Referendum won’t end the high-stakes legal fight over the CMP corridor

By Lori Valigra, Bangor Daily News Staff

The deluge of commercials for and against Central Maine Power Co.’s hydropower corridor will stop once Maine votes on Question 1. But the outcome will spark more controversy and court battles from both sides of the project, legal experts say.

The vote puts billions of dollars at stake for CMP and the rivaling fossil-fuel and nuclear companies that would lose share in the regional power grid if the corridor is built. That is the reason why the referendum, which topped $60 million at the end of September, is the most expensive in Maine history. Another $240 million in negotiated benefits for Mainers, some spread over 40 years would be at risk if the project is canceled. 

“There will be a vote, but it’s not over for either side, unfortunately,” Barry Hobbins, Maine’s former public advocate, said.

Previous legal wranglings set the stage for the fight to come. CMP could challenge this referendum on the same grounds that Maine’s high court invalidated an anti-corridor question in 2020. Opponents will continue a lawsuit over a disputed stretch of public land, which could delay the project by a year. CMP may point to its investment in the project to entice judges to uphold it, but opponents are already arguing that the company should have known that the construction carried a massive risk.

A yes vote on the Nov. 2 referendum aims to kill CMP’s New England Clean Energy Connect corridor, known as the NECEC. It also would require the Legislature to approve similar projects anywhere in Maine and to approve projects on public land, both by two-thirds votes in both chambers. A no vote would allow the corridor to proceed.

If the referendum to kill the corridor passes, CMP could potentially challenge the question itself, Tony Buxton, a lawyer who represents the pro-corridor Industrial Energy Consumers’ Group, said. A 2020 anti-corridor referendum was invalidated by the state’s high court, which said it violated the state constitution by usurping the power of regulators entrusted with approving utility projects.

Buxton contended that some of the current referendum’s language is similar to the earlier one and could potentially be challenged because it may violate the separation of powers required by the state’s constitution. But Adam Cote, a lawyer representing corridor opponents and who helped draft the text, said it is based on a bill that was before Legislature when it adjourned due to COVID-19 in March 2020, and it will stand up in court.

“It is very telling that CMP did not challenge it before the Nov. 2 election, as it did with the first referendum attempt,” Cote said.

As a publicly traded company, CMP has a duty to its shareholders and cannot walk away from this kind of investment, Buxton said. If Mainers vote no, he expects corridor opponents to continue with an existing lawsuit over a lease for a contested stretch of public land or initiate new lawsuits aimed at stalling or stopping the project. 

He said big energy companies behind some of the anti-corridor ads against the corridor have a strong incentive to do so because they can save millions of dollars by continuing to operate fossil fuel generators. A study in 2020 found that fossil fuel and nuclear companies could lose $1.8 billion over 15 years if the hydropower corridor is built.

“Either way, there’s going to be litigation,” Buxton said.

Another approach CMP could take if the referendum passes is a “vested rights” argument, in which it would show it has been actively developing the project in good faith and thus should be allowed to proceed, according to a legal professional familiar with the situation who requested anonymity to speak candidly. 

CMP said this month it has spent $350 million on the project so far and that it will lose $67 million if work on the corridor is delayed for a year over the disputed lease. As of Oct. 4, about 108 miles of right of way have been cleared and 58 poles installed. Most clearing is to be completed by the end of the year.

It is unusual for CMP to have spent that amount of money that quickly, the legal professional said. The company also has been buying equipment and deploying it to the construction site before it is due to be used.

“It’s quite clear that they’re building the vested-rights argument,” the person said.

Cote said CMP could have a difficult time convincing a court that it was acting in good faith while building the corridor. A part of the referendum is retroactive until September 2020, when the second referendum was filed. At the time, CMP didn’t have all permits in place and hadn’t started building. He said the activity since then amounts to “building in bad faith.”

CMP did not comment on its strategy if the referendum passes. Instead, it continued touting the economic and environmental benefits of the corridor and criticizing the retroactive dates in the referendum.

“If passed, Question 1 sends a chilling message that business is not welcome in our state and threatens Maine’s renewable energy future,” Thorn Dickinson, CEO and president of NECEC Transmission LLC, the CMP affiliate developing the corridor, said.

Hobbins said a large reason the project is unpopular is because of CMP’s poor customer service after an October 2017 windstorm that knocked out power to some customers for up to a week and a botched rollover of a new customer service system at the same time. 

He said the company has since improved service, but complaints remain. Cote said Mainers see the dissatisfaction with CMP in a different way.

“We can’t trust them to do the corridor,” he said.