Hydro-Qu\u00e9bec\u2019s first winter supplying Massachusetts under a major 20-year power deal has led to a court fight over nearly US$40 million.<\/p>\n
The dispute dates back to January, just days after Hydro began delivering power under agreements with three Massachusetts utilities. As extreme cold drove up demand in Quebec, Hydro reduced some exports; the utilities say that breached the promise of \u201cfirm\u201d power, while Hydro says emergency measures on the grid excused the shortfall.<\/p>\n
\u201cHydro-Qu\u00e9bec\u2019s position is straightforward: The electricity was delivered and received and therefore must be paid for,\u201d the utility said in a statement to The Gazette.<\/p>\n
Hydro-Qu\u00e9bec and the three Massachusetts utilities \u2014 Eversource, National Grid and Unitil \u2014 filed competing lawsuits in U.S. federal court on Sept. 8.<\/p>\n
Deliveries under the agreements began Jan. 16. Eight days later, as bitter cold pushed up electricity use in Quebec, Hydro began reducing shipments south of the border. The utilities say the reductions affected parts of 12 days between Jan. 24 and Feb. 9.<\/p>\n
The contracts call for 9.45 terawatt-hours of hydroelectricity a year, according to court filings. The utilities say that is equivalent to roughly one-fifth of Massachusetts\u2019s annual electricity demand.<\/p>\n
At the heart of their case is what they say Hydro had promised to deliver.<\/p>\n
The utilities say the power was sold as \u201cfirm\u201d and argue their service was supposed to have the same transmission priority as electricity serving customers in Quebec.<\/p>\n
In their complaint, they allege Hydro reduced deliveries \u201cto preserve the province\u2019s supply for local demand during a period of extreme cold in the region.\u201d They argue that was a discretionary decision, rather than an unavoidable emergency covered by the contracts.<\/p>\n
\u201cWe entered into this agreement to bring reliable, affordable power to customers, and our legal action seeks to uphold the commitments made under that agreement and help ensure customers receive the benefits they are owed,\u201d National Grid spokesperson Bob Kievra said to The Gazette.<\/p>\n
Unitil referred The Gazette to the utilities\u2019 court filing, saying it supports \u201creliable and affordable energy from a range of resources, including hydro power.\u201d<\/p>\n
The Gazette also contacted Eversource for comment, but did not receive a response in time for publication.<\/p>\n
Hydro\u2019s defence rests on what was happening in Quebec at the time.<\/p>\n
Its lawsuit describes an \u201cextreme, prolonged and life-threatening\u201d cold spell that pushed electricity demand close to historic highs. Hydro says its Trans\u00c9nergie unit, which oversees the province\u2019s grid, imposed reliability measures to stabilize the system and avoid wider power cuts.<\/p>\n
Hydro argues those measures amounted to \u201cforce majeure\u201d under the agreements, temporarily excusing it from delivering the full amount of electricity.<\/p>\n
It also says it took steps to free up power elsewhere, increasing imports from neighbouring markets, stopping spot exports and reducing interruptible supply to commercial and industrial customers.<\/p>\n
The Massachusetts utilities reject that explanation. They argue Hydro has not shown that the circumstances met the contracts\u2019 requirements for a force-majeure event or that a qualifying reliability order required their deliveries to be cut.<\/p>\n
That disagreement is also behind the US$40-million fight.<\/p>\n
The utilities say the missed deliveries forced them to buy replacement electricity and incur other costs, and they assessed Hydro about US$39.7 million in damages. Instead of paying Hydro that money and pursuing the claim separately, they deducted it from bills for electricity Hydro had delivered.<\/p>\n
Hydro says the contracts did not allow them to do that while the damages were still disputed.<\/p>\n
Its lawsuit says more than one million megawatt-hours of electricity were delivered and accepted in January and February. Hydro is seeking US$39.69 million in unpaid bills, plus interest.<\/p>\n
The dispute is not only about last winter\u2019s money. The utilities want the court to enforce what they say are Hydro\u2019s firm supply obligations in the years ahead, while Hydro wants a ruling that disputed damages cannot simply be withheld from future payments.<\/p>\n
The contracts run for 20 years, meaning the same question could arise again when severe cold pushes up demand in Quebec at the same time Hydro is committed to sending power south.<\/p>\n
For now, Hydro says \u201celectricity deliveries to New England continue as normal.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Hydro-Qu\u00e9bec\u2019s first winter supplying Massachusetts under a major 20-year power deal has led to a court fight over…\n","protected":false},"author":2,"featured_media":897070,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[45,49,48,101002],"class_list":["post-897069","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business","tag-ca","tag-canada","tag-hydro-quebec"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/897069","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=897069"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/897069\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/897070"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=897069"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=897069"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=897069"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}