Washington lobbyist that works with Saudi Arabia to push its case.

It’s estimated that the Quebec utility and Central Maine Power have together spent well over US$20-million promoting the project in a state of just 1.4 million people, dwarfing the totals expended by their opposition by several times.

That opposition includes Calpine, a Texas-based company that owns a gas-fired power plant in Maine and fears losing business if the Hydro-Québec deal goes through. It turns out the CPP Investment Board has a minority stake in Calpine, and a seat on its board.

Brochu thinks it’s unacceptable that a CPP investment is “unduly hurting a Canadian company” and that Calpine is “putting money in the toilet” by trying to fight Hydro-Québec’s Maine project, because she insists the “game is over”.

It’s unclear what exactly she expects CPP Investments to do. For one thing, the board operates at arm’s length from the federal government and unlike Quebec’s Caisse de Dépôt, doesn’t see itself as a tool of Ottawa’s political and economic goals. Its role is as a pension plan trying to get good returns for millions of Canadian retirees.

The Hydro-Québec boss seems to be saying that CPP Investments should review all of its investments in the fossil fuel industry, which is a valid discussion. But it’s pretty rich coming from Brochu, whose last job was as CEO of Energir, Quebec’s dominant natural-gas supplier, which in turn is 28 per cent owned by Enbridge. She hardly has a reputation as a tree-hugger.

It’s still unclear how the Maine saga will end. There have been no independent polls on how Mainers think of the project although one sponsored by Hydro-Québec in January showed that 42 per cent of those surveyed supported the project and 35 per cent were opposed, with 23 per cent unsure. Considering who did the survey, it’s hardly a ringing public endorsement.

And if the referendum blocking the project gets passed, you can be darn sure that Hydro-Québec will be spending millions more to get its way by continuing to fight in the courts. Which makes me wonder. Who exactly is the bully here?

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  • Sandra Howard
    published this page in News 2021-05-20 19:56:24 -0400