Once upon a time, the primary questions to ask about upgrading the electrical transmission line in Coos County were how much it would cost and who would pay for it. After all, without such a line, projects for power generation from renewable resources like wind and wood, seen as key contributors to economic development in the hard-hit region, would come to a standstill.

But lately, other questions have been raised: How much of an upgrade will be needed? And will it be needed at all?

The recent conceptual approval of a high-power line from Canada to southern New Hampshire has amplified the question of whether ratepayers or taxpayers, locally or regionally, should contribute to the $150 million to upgrade the line so it can handle even more power from the North Country.

But the slow progress of the projects themselves, stalled by recession, greater supplies of natural gas and the supply - especially when it comes to wood - of renewable resources themselves, have already caused some people to wonder whether an upgrade makes sense.

"No serious investor is willing to spend money on this," said Rep. Jacqueline Cali-Pitts, D-Portsmouth, at a May 26 House Science, Technology and Energy Committee meeting on a bill to authorize the state's transmission commission to spend as much as $200,000 - if it can come up with money from the federal government - to hire a consultant to move the project along.

"To be perfectly honest, I'd rather run an extension cord to Canada," added Nickolas Levasseur, D-Manchester.

The committee, after stripping the bill of any state funding, did vote, 12-2, to move ahead with a consultant and further explore the upgrade, but with a lot more doubt than that lopsided vote might indicate.

In the queue

The Legislature has twice before firmly put its approval on the transmission upgrade - in 2007 and 2008. With the paper industry in trouble, with increasing demand for renewable and low-carbon energy, the seemingly unlimited supply of wind and wood, and numerous projects on the drawing board, the only obstacle seemed to be the ability to get the power generated in the North Country to the population centers.

The current Coos County transmission loop was designed for the delivery of local power needs, not for power to serve large cities. What was needed, the original consensus was, was a major upgrade around Whitefield - larger, thicker lines, bigger poles and more sophisticated transformer equipment.

The question was, and still is, who pays for it?

Currently, the system works on a first-come, first-served basis. Every company that needs to generate power gets in line - called an interconnection queue - so Federal Energy Regulatory Commission and the New England Independent System Operator can figure out whether there is enough capacity in the current system to handle more power.

If so, everything is fine and dandy. If not, the company requiring the power is expected to shell out the money to make necessary improvements.

That system seems to work when the upgrades are relatively minor. The first two companies in the Coos County queue, for instance - Granite Reliable Power and Clean Power Development - appear to be able to get up and running without any major upgrade at all.

Granite Reliable, a subsidiary of Noble Environmental Power, wants to build a 33-turbine, 99-megawatt wind farm in Millsfield and Dixville, with a substation in Dummer. It will have to spend as much as $8.5 million (a small fraction of the $275 million project) to upgrade the lines - basically tightening existing lines so they don't sag under the weight of all that power - and increasing the extra capacity to 130 megawatts.

That project seems to be moving forward, with a subcommittee of the state Site Evaluation Committee giving the project a conditional go-ahead on May 27. If everything else falls into place, Granite Reliable will be able to begin construction in the fall and start supplying power at the end of 2010.

Concord-based Clean Power Development had planned to build a 45-megawatt wood-burning plant in Berlin, but it downsized the plant after several studies said there would only be enough wood available for about 30 megawatts, which "coincidentally" was about the same amount of capacity on the Coos loop left after Granite Reliable was done with its work.

"I would take credit for planning it that way," joked Bill Gabler, project manager for Clean Power Development. When asked if he was getting a free ride by not having to pay for any upgrades in the Coos loop, Gabler tried not to sound too gleeful before saying, "Yes."

The smaller size of the wood plant also might mean that Clean Power Development won't have to go before the Site Evaluation Committee, although it would still need to obtain regulatory approval and financing.

"We have a lot of interest, but nobody wants to bring out the checkbook until the permits are in place," said Gabler.

After that, things get more complicated when it comes to transmission capacity.

The next company in line, Laidlaw Energy Group, which is planning to build a 66-megawatt biomass plant, also in Berlin, will require a much bigger upgrade.

Laidlaw has a deal to sell all of its power to Public Service of New Hampshire, and on May 11 signed a deal to supply hot water to Fraser Papers' Gorham paper mill. But recent studies of the region's wood supply have cast some doubt on the availability of fuel, and the company has yet to apply for a siting permit.

If that project doesn't go, the next project in the queue is a 180-megawatt wind power project proposed by Wagner Woodlands Ltd. of Lyme.

Neither Laidlaw or Wagner, or whoever comes up with the next project, could afford to bear the burden of a full upgrade itself, and it wouldn't be fair, according to everyone involved in the transmission line issue.

Instead, they hope that the mediator eventually hired by the transmission commission could broker a deal through which the cost would be fronted by ratepayers, with an assessment on each new generator, based - at least partly - on the amount of power they would generate.

Such a system was developed in California, but things are even more complicated in New Hampshire because of the uncertainty of how large an upgrade would be needed and how much power will actually be produced.

"It's uncertain who will build," said Martin Murray, a spokesman for PSNH. "There is no telling for sure which independent developer will go ahead with their project."

More complications

The other question is which ratepayers would foot the bill - just those in New Hampshire or those all over New England. The state would, of course, like to regionalize the expense, noting that an upgraded grid could deliver renewable energy to neighboring states. Massachusetts officials, however, have already gone on record saying that they can develop their own renewable power, thank you very much, and don't want to pay to bring it down from the Granite State.

At the House committee meeting there was some talk of using stimulus money to help build the project. But a quick check with the Governor's Office of Energy and Planning revealed that - for now, at least - there is no direct federal funding available for such projects. The $25 million in related stimulus money that the state received is going to some 16 programs focusing on local energy-efficiency programs.

There is federal money ($6.4 billion nationwide) available to build a "smart grid" that primarily enables consumers to adjust their energy use to periods of low energy demand and higher supply, not to truck huge amounts of renewable energy from remote places.

Private developers can apply for federally backed loan guarantees for upgrades as part of the stimulus package, but that is not the same as a federal fund for the massive subsidies needed. Congress is considering funding in the future, but current proposals are for projects larger than the one envisioned in Coos County.

As if things weren't complicated enough, on May 20, FERC gave its conceptual approval to a transmission line proposed by Hydro-Quebec, along with PSNH's parent company, Northeast Utilities, and Boston-based NSTAR.

The line would carry 1,200 megawatts of non-carbon based renewable electricity - 20 percent more than the Seabrook nuclear plant produces and dwarfing any of the projects planned in the North Country.

Of course, the project has a long way to go before it becomes a reality. FERC just approved the concept of how capital costs would be paid for - all included in one charge and not separated out - not the entire deal itself. NU and NSTAR still have to work out a deal with HQ on how much they would pay for the power.

An exact route has to be decided on as well, and the project would require regulatory approvals galore.

Still, those on the House Science, Technology and Energy Committee could not help but notice the new elephant in the room.

"If the primary purpose of this is to stop global warming, who cares where it comes from?" said Rep. James Garrity, R-Atkinson. "Who says the loop isn't the only way to go in New Hampshire? Times are changing. There are other ways to get there."

But others said it does make a difference.

"Are we here to represent Canadian workers or New Hampshire workers?" asked Rep. William Remick, R-Lancaster.

"We are not talking thousands of jobs," replied Rep. Cali-Pitts. "I take umbrage at being called un-American."

While the political rhetoric started to fly, other power plant developers took stock of the giant possibility.

Some were cautious. "It's too soon to determine the effect," said Doug Patch, an attorney for Granite Reliable, as well some other proposed wind projects that might require a transmission upgrade.

But Gabler of Clean Power expressed more concern.

"It will have a very chilling effect on renewables in the region," he said.

It shouldn't, said Murray, of PSNH. There is a good chance that the new line would follow the very same corridors of the original upgrade. And while developers couldn't use the actual line itself - it would be high-powered direct current, requiring expensive transformers to change it into alternating current that goes to people's homes - there are "synergies" that could help reduce the cost of construction of some of the upgrade, Murray said.

Besides, the law requiring renewables in New Hampshire and other states only allows a limited amount of hydropower. The requirements for wind and biomass still need to be met, and that, said Murray, is what is driving development in the North Country.

"The law could be changed," Gabler said. And he noted there are some massive wind projects proposed in Quebec that could use the line as well, and that would further cut into renewable energy production in the North Country.

The role of RGGI

There's another environmental factor to consider besides generation of renewable energy. Global warming is the other, and that is governed by a different program: the Regional Greenhouse Gas Initiative, or RGGI, whose cap-and-trade system, pushes up the cost of electricity produced by carbon-based fuel.

Thus any power from non-carbon sources - wind, solar, hydro or biomass - has a distinct advantage.

"Anytime you are bringing in 1,200 megawatts, renewable or not, it's going to lower the price a little. And anybody developing electricity is going to have to look at that and say, ‘I'm going to make less,'" said Michael Harrington, senior regulatory adviser for the New Hampshire Public Utilities Commission.

Other flies in the ointment: Natural gas prices are at a record low and the recession has cut demand.

Still, lawmakers are going to keep looking at the Coos transmission line. Just because times are tough, good companies don't abandon research, and neither should the state, said Naida Kaen, D-Rochester, chair of the Science, Technology and Energy Committee.

"We made progress, and it needs to continue as an investment in renewables, R&D," she said. "We don't want to abandon it. But this doesn't obligate us to do anything."