Massachusetts utilities sue Hydro-Québec
Three Massachusetts utilities are suing Hydro-Québec for $40 million after it halted hydropower exports during a January cold snap.
Three Massachusetts utilities are suing Canadian energy giant Hydro-Québec for $40 million. The lawsuit stems from a 12-day period in January and February when the company failed to deliver promised hydropower during a severe cold snap.
Hydro-Québec has filed a countersuit against the utilities. It seeks $50 million for power delivered in January and February that the utilities have withheld payment on.
The dispute over winter exports
The conflict centers on the New England Clean Energy Connect (NECEC) transmission line, which began operation on January 16. During 12 days in January and February, temperatures plunged well below zero Fahrenheit in Québec. Electricity demand surged in the province, leading its grid operator to largely stop exporting power south on the new line.
The utilities-Eversource Energy, National Grid, and Unitil-contracted to buy the imported power. They claim Hydro-Québec should have been prepared for the situation, calling a cold Canadian winter "entirely foreseeable." When the hydropower ceased, the utilities had to fill the gap with dirtier, more expensive power. They also had to buy renewable energy credits to meet state clean energy requirements.
Hydro-Québec argues the contract allows it to make up its obligations later. It contends the decision to stop exports was made by the provincial grid operator, not the company itself, due to unprecedented demand. The utility says it would owe compensation only if it had made a voluntary choice to halt power flows.
NECEC's performance and impact
The legal fight highlights questions about how much new clean energy the NECEC line will reliably contribute. The transmission project took years to build and faced opposition over its impact on Maine's forests. State leaders and climate advocates have hailed it as a renewable energy triumph.
The Massachusetts utilities have signed contracts to buy 9.55 terawatt-hours of hydropower per year from the line. That is enough to meet roughly 20% of the state's annual electricity demand. By the end of July, 4.43 terawatt-hours had been delivered, slightly less than half the annual obligation.
| Metric | Figure |
|---|---|
| Annual contracted hydropower | 9.55 terawatt-hours |
| Power delivered by end of July | 4.43 terawatt-hours |
| Share of Massachusetts annual demand met | ~20% |
The line has experienced several outages in its first eight months of operation. It went offline for two weeks in the spring and for another week at the end of August. Meanwhile, Canada has been importing power from New England on a separate line at higher levels than in previous years. This means New England has sometimes burned gas and oil to generate power sent north, even as it receives emissions-free electricity from Québec.
Broader context for New England's grid
Environmental advocates remain confident in the project's value. "NECEC is making a material difference to the grid here in ISO New England," said Joseph LaRusso, manager of the Clean Grid Program at the climate nonprofit Acadia Center. "And I don't see these contract disputes altering that."
Caitlin Peale Sloan, vice president for climate and energy at the Conservation Law Foundation, noted that volatile fossil fuel prices pose a much bigger problem than delivery hiccups with Canadian hydropower. She suggested the lawsuits could strengthen future cross-border contracts. New England is considering buying offshore wind power from Nova Scotia in the next decade.
"There's lots coming out of this lawsuit that will help determine what protections should be enshrined in any future Canadian supply contracts," she said. The outcome hinges on interpreting the remedies due under the existing power purchase agreements, according to LaRusso.
