In a partial and tentative victory for the developers of a stalled New England power corridor, the Maine Supreme Judicial Court ruled Tuesday that a voter-approved law blocking the project would be unconstitutional if enough work on the transmission line had already been completed.

Now it will be up to a lower court judge to determine if the New England Clean Energy Connect project had established so-called vested rights before the statewide referendum was held.

The ruling, which is complicated and still being reviewed by the parties, will have the effect of prolonging the question of whether the $1 billion transmission project will be completed and when. Avangrid Networks, the parent company of Central Maine Power, is fighting to develop the 145-mile corridor to carry electricity from Quebec to Massachusetts.

The justices wrote:

“We conclude that section 6 of the Initiative, as applied retroactively to the (Public Utilities Commission permit), would infringe on NECEC’s constitutionally protected vested rights if NECEC can demonstrate by a preponderance of the evidence that it engaged in substantial construction of the project in good-faith reliance on the authority granted by the permit before Maine voters approved the initiated bill by public referendum.”

It sent the case back to the Business and Consumer Court nearly 10 months after Maine voters endorsed a law aimed at preventing the $1 billion transmission line from moving ahead.

The prospects of another protracted legal fight is a mixed blessing for both NECEC and its adversaries.

Tuesday’s decision keeps the project alive, good news for the developers. But the project is being paid for by Massachusetts utilities and their customers, part of a massive effort to shift the state to clean energy to fight climate change. Years of delay already have cost NECEC millions of dollars in contract extensions. It’s not clear how long those accommodations will continue.

“We’re going to have another year in court,” predicted Tom Saviello, the former Maine lawmaker who led the referendum campaign. “This is another year delay at a minimum before this is sorted out. At what point does Mass say, ‘We can’t wait another year?’ “

FOES SAY TIME ON THEIR SIDE

For that reason, Saviello said, he wasn’t disappointed in the Supreme Court ruling. Sorting out the legal issues flagged by the court will take time, he suggested, and time is on the side of opponents.

But NECEC’s parent company, Avangrid, said in a statement that it was pleased with the outcome. It didn’t address the nuances of the decision, but instead framed it as another step in its fight to bring clean energy to the market and overcome opposition from fossil fuel interests.

Avangrid and NECEC Transmission LLC are fighting in court to nullify the effect of last November’s ballot initiative that banned the construction of “high-impact transmission lines” in a portion of western Maine. That case is called Avangrid Networks v. Bureau of Parks and Lands.

Avangrid maintained that the new voter-approved law is unconstitutional and deprives the company of its “vested rights” to finish the project after receiving permits, clearing more than 124 miles of right-of-way, erecting more than 120 steel towers and spending $450 million on construction – nearly half of the corridor’s estimated $1 billion cost. Opponents said Avangrid took a risk and was well aware of the legal challenges it faced.

The court heard oral arguments in May on the voter-approved law and another separate but related case about the transmission corridor.

The second case has yet to be decided and centers on whether the project has a valid lease to cross state land. The issue involves a lower court’s reversal of a state agency’s decision to lease a 1-mile section of public lots near The Forks to Central Maine Power for the NECEC transmission line to cross. That case is called Russell Black v. Bureau of Parks and Lands.

NECEC opponents said the lease was not properly negotiated. At issue was whether the agency properly conducted an assessment of whether the lease would cause a “substantial change” to the public land. A 1993 amendment to the Maine Constitution requires a two-thirds vote of the Legislature to approve any substantial change.

Last August, a Superior Court judge agreed with opponents and reversed a decision by the Parks and Lands Bureau to lease the land to CMP. The company appealed the judge’s ruling.

LEASE CASE UNRESOLVED

The court didn’t rule on the public lots lease case Tuesday, leaving the issue up in the air for now.

The two cases were heard back-to-back by Chief Justice Valerie Stanfill, as well as Associate Justices Joseph Jabar, Thomas Humphrey and Andrew Horton. Joining them was Robert Clifford, an active retired Supreme Court justice.

Tuesday’s ruling was complicated because the law approved by voters last November contains six sections, three of which were central to this case.

Section 4 requires legislative approval of construction of any “high-impact transmission line” in addition to a permit from the Public Utilities Commission. Section 5 bans construction of any such line in the “Upper Kennebec Region” of western Maine, a 43,300-square-mile area. Section 6 requires those two sections to be applied retroactively to Sept. 16, 2020.

The day after the November vote, NECEC filed a complaint in Superior Court alleging, among other things, that retroactive application of the law, as required in Section 6, was unconstitutional.

The Supreme Court ruled Tuesday that Section 6 of the law would be unconstitutional, to the extent that it requires Sections 4 and 5 to be applied retroactively, “if the appellants (NECEC) have acquired vested rights to proceed with project construction.”

But the justices stressed they weren’t making a decision on whether the project had been started and continued in good faith. That’s up for the trial judge at the Business Court to decide.

LAW STILL IN EFFECT

After an initial reading, one of the attorneys representing project opponents, Jeana McCormick, said the ruling indicated the Law Court didn’t have enough facts to answer the questions posed by Section 6. In the meantime, no new construction can take place.

“The bottom line is that the new law remains in effect,” she said.

That view was echoed by Elizabeth Boepple, a lawyer representing the Say No to NECEC citizen group. It’s important, Boepple said, that the decision didn’t invalidate the law. It found that vested rights are a constitutional right, and is asking the Business Court to determine whether NECEC started construction in good faith based on its permit from the PUC.

“However,” Boepple said, “it is important to remember that the PUC’s license is not and was not a license to actually construct the corridor. … In short, the law as enacted by the voters of Maine remains the law: the NECEC corridor cannot be built.”

A Washington, D.C., analyst who advises energy and institutional investors and follows transmission projects said it was good news for NECEC, but that the unresolved issue of the public lots is a looming threat.

“We consider today’s ruling a narrow win for CMP,” said Timothy Fox, vice president at ClearView Energy Partners, LLC, “but the project developer should not be popping champagne corks just yet. A separate legal challenge to Section 1 of the citizen initiative could prove equally disruptive. NECEC opponents have sought a multi-prong attack against the transmission line, and other legal challenges remain pending.”

Jeff Marks, executive director at ClimateWork Maine, said large transmission projects will be needed to modernize the grid with carbon-free energy to power electrified buildings and vehicles.

“The NECEC project,” said Marks, who represents a network of business leaders focused on climate issues, “along with northern Maine renewable and transmission projects and future offshore wind, can strengthen Maine’s economy, protect consumers, and deliver a clean energy future for the region that transforms buildings, transportation and the electricity grid.”

PROJECT DEADLINE LOOMING

The NECEC project is designed to bring 1,200 megawatts of power from Hydro-Quebec in Canada to the New England electric grid over a 145-mile route and through a converter station in Lewiston. The project would help Massachusetts meet its clean energy and climate goals and is being paid for by that state’s electricity customers. It would have the capacity to power roughly a million homes.

NECEC won its first permit from the state Public Utilities Commission in 2019, which found the project to be in the public interest. But other permits have been appealed by opponents, including ones issued by state environmental regulators and the federal Army Corps of Engineers.

In another tentative victory for project developers, the state’s Board of Environmental Protection on July 20 turned down an appeal of an agency permit allowing construction.

Opponents had argued that the Department of Environmental Protection shouldn’t have issued a permit without further review and scrutiny from the agency’s citizen board. But the board rejected the appeal and kept the permit in force, with some minor amendments. Opponents have appealed the decision.

The NECEC project has turned into Maine’s most contentious environmental flashpoint in decades. Years of government review, citizen input, campaigns and negotiations have seemed only to harden public opinion. There’s little agreement on what impact the transmission corridor, which already is partially built, would have on the region’s renewable energy and climate change goals, electric rates, Maine’s prized forestlands and future power ventures.

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