Maine Court Rules Against Referendum That Blocked Avangrid’s $1 Billion Transmission Project

The Maine Supreme Judicial Court on Aug. 30 ruled that a ballot referendum in Maine that was voted in November 2021 to block the New England Clean Energy Connect transmission project is unconstitutional. The latest development provides renewed impetus to the $1 billion U.S. transmission line designed to transmit Canadian hydropower.

The court states that the retrospective nature of the referendum last year breached the project developer’s constitutional rights, posting it back to a lower court for additional proceedings. The project is the result of a winning bid submitted by Central Maine Power and Hydro-Quebec in response to a 2017 clean energy solicitation issued by Massachusetts electric distribution companies. The 145-mile power line, designed to deliver up to 1.2 gigawatts of Canadian hydropower into the Northeast, would cross western Maine to supply Massachusetts. In June 2019, Massachusetts regulators approved 20-year contracts between Hydro-Quebec and the state’s electric distribution companies to acquire Canadian hydropower to help the state achieve its clean energy goals. In May 2020, the Maine Department of Environmental Protection granted a permit allowing construction of the project.

Proponents of the project, which is funded by taxpayers in Massachusetts, are claiming that projects like this are essential in fighting climate change and would also help diversify the electricity generation mix. Supplying hydropower into regions which are heavily reliant on natural gas would smoothen out volatility in energy prices. Opponents claim that the environmental advantages are inflated, and that the line would negatively impact woodlands in western Maine.

Avangrid Inc., the commercial partner with Hydro-Quebec, contended that the voter referendum in November 2021 breached its entrusted rights – a constitutional safeguard against backdated cancellation of a project that has acquired all the required permits to start construction. The developer further alleged that the opposition campaign, including local environmental parties, was being financed and influenced by power industry competitors that own natural gas and nuclear facilities in the region.

The next step will require the developers to demonstrate that the permits and authorization have been obtained in accordance with existing laws and regulations. The court said that the referendum applied retroactively to the certificate approving the project infringes on the developer’s constitutionally-protected vested rights if it engaged in substantial construction of the project in good-faith reliance on the authority granted by the certificate of public convenience and necessity before Maine voters approved the referendum. Even if the developers’ vested right to proceed with the project would not be absolute, the court said that the right to move forward under the terms of the validly issued certificate under then-existing law would be protected. The company spent nearly $450 million on the project, about 43 percent of the projected total cost as of Nov. 3, 2021.