Clean power contracted for the year can still leave a buyer exposed in the few hours when replacement electricity costs the most. New England's first winter with Canadian hydropower on a new transmission line showed how that happens, and the argument over who pays is now in federal court.
Eversource, National Grid and Unitil, the three Massachusetts utilities that buy power delivered over the 1,200-megawatt (MW) New England Clean Energy Connect (NECEC), sued Hydro-Québec in federal court in Boston on September 8. The utilities say in their complaint, as reported when it was filed, that deliveries stopped for all or part of 12 days in late January and early February and that they spent an extra $40 million buying replacement energy. Hydro-Québec sued the same day. It argues that emergency curtailments ordered by Quebec's grid operator count as force majeure and that the utilities owe it about $50 million for electricity it did deliver. No court has ruled on either claim.
The Cold That Hit Boston Also Hit Montreal
The physical record is not in dispute. The U.S. Energy Information Administration (EIA) reports that NECEC entered commercial operation on January 16. Flows stopped on January 24 and stayed largely offline until January 26 while Quebec held its electricity for domestic demand. From the afternoon of January 24 until late on January 25, New England sent more power north to Canada than it received, and oil-fired generation in the region climbed past natural gas.
Hydro-Québec's first-half financial report fills in the supply side. Three years of low runoff had left its large reservoirs at historically low levels. At the end of January, peak demand in Quebec stayed above 38,000 MW for seven straight days, a record. The utility cut short-term export sales by 2.3 terawatt-hours (TWh) in the first half and bought power when prices were high, even as sales under long-term contracts rose with NECEC online.
Imported hydropower is not suddenly a bad bet, and Hydro-Québec still expects the 20-year NECEC contract to earn stable income over its life. The lesson is narrower. A cold air mass parked over Quebec and New England at once squeezed both ends of the line, in the very week a buyer would have wanted geographic distance to work in its favor.
What a Clean Power Purchase Actually Covers
Hydro-backed offers usually bundle an annual clean energy volume with some promise about when that energy arrives. Fewer spell out what happens financially when it does not. A yearly volume can be laid against a facility's hourly load to see how much of the coldest week it really covers, and a delivery promise is only as firm as the written rules for interruptions.
Financial protection deserves the closest reading. It works when a contract names a settlement price, a delivery point and a volume, and when payment arrives before the replacement power bill does. Long-term agreements can move exposure between the parties in ways nobody priced at signing, and the Massachusetts utilities are now testing in court whether theirs did.
Few corporate buyers in New England hold NECEC contracts directly. Their exposure runs through a retail supplier or a utility, so whether an upstream shortfall reaches the bill depends on the product they chose. A fixed-price retail plan may absorb it, while an index-linked one can pass it straight through. The Massachusetts lawsuits do not change any company's retail terms, but they show how much rides on clauses that rarely get read before signing.
A Remedy in Court Does Not Pay This Month's Bill
Recovery can be slow. The utilities bought replacement energy in January, and the question of who should bear the cost reached a courtroom eight months later. Hydro-Québec, for its part, says the utilities have refused to pay for power it delivered over the same period. Whoever prevails, both sides carried the cash consequences while the dispute ran.
For a corporate buyer, the practical step is to price an interruption before counting on a remedy. A finance team can take its own peak load, the share covered by contract and a plausible outage length, then ask the supplier what the facility would pay for the missing megawatt-hours and how soon any compensation would follow. Caps on damages, exclusions for emergency orders and the force majeure definition all belong in that conversation, since the Boston case turns on exactly those terms.
Buyers also have tools of their own. Moving flexible load out of the coldest hours shrinks the volume left uncovered, and a hedge tied to a different region or fuel holds up better than one exposed to the same storm. How a supplier performs under stress has become part of how counterparty exposure gets assessed. Watching that performance once the ink is dry is harder, and at many companies contract management has not kept up with portfolio growth.
What the Boston Case Could Settle
The open question is how a court reads force majeure in a contract built to export surplus power from a system that, for a few cold days, had none to spare. If the clause covers emergency curtailments ordered by Quebec's own grid operator, buyers of imported power will want to know how often such orders occur and what triggers them. If it does not, suppliers will probably price that exposure into future offers. The first filings on the merits, and any early motion to dismiss, are the next documents worth reading for anyone negotiating an import-backed supply deal before this winter's cold arrives.
