Hydro-Québec says it could be forced to take a financial charge of more than a half-billion dollars if it is unable to complete its transmission line project in Maine.
The 336-kilometre project that would cross Quebec and the American state to bring electricity to Massachusetts was rejected by 59 per cent of Maine voters in a referendum last November.
The future of the project is in the hands of the Supreme Court of Maine, which will have to determine if the referendum result is unconstitutional, as claimed by Hydro-Québec and its partners. Until then, work is suspended.
If the project is abandoned, Hydro-Québec estimates that it will have to record a charge of $536 million in its results, according to its annual report.
This amount includes property, plant and equipment costs of $347 million that will be charged to earnings. This represents more than half of the $600 million budget planned to build the Quebec portion of the line, which is 103 kilometres long.
The other $189 million are the obligations the company has agreed to pay under agreements.
Despite the suspension of work, the provincial utility is not giving up.
“Hydro-Québec remains convinced of the value, merits and importance of the NECEC project,” says spokeswoman Caroline Des Rosiers.
“Given the ongoing legal proceedings, there is no indication that the project will be abandoned and Hydro-Québec remains very confident about its completion.”
Hydro-Québec also spent US$22.3 million or C$28 million on election expenses. It also recorded a charge of $46 million for the abandonment of the Northern Pass line project, which was to carry electricity from Quebec to Massachusetts, via New Hampshire.
The electricity sales contract with Massachusetts would bring in revenues of $10 billion over 20 years for Hydro-Québec. It would reduce greenhouse gases by 3 million tonnes, the equivalent of taking 700,000 cars off the road.