Lease State-Owned ROWs for Transmission Lines
- State-owned highways and rail beds (ROWs) offer key siting advantages for buried lines
- Technically and financially feasible (SB361 Commission)
- State government gets: revenues, avoided damages/problems/costs
- Developer gets: less risk, more certainty, easier process
- Regional innovators already pushing ahead: New York, Maine
How big is the state’s potential revenue opportunity? Highlights from an indicative  analysis…
- 200 mile north/south route, from Canadian border to southern NH
- 1200MW line used exclusively by Hydro-Quebec
Approach #1: use value benchmark from Northern Pass’s land buys in Coos County
- $400-$1,000 per linear foot of ROW, or $2 million to $5 million per mile
- Capital value of $400 million to $1 billion for 200 miles of state-owned ROW
- Model annual rent at 5% of capital value
- Annual rent to state: $20 million to $50 million
Approach #2: apply 10%-20% land rights “royalty” to HQ’s revenues from the line
- Royalty rate from shale gas precedents
- 1200MW = 10.5TWh/year, or $430 million/year at HQ’s 2012 export pricing
- Annual rent to state: $40 million to $90 million
Approach #3: use New Jersey’s new state ROW rental guidelines
- Rentals calculated per square foot used (assume 30’ width for line area)
- Range from $0.15 to $1.40 per square foot, or $25,000 to $220,000 per mile
- Annual rent to state: $5 million to $45 million
Approach #4: make state-to-state contact with New York, Maine to get their estimates
Approach #5 (most reliable): NH runs an open “tender” for use of state ROWs
- Open to HQ directly as well as full range of transmission developers
 Contact REAL for more detail on the analysis.
 Some land buys were priced at up to $4,000/ROW foot, but we exclude these to be conservative.
 HQ’s 2012 exports produced net revenues of 4.1 cents/kWh (2012 Form 18-K).
 Low end of range is an “outlier” because it is only for small, low-value projects. New Jersey is working on updates that will likely raise the recommended rental ranges. Contact REAL for a summary of New Jersey’s guidelines.