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To: rajaggs who wrote (81913)	12/16/2000 3:25:26 PM
From: kormac	Read Replies (1) \| Respond to of 95453

rajaggs Re:Doomsday cometh !!! It is coming through the back door to New England. huh best, Seppo ---------------- Canadians Set to Reach Their Power Play Goal ( December 16, 2000 ) * BY BOB WYSS JOURNAL STAFF WRITER * * * * Hydro-Quebec is changing the way it is exporting energy and will end its contract with New England utilities. * * * The last vestiges of a 15-year-old dream to make New England more energy competitive by looking north of the border have been dissipating this month. Hydro-Quebec, the massive Canadian electricity producer, earlier this week said it would stop shipments of power to the United States as contracts expire and demand at home increases. In particular, the Quebec government-owned company said it wont renew a 10-year contract with a group of New England utilities and future sales will be about half the level they have been, said Daniel Garant, Hydro-Quebecs managing director of project development. In the 1980s, New Englanders, led primarily by then-Gov. J. Joseph Garrahy and his chief energy aide, Edward F. Burke, led the charge to buy Canadian power. Two contracts were signed to supply New England with about 10 percent of its electricity from Hydro-Quebec, with the second contract ending this year. Burke, then chairman of the Rhode Island Public Utilities Commission and later a paid consultant for Hydro-Quebec and the Canadian province, kept pushing for more deals. It would be folly, pure and simple, for this region not to make the greatest possible use of an abundant supply of available power at our door steps, said Burke in a speech in January 1985. At that time he said that New England should increase its imports to 20 percent and at times he wanted even more. The advantages were obvious at the time, Garrahy recalled in an interview yesterday. The price of the Canadian power was significantly cheaper and from an environmental standpoint at the time it was considered to be the cleanest possible source of electricity. During the governors administration, Garrahy and Burke made numerous trips, not only to Montreal and Quebec, but also to James Bay in northern Quebec where the Canadians had built a massive hydroelectric facility. Plus, the Canadians wanted to build a second set of dams in James Bay, doubling the volume of electricity production. But it was not to be. There was a lot of resistance from energy planners in New England, said Garrahy. They worried that to get 20 percent or 25 percent of our supply from them was too great of a reliance. Utilities were never crazy about the arrangement. There was a lot of pushing, said Garrahy. New England utilities could make far more money by building their own power plants and getting paid a rate of return from the production of that energy. The Hydro-Quebec contracts offered cheaper rates but no incentives for stockholders. Also the environmental movement, at least neutral on the initial James Bay issue, came out strongly against the expansion plan. Environmentalists fretted about the massive area that would be inundated by the new reservoirs, the impact on fish species and the harm it might do to native people in the upper reaches of Quebec. Soon, not only Canadian but U.S. environmentalists were opposed. The plan to expand James Bay collapsed. Negotiations between New England utilities and Hydro-Quebec continued until around 1992. Shortly afterward Burke tried to persuade Narragansett Electric to buy more Canadian power rather than build the Manchester Street Station just south of downtown Providence. But the fervor Burke had built for Hydro-Quebec had died. The final blow came in the mid- 1990s when Rhode Island, Massachusetts and other New England states passed laws dramatically restructuring how electricity would be distributed. Utilities were forced to sell their plants and the generation of electricity was opened up to competition. Also, most of governments involvement in the long-term planning of energy resources was tossed out. By then Burke and his close friend, Robert Bourassa, the one- time Quebec premier and chief architect of the James Bay expansion, were dead. Garrahy said he decided to end the contracts with Hydro- Quebec that he had inherited from Burke. Technically, the Hydro-Quebec contract with New England utilities was to end in August. It was extended for a year to allow Hydro-Quebec to meet the volume of electricity it was expected to supply over the 10-year period. The company exports about 1,600 megawatts, enough to light about 1.6 million U.S. homes, to New England under the contract. Hydro- Quebec can curtail shipments if it needs the power at home. Despite Hydro-Quebecs announcement, Canadian power may still flow over the border on the transmission lines set up 15 years ago. The restructuring of the U.S. markets has opened up new opportunities for Hydro-Quebec to compete in this new marketplace. Rather than signing any new long-term contracts, Hydro-Quebec will shift its export strategy to selling into spot markets, Garant said. In June, Quebecs government ordered the Montreal-based company to increase the amount of power thats available in the province, and to set a fixed price for electricity. That commitment limits our ability to export huge volumes like we were in the past, Garant said. That doesnt mean we wont be present in those markets, it just means were going to be more selective. And while the dream of New England utilities and Hydro-Quebec being energy partners into the 21st century is over, some of the other wishes of energy wonks such as Burke are still very much alive. Fifteen years ago virtually all New England natural gas was pumped for hundreds of miles up from the Gulf Coast. Today several new pipelines deliver gas over the border from new fields in the Atlantic off Nova Scotia and as far away as Alberta.