November 30, 2023

The head of Hydro-Quebéc’s U.S. arm says it regretted millions of dollars poured into defending its cross-border energy project against a Maine referendum even before state voters decided to outlaw such spending by foreign government-owned firms.

On Tuesday, Maine voters approved a ballot measure that “(banned) foreign governments and entities that they own” from making financial contributions toward campaigns or candidates in local referendums. The measure closes a loophole in federal election law, which otherwise bans such foreign influence in candidate elections but does not cover ballot measures.

But the head of the Quebec government-owned utility’s American subsidiary told Global News the decision won’t affect their operations in the state or elsewhere.

“We don’t really have any thoughts to the future of this, because there is no scenario in which we will ever do a referendum in Maine again,” Serge Abergel, the chief operating officer at Hydro-Quebéc Energy Services U.S., said in an interview.

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“This has been a very bad experience.”

Abergel said the whole saga, which he called a “first-ever,” has been a learning experience.

“We have never seen this. We have never done this. We have no interest in doing this again. And to be honest, in the future, we will be very, very careful to avoid places that have referendum processes that can retroactively go back in time and take permits away from renewable projects,” he said.

“It just doesn’t build investor confidence and doesn’t do anything, but just take away your focus and ability to deliver these projects on time.”

What was the transmission line referendum?

Although Hydro-Quebéc is owned by the Quebec government and is the province’s public power utility, it has been exporting hydroelectric power to the northeastern U.S. since the 1980s.

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The company calls itself North America’s “leading provider of clean energy.”

The issue of foreign influence in Maine became a concern after Hydro-Quebéc, through its U.S. arm, tried and failed to stop a state referendum that sought to halt the New England Clean Energy Connect (NECEC), a US$1-billion hydropower transmission project connecting Quebec to New England’s electrical grid in Maine.

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Close to US$100 million was spent by groups on both sides of the debate, making the referendum the most expensive in the state’s history.

Filings to the Maine Ethics Commission show Hydro-Quebéc Energy Services U.S. spent over US$22.3 million to fight the referendum through a ballot committee called the Hydro Quebec Maine Partnership.

Abergel, who is listed as the principal officer of the committee, would not confirm that number but acknowledged the company spent “upwards of $10 million” against what he called an “extremely aggressive” campaign opposing the transmission project.

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“(There was) a multitude of all kinds of accusations, starting with the fact that, in the eyes of these (opposing) firms, hydropower is a dirty resource,” he said. “Other accusations were the fact that Canadians should not be trusted. There were lots of allusions to Russia.”

He said although Hydro-Quebéc Energy Services U.S. is legally an American business, it is still considered a foreign company because it is a subsidiary of Hydro-Quebéc proper.

State filings show the top donors to a political action committee that opposed the project, Mainers for Local Power, were three energy companies — NextEra Energy Resources, Vistra Energy Corp., and Calpine Corp. Each owns a natural gas-fired power plant in Maine. NextEra, which gave US$20 million to the campaign, also owns solar power projects in the state. Vistra and Calpine each donated over US$2 million.

Environmental groups, including the Natural Resources Council of Maine, were uniquely aligned with those energy companies in opposing the project and worked with state and local politicians to gather support for a referendum to stop it.

FILE – In this Tuesday, May 28, 2019, file photo, a homemade sign is posted on a telephone pole in protest of Central Maine Power’s controversial hydropower transmission corridor in Jackman, Maine. A $1 billion hydropower electricity transmission corridor called the New England Clean Energy Connect would cut through sparsely populated woodlands. Environmental groups disagree about whether the 145-mile corridor comes at too high a cost in loss of trees and wildlife habitat. (AP Photo/Robert F. Bukaty, File).

Over the course of 2020 and into 2021, when the referendum on the project was being debated, Hydro-Quebéc Energy Services U.S. sponsored dozens of advertisements on Facebook that touted the environmental benefits of the NECEC project.

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They were joined by their local partner in the project, Central Maine Power, one of the state’s two main private utility companies, which spent over US$5 million on the referendum fight, according to state filings. The utility’s owner, Avangrid — part of Spain-based firm Iberdrola — is co-developing the NECEC with Hydro-Quebéc.

“We had to defend our clean energy,” said Abergel. “That’s how we got into the referendum. Not because we wanted to do a referendum in Maine, but because we were directly implicated and had to respond.”

Hydro-Quebéc and Avangrid introduced the NECEC in 2017, with the goal of supplying up to 1,200 megawatts of Canadian hydropower to the New England power grid. The developers claim it will result in up to 3.6 million metric tonnes of carbon emissions reduction each year — the equivalent of removing 700,000 cars from the road annually.

They also claim it will lower electricity costs for homeowners in Maine and Massachusetts and pour millions in tax revenue into the local economies.

Both sides invested in television ads that flooded local airwaves. Tucker Carlson, then the most highly-rated host on Fox News who lives in Maine, criticized the project and the way it was originally approved in a segment on his show.

Ultimately, the referendum passed in November 2021, with 59 per cent voting in favour of stopping the NECEC. Maine Gov. Janet Mills ordered construction to be halted just 10 months after it began.

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In 2022, the Maine Supreme Judicial Court ruled that the referendum had violated the developers’ constitutional rights, as state and local regulators had already signed off on the project. A jury reaffirmed the verdict earlier this year and unanimously agreed that construction could resume.

The project is set to be complete and open for operations in 2026.

Foreign money in politics under scrutiny

Maine’s foreign influence referendum comes when influence — and interference — by outside governments is a top issue in Canada and the U.S., particularly when it comes to elections.

The measure follows legislation that sought to close the same loophole that passed the state legislature but was vetoed by Mills, who cited concerns about the proposal’s constitutionality and said it was so broad it could silence “legitimate voices, including Maine-based businesses.”

Sen. Richard Bennett, R – Oxford, speaks at a news conference about his desire to override Gov. Janet Mills’ veto of a bill that would have banned entities owned by foreign governments from influencing Maine elections, Wednesday, June 30, 2021, at the State House in Augusta, Maine. The bill was inspired by Hydro-Quebec’s vast spending to convince Maine voters to defeat referendums that would sink Central Maine Power’s controversial transmission project. (AP Photo/Robert F. Bukaty).

Republican state Sen. Rick Bennett, who led the campaign to put the proposal on the ballot, praised voters for taking a common sense step toward “getting control” of money in politics.

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“It’s one of the greatest scourges in politics,” Bennett said Tuesday evening. “We have to deal with that before we can deal with the other host of issues.”

But Abergel says what Hydro-Quebéc did in Maine doesn’t rise to the level of “foreign interference” as has been defined in high-profile reports about the alleged meddling activities of China and Russia in Western democracies.

“All we did here was present facts and information about our process,” he said. “We weren’t providing facts about another referendum or about a candidate election or anything unrelated to us.

“To call us defending ourselves ‘foreign interference’ I believe is a real stretch.”

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