The Supreme Judicial Court ruled that the retroactive nature of the referendum last year violated the project developer's constitutional rights, sending it back to a lower court for further proceedings.
The court did not rule in a separate case that focuses on a lease for a 1.6-kilometre portion of the proposed power line that crosses state land.
Central Maine Power's parent company and Hydro-Québec teamed up on the project that would supply up to 1,200 megawatts of Canadian hydropower. That's enough electricity for one million homes.
Most of the proposed 233-kilometre power transmission line would be built along existing corridors, but a new 85-kilometre section was needed to reach the Canadian border.
Workers were already clearing trees and setting poles when the governor asked for work to be suspended after the referendum in November 2021. The Maine Department of Environmental Protection later suspended its permit, but that could be reversed depending on the outcome of legal proceedings.
The high court was asked to weigh in on two separate lawsuits. Developers sought to declare the referendum unconstitutional while another lawsuit focused on a lease allowing transmission lines to cross a short segment of state-owned land.
Supporters say bold projects such as this one, funded by ratepayers in Massachusetts, are necessary to battle climate change and introduce additional electricity into a region that's heavily reliant on natural gas, which can cause spikes in energy costs.
Critics say the project's environmental benefits are overstated — and that it would harm the woodlands in western Maine.
It was the second time the Supreme Judicial Court was asked to weigh in on a referendum aimed at killing the project. The first referendum proposal never made it onto the ballot after the court raised constitutional concerns.
Although the project is funded by Massachusetts ratepayers, the introduction of so much electricity to the grid would serve to stabilize or reduce electricity rates for all consumers, proponents contend.
The referendum on the project was the costliest in Maine history, topping $90 million US and underscoring deep divisions.
The high-stakes campaign put environmental and conservation groups at odds, and pitted utilities backing the project against operators of fossil fuel-powered plants that stand to lose money.