Hydro-Quebec looking at possible $500-million loss if Maine line scrapped

If it fails to complete its interconnection line project in Maine, Hydro-Quebec will have to record a charge of more than $500 million to its books, the province-owned utility estimates.

The 336-kilometre project, which would run through Quebec and the U.S. state to deliver electricity to Massachusetts, was rejected by 59 per cent of Maine citizens in a referendum last November.

The future of the project is in the hands of the Maine Supreme Court, which will have to determine whether the referendum result is unconstitutional, as claimed by Hydro-Quebec and its partners.

If the project is abandoned, Hydro-Quebec estimates that it will have to record a $536 million charge to its bottom line, according to its annual report.

This includes $347 million in capital costs and represents more than half of the $600 million budgeted to build the 103-kilometre Quebec portion of the line.

The other $189 million represents amounts that the company has committed to pay under agreements.

This is the first time Hydro-Quebec has provided a cost estimate for possibly abandoning the project.

Hydro-Quebec's partner in Maine, NECEC, has already spent nearly US$450 million, representing 43 per cent of the anticipated costs, according to court filings.

Despite the suspension of work, Hydro-Quebec has not given up.

"Hydro-Quebec remains convinced of the value, merits and importance of the NECEC project," said spokesperson Caroline Des Rosiers. "Given the legal proceedings underway, there is no indication that the project will be abandoned and Hydro-Quebec remains very confident that it will proceed."

The power sales contract with Massachusetts would generate $10 billion in revenue for Hydro-Quebec over 20 years. It would also reduce greenhouse gases by 3 million metric tons, the equivalent of taking 700,000 cars off the road. 

-- This report by The Canadian Press was first published in French on March 1, 2022.