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Hydro-Québec TransÉnergie Application to Construct an Interconnection Power Line Appalaches-Maine Interconnection Power Line Project, CER Letter Decision A7T7Y8

Link to Decision Summarized

Facilities – Electricity


In this decision, the CER issued electricity Permit EP-305 (the “Permit”) to Hydro-Québec TransÉnergie (“HQT”). The Permit allows HQT to construct and operate a 103 kilometer (“km”) long +/- 320 kilovolt (“kV”) direct current (“DC”) power line between Appalaches substation in the municipality of Saint-Adrien-d’Irlande and a crossing point on the Canada-United States border in the municipality of Frontenac (the “Project”).

Project Overview and CER Process

The Project involves the construction of approximately 100.8 km of +/- 320 kV DC power line between the Appalaches substation in the municipality of Saint-Adrien-d’Irlande, Québec, and the New England Clean Energy Connect (“NECEC”) transmission line in the State of Maine. The Project will leave Canada at a border crossing point in the municipality of Frontenac, Québec. The proposed international power line (“IPL”) will enable HQT to provide New England with up to 1,200 megawatts (“MW”) of power at +/- 320 kV DC. The overall cost of the project is estimated at $603 million.

Comments Related to Upstream Facilities

The Pessamit Innu First Nation, Wemotaci Atikamekw First Nation, and the Pikogan, Lake Simon, and Kitcisakik Anishnabeg First Nation (the “Coalition of First Nations”) and the Innu Nation of Labrador (“Innu Nation”) submitted letters of comment. They raised issues regarding a lack of consultation related to the operation and maintenance of upstream facilities, particularly the Churchill Falls Hydroelectric Complex (“CFHC”). The Coalition of First Nations and the Innu Nation argued that the Crown’s duty to consult was not upheld and that they had been deprived of constitutional rights.

Views of the CER

The CER noted and considered arguments and concerns raised by both the Coalition of First Nations and the Innu Nation. The CER found that, while they each raised different arguments, they both related to the upstream generating facilities. This application under consideration concerned the construction and operation of a transmission line, which will use existing facilities operating within approved parameters. The CER, in reviewing the application, was not faced with the issue of new generating facilities.

The CER considered whether the effects of the upstream generating facilities should be included in the assessment as being incidental to the Project. The CER considered criteria provided by the Impact Assessment Agency to assist in deciding whether it should include the incidental activities in the scope of its assessment. The CER determined that the issues related to upstream facilities raised by the Coalition of First Nations and the Innu Nation were not properly within the scope of this proceeding.

The Innu Nation, referring to the UN Declaration, argued that the Project could not be found to be in the public interest if past and ongoing impacts of the CFHC remained unaddressed. Until such issues had been addressed, the Innu Nation argued that a new way to derive profits from the CFHC should not be allowed. The CER was of the view that an increase in profits, which would come from electricity generated on the entirety of the Hydro-Québec system, is not an adverse effect on the rights of the Innu Nation. The CER found that the applied-for permit does not cause a breach of the Innu Nation’s protected rights.

The CER further denied the request from the Innu Nation to impose a condition that would require HQT to obtain permission from the Innu Nation to use Innu Territory for the CFHC. The CER denied the requested condition for the Project because the CFHC is not directly related to the Project. The CER repeated that the CFHC is an upstream facility that is regulated provincially, which has no new impacts directly related to the Project.

Facilities Safety and Emergency Management Matters

Based on the information provided by HQT in its application and responses to information requests, the CER was satisfied by the overall design and determined that the Project, as proposed, would meet the applicable engineering requirements. Further, the CER was satisfied that the Project would comply with all applicable safety standards and reliability standards, and no issues were raised. The CER imposed conditions to ensure that commitments to abide by these standards were followed in the construction and operation.

HQT stated that the import limit capabilities of the IPL had not yet been confirmed. The CER imposed Condition 16 requiring HQT to confirm transfer capabilities limits.

The CER found that HQT’s commitment to adhere to applicable safety standards, combined with emergency prevention, preparedness, and response practices described in the application, corresponds to the CER’s Emergency Management expectations.

Economic Feasibility

Need for Facilities

HQT stated that the project serves to increase its capacity to export electricity to the major markets in Massachusetts and Maine. The Project will increase profitable exports for HQT, which, as a government corporation, pays a large dividend to the Province of Québec.

In March 2018, the NECEC project proposal submitted by Exploitation et Hydro-Québec Production (“EHQP”) in partnership with Central Maine Power was selected by the Massachusetts electricity distributors.

HQT stated that the existing interconnection points with New England do not have the capacity to receive an additional transmission reservation of 1200 megawatts. HQT stated that the power purchase and transmission agreements with the Massachusetts distributors and Central Maine Power, which stipulate annual delivery of 9.45 TWh of energy for 20 years, show an adequate market for the power line proposed in this request.

Despite concerns raised by participants regarding an adequate financial or business plan of HQT, the CER was satisfied with the information presented by HQT, demonstrating that the Project is responding to market need and that the Project would increase the export capacity of Québec.

Ability to Finance Construction and Operation

The CER determined that HQT had demonstrated that it had sufficient financial resources in place to finance the construction and operation of the Project. HQT estimated the service life of the proposed IPL at around 80 years. The CER was also satisfied that HQT was in a financial position to finance the future abandonment of the project.

Land Matters

The CER was satisfied that the significant effort made by HQT, including the route selection criteria and the modified route, took stakeholder concerns into account and minimized potential environmental and social impacts. The CER found that the route selection criteria used was appropriate as it follows existing infrastructure as much as possible, such that over 73% of the route follows the existing right-of-way (“ROW”) and therefore reduces environmental and social impacts. The CER further noted that over 99% of the Project is located on private land. As detailed route and land acquisition with respect to the Project will be carried out under provincial laws, the CER acknowledged that the Province of Québec would consider these matters.

Environment and Socio-Economic Matters

Comments from interested parties made submissions to the CER regarding environmental and socio-economic matters raised issues concerning impacts on wildlife and wildlife habitats, watercourses, wetlands, vegetation, climate change, health, traditional land use (“TLU”), and heritage resources.

The CER noted the responsibility of the Government of Québec to oversee the Project as part of the province’s issuance of the certificate under provincial jurisdiction. The Bureau d’audiences publiques sur l’environnement (“BAPE”) provided recommendations to the province to impose conditions on its approval of the Project to protect the biophysical and human environment. These recommendations included mitigation and/or compensation measures related to issues that were raised through the CER public comment period. The CER was satisfied that HQT identified and addressed environmental and socio-economic effects associated with the Project, including those raised through the public comment process.

The CER imposed Condition 9 requiring HQT to submit an Environmental Protection Plan (“EPP”) prior to beginning construction. As part of the EPP, to ensure HQT’s acts according to its commitment to inform impacted peoples in the event of a heritage resource discovery, the CER required a Heritage Resource Discovery Contingency Plan. The CER also imposed conditions requiring that HQT file a Finalized Watercourse Crossing Inventory and post-construction monitoring reports.

Given the nature and scope of the Project as applied for, the mitigation measures proposed by HQT, the fact that 99% of the ROW is on private lands, and that the IPL will parallel disturbances for 73% of the route, as well as recommendations in the BAPE Report and the CER’s mitigating conditions, the CER found that the Project is not likely to cause significant environmental or socio-economic effects.

Matters Related to Indigenous Peoples

HQT stated that the Project is subject to a provincial environmental impact assessment and review procedure by the Ministry of Sustainable Development, Environment, and Fight Against Climate Change (“MELCC”), which is also responsible for the process of Indigenous consultation by the Provincial Crown. At the time of submitting its Application in September 2020, the process of Indigenous consultation by the Provincial Crown was ongoing.

HQT focused the bulk of its engagement efforts with the Grand Conseil de la Nation Waban-Aki (“GCNWA”) in developing its applied-for route. HQT stated that the applied-for line route would not affect the area designated for hunting, trapping, and communal fishing activities.

The CER notified Indigenous communities potentially affected by the Project and encouraged the communities to contact HQT with their concerns and to participate in the BAPE review proceeding.

The GCNWA raised concerns regarding the Project’s impact on cultural and heritage resources; and cumulative impacts on their Ndakina traditional territory, affecting their preservation and continuation of the Waban-Aki culture. The Huron-Wendat Nation (“HWN”) submitted that they had received no real consultation from HQT and requested that before issuing a permit to HQT, the CER provide the nation with adequate funding so they may determine the potential effects on their ancestral rights and treaty issues; consult the nation on these effects and prescribe accommodations; and prepare a plan, in collaboration with the nation, for mitigating impacts.

The CER found that there had been adequate consultation and accommodation for the purpose of the CER’s decision on the Project. The CER also found that any potential project-related impacts on the interests, including rights, of affected Indigenous peoples are not likely to have an adverse effect and can be effectively addressed. As a result, the CER found that the issuance of a permit under section 248 of the CER Act is consistent with section 35 of the Constitution Act and the honour of the Crown.

Conclusion

The CER issued Permit EP-305, giving effect to this decision.

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