The Maine Supreme Judicial Court on Tuesday ruled that Central Maine Power Co. has a valid lease to cross less than a mile of the state’s public lands in order to build a $1 billion electricity transmission line.

The ruling overturns a 2021 lower court decision in which Superior Court Justice Michaela Murphy ruled that the Maine Bureau of Public Lands did not have the authority to lease public reserve lands to CMP and NECEC Transmission LLC. Both companies are affiliates of Avangrid Inc.

The new decision, however, doesn’t allow NECEC to resume construction on the 145-mile project.

A key question was whether the lease, granted in 2014 and updated in 2020, was issued without first determining if the project would substantially alter the swath of land. Notably, the two public land parcels, Johnson Mountain Township and West Forks Plantation, already are crossed by a small CMP power line, built in 1963 and known as the Jackman Tie Line. In the high court’s decision, the justices noted that line and other existing uses for the land.

“Given the uses, physical characteristics, and essential purposes of the Johnson Mountain and West Forks Plantation tracts,” they wrote, “we see no reasonable basis for deciding that a second utility transmission line occupying 2.6% of the combined tracts could significantly alter the physical characteristics of so much of the remaining 97.4% that the multiple-use purposes for which the tracts are held would be frustrated.”

In August, the Maine Supreme Judicial Court ruled that a voter-approved law blocking the project, known as Question 1, would be unconstitutional if enough work on the transmission line had already been completed. But the court sent the case back to another judge for a trial at the Business and Consumer Court, now set for April. That issue revolves around whether the NECEC project had established so-called vested rights before the statewide referendum was held.

Avangrid maintained that the new voter-approved law is unconstitutional and deprives the company of its vested rights to finish the project after receiving permits, clearing more than 124 miles of right-of-way, erecting more than 120 steel towers and spending $450 million on construction – nearly half of the corridor’s estimated cost. Opponents said Avangrid took a risk and was well aware of the legal challenges.

The project is meant to carry electricity from Quebec to Massachusetts and has become one of Maine’s most hotly contested environmental fights in decades.

Following the decision by the Supreme Judicial Court, which sits as the Law Court when the justices hear an appeal, Avangrid’s general counsel released a statement saying the company was pleased with the ruling and is determining its next steps.

“Today’s ruling by the Law Court is yet another step in the right direction for Maine’s renewable energy future,” said Scott Mahoney. “The serious need for the NECEC project to reduce our reliance on fossil fuels, combat climate change, and lower energy prices remains unchanged. For the past three years, despite funding by fossil fuel opponents, every regulatory body at the local, state and federal level has thoroughly reviewed (the project) and all agree the NECEC is beneficial for Mainers.”

A Washington, D.C., research firm that follows the case for investors said the decision could be pivotal for the future of the project.

“Today’s ruling represents the second significant legal ‘win’ in the last three months for the NECEC project,” said Timothy Fox, vice president at ClearView Energy Partners. “The Maine Supreme Judicial Court has effectively brought the transmission line back to life. While the legal challenge regarding last year’s Question 1 continues at the lower Business and Consumer Court, we think CMP could overcome the remaining judicial and regulatory hurdles and resume construction as early as mid-2023.”

Project opponents, however, are pinning their hopes on the Question 1 challenge.

“We are extremely disappointed with the decision that was made today,” said Tom Saviello, a former state legislator and lead organizer for Question 1. “In our opinion, the Maine Constitution clearly places a safeguard protecting our public lands from CMP’s development of a transmission line that provides little to no benefit to Maine consumers. That safeguard is a two-thirds vote of the duly elected members of the Maine Legislature.”

Saviello was referring to a requirement in the 2021 law that any new “high-impact electric transmission line” be approved by the Legislature.

Tuesday’s public land decision came in the case called Russell Black v. Bureau of Parks and Lands. In their written opinion, five justices said they answered three broad questions: whether the U.S. Constitution permits a citizens’ initiative to retroactively invalidate the lease at issue; what procedure, if any, the public-lands provision of the Maine Constitution and its implementing statutes required the bureau to follow before leasing the public reserved lands; and whether the bureau’s lease of the public reserved lands exceeded the bureau’s constitutional or statutory leasing authority.

While the decision keeps the project alive and is good news for the developers, it still faces other challenges. Among them: The project is being paid for by Massachusetts utilities and their customers, part of a massive effort to shift that state to clean energy and to fight climate change. Years of delay already have cost NECEC millions of dollars in contract extensions. It’s not clear how long those accommodations will continue in Massachusetts, as both sides prepare for April’s trial.

And that won’t be the last word, Saviello noted. Regardless of the outcome, the decision will be appealed to the Law Court.

“So maybe there will be a final decision by next year at this time,” he said.

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