There’s a new problem for the multi-billion-dollar contract announced by Hydro-Quebec last week with Massachusetts.

Hydro-Quebec had signed a 20-year deal to provide the U.S. state with hydroelectricity, but on Thursday, a Site Evaluation Committee in New Hampshire voted to deny a permit to build the transmission line needed for the project.

Hydro-Quebec spokesperson Serge Abergel said the decision is disappointing, but it isn't the end of the process.

"This was a known risk. The site evaluation committee has been ongoing for a year and a half now, and we knew they had to make a decision, so we submitted not just Plan A, which was Northern Pass, but also a Plan B and C to meet Massachusetts’ energy needs," said Abergel.

He added that the committee's rationale for the rejection was that it felt it did not have enough information to approve the deal.

Last week Hydro-Quebec's president said he believed New Hampshire would approve the deal.

"Things have evolved a lot over the past two years in New Hampshire. I think also there was much more opposition two years ago," said Eric Martel.

"First of all the governor in place right now, Governor Sununu, is in favour of the project and he's been very supportive and I think also our partner with the project, Eversource, has done a lot of work with the people that had their concerns."

Eversource, Hydro-Quebec's American partner in the deal, was much harsher in its response to the rejection and said the Site Committee's decision "failed to comply with New Hampshire law."

Eversource has 30 days to appeal the decision and failing that can pursue other legal action.

However it has also floated the possibility of burying about one-third of the electrical transmission wires across the state in order to deal with objections to overhead wires.

Quebec Economy Minister Dominique Anglade said the setback was not insurmountable.

"You know you have to put things in perspective. First of all the thing that we have to remember with Hydro-Quebec is we are shining internationally. It's looked at as an opportunity to really develop renewable energy so that's why originally they called the contract. Now I understand that there might be some issues. We see it in other files, but I know that they are looking at all the alternatives today," said Anglade.

If a deal with New Hampshire cannot be worked out, Hydro-Quebec will explore moving electricity through Maine or Vermont to reach Massachusetts.