A company seeking to build a high-voltage power line beneath Lake Champlain applied for a state permit Tuesday.
TDI New England is asking the Public Service Board for a certificate of public good to build a 154-mile underground and underwater power line that would carry hydroelectric and wind power generated in Canada to metropolitan energy markets.
The company, which is a subsidiary of a Wall Street financial services group, also said it would contribute nearly $300 million to the state for environmental and other purposes. The $1.2 billion project is expected to be completed by 2019, company officials said.
TDI says it has purchased enough private property to build the project. The company is also seeking permits from federal regulators.
The 1,000 megawatt transmission line is the first of its size to be reviewed for environmental impact on the lake, a state official said. The transmission line would pass under nearly 100 miles of Lake Champlain to a proposed converter station in Ludlow, crossing wetlands and streams along the way.
The company, a subsidiary of financial firm Blackstone Group, which manages more than $200 billion in assets, is offering the state a benefits package of $298 million over the project’s 40-year lifespan.
Of that, $120 million would go into a fund to aid in Lake Champlain phosphorus cleanup, habitat restoration and recreational improvements.
The company is also paying the state’s transmission utility, Vermont Electric Power Co., or VELCO, $136 million. The state’s electric utilities, which own VELCO, would receive the money based on how much power they provide to customers. The money is expected to be used to reduce electric rates, a state official said.
Tom Dunn, CEO and president of VELCO, said the project could provide benefits to Vermont and the region, but state regulators will decide whether it is of public benefit. He said the money will not affect VELCO’s review of the merits of the project.
“We’re pretty much acting as a conduit for the money,” Dunn said. “We are not going to compromise the reliability of the grid for this project or any other project.”
TDI New England would also contribute $40 million to the Clean Energy Development Fund. The company says the project will generate millions of dollars in property tax and sales tax revenue, create hundreds of construction jobs, reduce greenhouse gas emission and lower electricity prices.
TDI New England Chief Executive Officer Donald Jessome said the project and associated benefits will be good for Vermont.
“We’re asking the state of Vermont to host a major infrastructure project,” Jessome said. “We will be running through Lake Champlain. That water body is a public trust and we certainly understand that not every project will get permitted.”
The company will not own the power running through the lines. Power suppliers in Quebec could contract with Vermont utilities to sell and deliver the power, he said. No long-term power purchase agreements have been made.
Department of Public Service Commissioner Chris Recchia said the state is just starting to review the project. He said while the state will not likely receive any of the power from the project, the benefits package addresses an appropriate need.
“We won’t be getting any power from this project. Our utilities don’t really need it,” Recchia said. “So it’s really important that if Vermont does host a project like this, that we have a significant benefit.”
Anbaric pursues project in Maine
The developer of another transition line project in Vermont is moving forward on a project in Maine.
Massachusetts-based Anbaric is partnering with National Grid, a London-based power supplier, to bring up to 3,000 megawatts of power to the region, the two companies announced Tuesday. For now, Anbaric will focus on a 1,000 MW transmission project in Maine. The company plans to use public money to finance the project.
The transmission company developed what it calls a “winning” combination of wind power and on-demand hydropower. The company eventually hopes to bring utility-scale wind power from New York and hydropower from Quebec under Lake Champlain to a substation in Burlington. Anbaric has not applied for a state permit.
The project does not have the money it needs to go forward. Unlike TDI New England, Anbaric is planning to use ratepayer funds if the six New England states can reach an agreement on how to share the cost of transmission line projects.
The regional initiative came to a halt this summer when the Massachusetts Legislature failed to pass a bill that would require electric utilities to purchase long-term contracts for renewable power.
The proposal would have socialized the costs of infrastructure upgrades through electric rates. The anticipated projects are estimated to cost billions of dollars.
Gov. Peter Shumlin has questioned whether transmission projects would leave the state with avoidable costs. This comes after VELCO warned that several of the transmission line projects proposed in the region have been underestimated.
The region’s dependence on natural gas and limited pipeline capacity have nudged electricity prices up at a time when large power generators, including Vermont Yankee, are scheduled to go offline. States are also looking for renewable sources of power to meet renewable energy targets.
Despite setbacks in the effort to collaborate as a region on infrastructure development, the region’s grid operator has made it clear that reliability and economic concerns are front and foremost.
As Anbaric’s CEO Ed Krapels put it, “The need to do something hasn’t gone away.”
Stan Blazewicz, vice president of U.S. business development for National Grid, said the region will need to find more renewable power to meet escalating renewable portfolio standards. He said that means looking for wind power backed up with constant hydropower.
“Frankly, we’re just simply running out of the low-hanging fruit,” he said.
He said the partnership would allow Anbaric to use its project development experience to begin projects and National Grid could use its engineering and operating skills to build and maintain the line.