It the northeast of the US, the biggest provider of electricity is a Canadian company called Hydro Quebec, they have great capacity in producing hydro and if you consider the ultimate consumers around the Boston area – a great capacity to consume hydro. There is only one thing in the way, other states which the hydro towers and lines must go through. If you ever looked at hydro corridor they cut the trees down in the corridor and place the lines and towers in the corridor. The result is electricity is delivered from the dams which the rivers and lakes ensure will run and green, clean electricity is delivered to consumers.
If the New England Clean Energy Connect goes through the contract will be a 20 year deal to supply $10 billion worth of electricity to Massachusetts. The state will decommission some gas plants and consumers will be generally happy when the lights are turned on the electricity is green and given the hydro rates can be relatively constant.
In an article by Adrian Morrow of the Globe and Mail, not everyone agrees with the corridor. The cutting of the trees has environmental groups concerned, the electrical companies who have gas-fired power plants (the vested interests) are not happy and some local politicians believe Maine is not getting enough benefits for its land. Hydro Quebec has offered the state of Maine discounted electricity and $258 million. If you want more information you can check out the New England Clean Energy Connect website.
Even though Maine’s governor and the the Public Utilities Commission both approved the transmission corridor, opponents received enough signatures to trigger a referendum under Maine law.
The real issue is Hydro Quebec has hired consultants and there is a referendum or vote on the corridor. Should Hydro Quebec be paying or should the state of Mass be paying for the consultants? According to filings with the Maine Ethics Commission, Hydro Quebec has spent $8.3 million on the ballot question.
Linking to dividend paying stocks, in many portfolios there will be electrical utilities because people need electricity for home and work, someone needs to provide the electricity and Utility Boards tend to increase the price each year which means every year the companies can pay their dividends. As we move to a greener economy, utility companies can provide greener electricity, however they will be logistics or transmitting the electricity from the source to the consumer. What is good and what will consumers accept? As investors you are interested in the result not how the electricity gets where it is going, but sometimes it is good to think about it for with most things there is a cost benefit to it.
There are more questions than answers, till the next time – to raising questions.