I admit I'm not intimate with high finance. Could you please explain to me how an entity paying rentals to itself is a benefit? Would be interested to learn how that works.
In a thousand words or less, Eversource is mix of regulated divisions and non regulated divisions and they are all owned by one corporation. The regulated utility side divisions are monopolies and are typically only allowed a certain low profit margin by the state regulators. The ratepayers to the utility also pay for the investments in infrastructure to supply power as part of their rate. Therefore they are part "owners" of the assets including electrical right of ways. Some but not all of the right of ways were bought under eminent domain under public benefit rules which means owners were forced into selling them. Many were not eminent domain but the owners didn't have a lot of choice but to sign over rights or the owner didn't get power run to the area. Inherent in these voluntary and forced purchases were that they ultimately for the public benefit of the region. There are other divisions of Eversource that are not regulated they are typical business ventures where they take a risk and get a much higher return that goes to the stockholders. They can finance the risk with the predictable cash flow from the regulated side of the business, so they can be their own bank or get access to low cost capital. Nothing wrong with that, although Enron started out that way. The tricky part is how the two parts of the corporation deal with each other. NP is set up as a non regulated part of Eversource with close ties to the regulated side of Eversource NH (the old PSNH). Profits from NP go directly to the Eversource corporation bottom line and bypass the Eversource NH ratepayers. NP is going to rent a space on the right of ways owned by Eversource NH at a very low rate, that some entities argue are well below market value. They then will be able to charge Hydro Quebec a much higher rate for the rental of the right of ways as part of their higher profit on NP. As they are deregulated they have the right to make much higher profit. This sets up a situation that potential profits on assets owned by ratepayers are being handed across corporate boundaries to a different division rather than being handed back to the ratepayers. I am not sure what entity has been making the substantial overpayments on properties in northern NH but I wouldn't be surprised if Eversource NH wrote the checks thus the ratepayers may already be subsidizing the effort. Given the successful maneuvering by SPNHF they own a lot of very overpriced land in the north country which is blocked by SPNHF purchases.
Eversource could have set the project up under the regulated side of the company but that would put it under regulatory scrutiny and would reduce the potential profit as its profits would go in the pool and it would benefit the ratepayers. The regional grid operator has deemed the project non essential so it would be hard to justify it to the ratepayers. The other issue is that in order to get HQ to make a commitment Eversource needed to make an offer on the cost to move power and most expect that HQ is not offering to pay the extra capital cost to bury the line, so Eversource ends up eating a large overrun diluting their profits. HQ is willing to wait while various projects compete for the lowest cost and the date that they are ready to carry power and it sure looks like the VT project is winning as they made an early decision to not go cheap by going underwater and underground. They already have their federal permit in hand and didn't benefit from getting subsidized right of ways from a corporate cousin. Eversource rolled the dice and to date it looks like they are trying to continue playing with a bad hand in hopes that their long term largesse to state and local politicians will be remembered.
