UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
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| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of the Registrant. |
On December 29, 2020, Central Maine Power Company (“CMP”) and NECEC Transmission LLC (“NECEC LLC”), each of which are subsidiaries of Avangrid, Inc. (the “Corporation”), entered into a Support Agreement (the “Support Agreement”) with H.Q. Energy Services (U.S.) Inc. (“HQUS”) in connection with the development of the New England Clean Energy Connect (“NECEC”) transmission line project, which sets forth the terms and conditions pursuant to which HQUS will provide a portion of the funding for the benefits contemplated by the stipulation dated February 21, 2019 (the “Stipulation”) approved by the Maine Public Utilities Commission (“MPUC”) by Order dated May 3, 2019 granting a Certificate of Public Convenience and Necessity (“CPCN”) for the NECEC transmission line project.
The NECEC transmission line is a 1,200 megawatt (“MW”) +/-320 kilovolt (“kV”) high voltage direct current (“HVDC”) transmission line to be constructed, owned, operated and maintained by NECEC LLC extending from the U.S.-Canada border in Maine to a direct current to alternating current converter station to be located in the City of Lewiston, Maine. It will interconnect at the U.S.-Canada border with a HVDC transmission line to be constructed, owned, operated and maintained in Quebec by Hydro-Québec TransÉnergie, a division of Hydro-Québec and affiliate of HQUS. The Stipulation included commitments by NECEC LLC and HQUS with respect to certain funds providing additional benefits to the State of Maine, including, without limitation, to Maine retail electricity customers, host communities within which the NECEC transmission facilities will be located, and Maine low-income energy customers.
Pursuant to the Support Agreement, in the event that (i) NECEC LLC breaches its obligations under certain transmission service agreements entered into with HQUS, such that HQUS is unable due to such breach to receive transmission service over the NECEC transmission line as contemplated by such agreements, or (ii) certain material failures to comply with the Stipulation or the CPCN occur (subject to any applicable notice and cure period) which failure precludes the operation of the NECEC transmission line, NECEC LLC and by way of a parent guarantee, the Corporation, agrees to assume the obligation of HQUS under the Support Agreement and the Stipulation to make quarterly benefits payments of $875,000 when and as due up to an aggregate amount of $140,000,000 in benefit payments until such time as transmission service is restored and NECEC LLC is again in compliance with the HQUS transmission service agreements, the Stipulation, the CPCN or the Support Agreement, as applicable, which shall relieve the obligation of HQUS with respect to such payments.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| AVANGRID, INC. | ||
| By: | /s/ Douglas Stuver | |
| Name: | Douglas Stuver | |
| Title: | Senior Vice President – Chief Financial Officer | |
Dated: January 5, 2021
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