If the project, the New England Clean Power Link, is approved by federal, regional and state regulators, 100 miles of the direct current line would be laid underneath Lake Champlain starting from the Canadian border area.
The remaining 50-mile line would be buried underground and would run from Lake Champlain across southern Vermont to the east through Rutland, to VELCO’s Coolidge substation in Cavendish. From there, the electricity would likely be transmitted to the Vermont Yankee substation in Vernon and to points south.
Transmission Developers Inc., doing business as TDI New England, proposes to spend $1.2 billion to create the first “merchant” transmission line project in Vermont. The company would pay for the line and contract with utilities to recoup its investment. TDI is a subsidiary of Blackstone Group, a financial services firm.
Don Jessome, the president of TDI, said that the New England governors’ carbon dioxide reduction targets and the closing of Vermont Yankee in 2014 created an opportunity for a hydro transmission project of this scale.
“We have been following closely the last several Eastern Canadian premier and New England governors conferences in Quebec City where they discussed how to integrate more Canadian hydro into the market,” Jessome said. “We were interested in figuring out how we could be helpful. When Vermont Yankee announced it was shutting down that was the tipping point. We saw we could integrate a large scale project into the VELCO system.”
Jessome says the company’s objective is to transmit 1,000 MW, or enough power for 1 million homes to a 30,000 MW market.
Two six-inch cables would transmit the direct current power, acting as a kind of an expressway for hydropower from remote areas of northern Canada to high voltage lines that travel to Boston and New York. The power would come from Hydro-Quebec or Nalcor Energy in Newfoundland and Labrador.
VELCO, the “incumbent” high voltage transmission company in Vermont, would be obliged to move the power from the New England Clean Power Link or any other merchant transmission project that is built in the state, according to Kerrick Johnson, a spokesman for VELCO.
“This is the first [merchant transmission line proposal], and I suspect there will be others,” Johnson said. “There’s supply to north and people to south and Vermont is located in the middle. It is part of a regional picture with most of the grid reliability investment in transmission.”
Johnson said there could be an opportunity for a VELCO investment in the project that could result in power rate “suppression” for Vermonters.
“Our task is to work with ISO-New England to ensure system reliability as well as seek to identify areas where we can create value for VELCO and for our distributed utility owners in Vermont,” Johnson said. “We want to ensure if this project is built that it’s done consistent with Vermont values.”
TDI made the plan public on Thursday. The company has asked ISO-New England, the regional electrical grid operator, for an “interconnection” study to determine whether the power from Canada would enhance power reliability for the region. TDI has also made an “interconnection request” with Hydro-Quebec TransEnergie.
State and federal permits would be filed next year. Construction is slated for completion in 2019. Jessome anticipates the regulatory process will take two to three years.
TDI is also obtaining permits for a power line that also runs beneath Lake Champlain on the New York state side of the lake.
Jessome says the New England Clean Power Link project is similar to the Champlain-Hudson Power Express, which is in the permitting process. The company hopes to break ground on the New York project next year.
TDI would use existing rights of way, including state highways, for the line, which would be buried to minimize the aesthetic impact.
“On the Vermont side we are extremely confident it can be done with minimal impact to the environment,” Jessome said.
Most importantly, he said, the project will reduce greenhouse gases that are contributing to climate change.
Chris Recchia, the commissioner of the Department of Public Service, said the power link project could help to diversify power and “put pressure on prices.” In order to make their money back, Blackstone needs to transmit power competitively, Recchia said, and in a scenario in which New England has several sources of electricity, he said, “no utility could hold the region hostage.”
Recchia said Vermont and other New England states are discussing an RFP style process to encourage companies to make competitive power distribution proposals that could benefit the whole region.
If constructed, the so-called New England Clean Power Link could also obviate the need for the highly controversial Northern Pass project that has been proposed for the remotest area of the White Mountains in New Hampshire and has drawn the ire of conservationists and the general public.
In a statement, the Conservation Law Foundation said the New England Clean Power Link is “promising,” because it offers a cost-effective alternative to the proposed Northern Pass project, which relies on new overhead towers and transmission lines.
Sandy Levine, an attorney for the CLF office in Montpelier, said her organization will be assessing the impact of the project on Lake Champlain, greenhouse gas emissions and local renewable power generation.
“We want to make sure power that would come through this transmission line replaces older fossil fuel generation and not take the place of other renewable supplies,” Levine said. “We need to make sure it advances the transfer of the regional energy supply in a way that makes it cleaner.”
Levine said the Conservation Law Foundation is encouraged that TDI takes environmental mitigation seriously.
As part of the Champlain-Hudson Express project, TDI will invest $117 million in a Lake Champlain clean up fund. Levine said a similar fund could be created on the Vermont side.
Editor’s note: This story was updated at 5:51 a.m. Nov. 1.
Correction: The substation is in Cavendish, not Ludlow, as originally reported.