Avangrid and NECEC Take Action to Protect Historic Clean Energy Project

Rhea-AI Summary

NECEC Transmission LLC and Avangrid Networks, Inc., subsidiaries of Avangrid (NYSE: AGR), have filed a lawsuit in Maine Superior Court against the citizens’ initiative Question 1, which seeks to block the New England Clean Energy Connect (NECEC) transmission project. The lawsuit claims that the initiative is unconstitutional and violates several legal principles, including vested rights and the separation of powers. Construction of the $950 million NECEC project is underway, aiming to deliver 1,200 megawatts of hydropower from Quebec to New England, and provide significant economic benefits and renewable energy.

Positive

• NECEC project has received all regulatory approvals and construction is ongoing.
• The project represents a $950 million investment, expected to create over 1,600 jobs during construction.
• Once completed, NECEC will significantly lower energy costs in New England and reduce fossil fuel usage by cutting three million metric tons of emissions annually.

Negative

• Question 1 represents a legal challenge that could impede the project's progress.
• The initiative was funded by fossil fuel interests, indicating significant opposition to the NECEC project.

Company files suit challenging constitutionality of Question 1

ORANGE, Conn.--(BUSINESS WIRE)-- Today, NECEC Transmission LLC and Avangrid Networks, Inc., subsidiaries of AVANGRID, Inc. [NYSE: AGR] filed a lawsuit in Maine Superior Court challenging the citizens’ initiative (Question 1) voted on yesterday.

“We thank our supporters and the 160,000 Mainers who voted in support of the NECEC project,” said Thorn Dickinson, President and CEO of NECEC Transmission LLC. “And to those who voted yes on Question 1, we will work to earn your support and demonstrate the tremendous benefits this project will bring to the state and the region.”

Question 1 proposes to retroactively change Maine law to block the New England Clean Energy Connect (NECEC) transmission project, New England’s largest clean energy project that would bring hydropower from Quebec to the New England region. The initiative is unconstitutional and violates both state and federal law.

“We have followed the rules every step of the way in a transparent and public process and have received every regulatory approval required for this project to proceed, however, fossil fuel companies have done everything they can, including misleading Mainers, to try and block this clean energy project,” said Dickinson. “This referendum was an act of bad faith by self-interested proponents and was targeted at stopping a single project.”

The lawsuit filed today outlines how Question 1 violates a number of legal principles including vested property rights, separation of powers, and the contracts clauses of the Maine and U.S. Constitutions.

• Vested Rights - A legal principle embodied in Maine Law, vested rights, protects a property owner who has invested in a project after following the law in place at the time. Under the vested rights principle, if a property owner followed the rules in getting all necessary permits and starts construction of a project, the rules cannot be changed retroactively to block the project. NECEC began construction on the transmission project only after receiving full regulatory approvals. Going back now and retroactively changing the rules to stop the project is a clear violation of the company’s vested rights.
• Separation of Powers - Question 1 also violates the separation of powers principles enshrined in the Maine Constitution by attempting to reverse decisions of both Maine’s executive and judicial branches through a legislative action. This is the same principle the Maine Supreme Judicial Court invoked in 2020 when it threw out the first citizens’ initiative put forward by opponents of the project. A citizens’ initiative is considered an act of the legislative branch under the Maine Constitution.
• Contracts Clause - By attempting to cancel a 25-year lease between NECEC and the State of Maine, the initiative violates the Contracts Clauses of both the Maine and United States Constitutions – provisions intended to protect the sanctity of contracts from intrusion by the government.

“Question 1 violates fundamental legal principles, but you don’t have to be a lawyer to see that it’s also fundamentally unfair,” Dickinson said. “This referendum effectively tears up valid contracts, ignores the judicial and executive branches and goes back in time to retroactively change the rules to stop a project just because it threatens the financial interests of fossil fuel generators.”

Because Question 1 violates vested rights as well as these basic constitutional protections provided by the Maine and United States Constitutions, the initiative cannot lawfully be applied retroactively to the NECEC. In the lawsuit filed today, NECEC seeks a declaratory judgment from the Superior Court that the initiative is unlawful and cannot be enforced against the project.

NECEC also asks the Superior Court for an immediate injunction preventing retroactive enforcement of the initiative against the project, so that ongoing time-sensitive and essential construction is not disrupted while this lawsuit proceeds before the courts. NECEC expects the Superior Court to rule on the injunction request promptly.

Opponents of the NECEC project include fossil fuel energy generation owners NextEra, Calpine and Vistra Energy, which combined have contributed over $24 million to block the project over the last two years according to publicly filed documents, including fully funding the referendum signature campaign. Opponents of the NECEC have filed more than a dozen legal challenges but have been unsuccessful in their attempts to block construction, including a unanimous decision by the Maine Supreme Judicial Court upholding authorization for the project.

Construction began on the NECEC in early 2021 and to date, approximately 124 miles of the transmission corridor have been cleared and over 120 structures have been installed. The project has been reviewed by state and federal regulators and permitting agencies and has received every regulatory approval required at the state and federal levels, including from the Maine Public Utilities Commission (MPUC), the Maine Department of Environmental Protection (MDEP), the Maine Land Use Planning Commission (LUPC), the U.S. Army Corps of Engineers and the U.S. Department of Energy. In addition, the project has already received municipal approvals from 20 out of the 24 Maine municipalities that require permits for the project

Editor’s Note: The legal filing can be found here.

ABOUT THE NECEC PROJECT

The New England Clean Energy Connect (NECEC) is a $950 million investment that will deliver 1,200 megawatts of renewable hydropower to the New England energy grid in Lewiston, Maine. All the costs will be paid for by Massachusetts electric customers. Once built, the NECEC will be New England’s largest source of renewable energy, representing a fundamental shift away from fossil fuels, while simultaneously lowering energy costs in Maine and New England.

The 145-mile transmission line is being built on land owned or controlled by an affiliate company of the NECEC. The 53 miles of new corridor on working forest land uses a new clearing technique of tapered vegetation; the remaining two-thirds of the project follows existing power lines created for the state’s hydroelectric industry almost a century ago. Construction is scheduled to be completed by the Spring of 2023.

The project will create an average of more than 1,600 good-paying jobs annually during the two-and-a-half-year construction period, provide $200 million in upgrades to Maine’s energy grid, making Maine’s electricity service more reliable. The NECEC will allow more producers of renewable energy in Maine to get their energy on the grid, and because the corridor project will use clean hydropower, it will reduce the use of fossil fuels, cutting three million metric tons of dirty emissions each year.

The NECEC will also deliver significant economic benefits to Maine, including lower electricity prices, increased local real estate taxes, and reduced energy costs, as well as benefits like expanded fiber optic cable for broadband service in Somerset and Franklin counties, and economic development funding for Western Maine.

For more information about the New England Clean Energy Connect, please visit our website at www.necleanenergyconnect.org.

About AVANGRID: AVANGRID, Inc. (NYSE: AGR) aspires to be the leading sustainable energy company in the United States. Headquartered in Orange, CT with approximately $39 billion in assets and operations in 24 U.S. states, AVANGRID has two primary lines of business: Avangrid Networks and Avangrid Renewables. Avangrid Networks owns and operates eight electric and natural gas utilities, serving more than 3.3 million customers in New York and New England. Avangrid Renewables owns and operates a portfolio of renewable energy generation facilities across the United States. AVANGRID employs approximately 7,000 people and has been recognized by Forbes and Just Capital as one of the 2021 JUST 100 companies – a list of America’s best corporate citizens – and was ranked number one within the utility sector for its commitment to the environment and the communities it serves. The company supports the U.N.’s Sustainable Development Goals and was named among the World’s Most Ethical Companies in 2021 for the third consecutive year by the Ethisphere Institute. For more information, visit www.avangrid.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211103006163/en/

MEDIA CONTACT:

Zsoka McDonald

Zsoka.mcdonald@avangrid.com

203-997-6892

INVESTOR CONTACT

Patricia Cosgel

Patricia.cosgel@avangrid.com

203-499-2624

Source: AVANGRID

FAQ

What is the NECEC transmission project by Avangrid (NYSE: AGR)?

The New England Clean Energy Connect (NECEC) is a $950 million project designed to deliver 1,200 megawatts of renewable hydropower from Quebec to New England, aiming to reduce fossil fuel dependence and lower energy costs.

What are the legal challenges faced by Avangrid regarding the NECEC project?

Avangrid has filed a lawsuit challenging Question 1, a citizens' initiative that seeks to retroactively stop the NECEC project, claiming the initiative is unconstitutional and violates legal principles.

How does Question 1 affect Avangrid's NECEC project?

Question 1, if enforced, could legally obstruct the NECEC project by retroactively changing Maine law to block its progress, despite the project having received necessary approvals.

What are the economic benefits of the NECEC project for Maine?

The NECEC project is expected to create over 1,600 jobs, deliver lower electricity prices, and provide $200 million in upgrades to Maine's energy grid, enhancing reliability.

What is the expected completion date for the NECEC project?

The NECEC project is scheduled for completion by Spring 2023.