A report from Canada’s National Energy Board (NEB) recommending issuance of a certificate of public convenience and necessity for the ITC Lake Erie Connector transmission line is before Canada’s Governor in Council for final approval of a certificate, with a decision expected by April 19, according to ITC Holdings.
As noted in its report, the NEB has imposed 42 conditions – to be attached to the certificate – that the NEB considers are necessary or desirable in the public interest.
The proposed 1,000 MW, bi-directional, high-voltage direct current (HVDC) underwater transmission line would provide the first direct link between the markets of the Ontario Independent Electricity System Operator (IESO) and PJM Interconnection, ITC said in its Jan. 20 statement.
The proposed +/- 320-kV, approximately 73-mile line would interconnect with converter stations located in Erie, Pa., and Nanticoke, Ontario. A 345-kV alternating current (AC) underground transmission line would connect the Erie converter station to Penelec’s existing Erie West substation, while a 500-kV AC line would tie the Nanticoke converter station to Hydro One’s Nanticoke substation, ITC added. Most of the line would be buried beneath Lake Erie or underground using existing roadway rights of way, the company said.
According to the NEB report, the project has an estimated capital cost of US$1bn, and the estimated cost of construction for the Canadian portion of the project is about C$543.5m. The project is being developed as a merchant transmission line that would be financially supported by commitments from transmission customers who would purchase capacity on the line, the NEB said.
According to ITC Lake Erie, the project has a minimum 30-year design life, and is bi-directional in that it would have the ability to transmit power from Canada to the United States, and vice versa, the NEB said.
Describing the project, the NEB noted that the length of the buried AC line in Canada is 1.3 kilometers, and that the Canadian HVDC converter station – the Haldimand converter station – would be located in Ontario, near a point of interconnection in Haldimand County, close to the Nanticoke transformer station switchyard. The Haldimand converter station would convert 500-kV AC power to ±320-kV direct current (DC) power or vice versa. The length of the Canadian portion of the HVDC transmission line is 48.1 kilometers, consisting of 1.3 kilometers on land, and 46.8 kilometers under the lakebed, the NEB added.
If the project is approved, ITC Lake Erie has indicated that construction of the facilities would begin in 2Q18, and the project’s anticipated in-service date is in 4Q20, the NEB said.
The NEB said that it finds that the project would improve power system reliability and trade efficiency between the IESO and PJM. The NEB also said that ITC Lake Erie has demonstrated that the project is responding to market need and that sufficient benefits to the power system and economic efficiency exist to demonstrate the need for the project.
The NEB further noted that it is satisfied that a direct interconnection between Ontario and PJM creates sufficient value for customers nd would promote market efficiencies by decreasing transmission costs and capitalizing on price differentials between the two markets.
Noting ITC Lake Erie’s commitment that the project would not be built unless sufficient transmission contracts are signed to cover the project’s costs and provide a reasonable return to ITC Lake Erie, the NEB said that it imposes “Certificate Condition 29,” which requires ITC Lake Erie to provide confirmation that it has entered into the necessary transmission contracts ahead of the start of construction.
The NEB also said that it is satisfied that the system impact assessment, conducted by the IESO, demonstrates that the project would not have a significant impact on the integrated power system in Ontario and on the reliability of the bulk electric system. The NEB added that the matter of reliability of the transmission system is a paramount concern, and conditions are necessary. The NEB noted that it is imposing “Certificate Condition 21,” which requires ITC Lake Erie to file a report confirming that the design of the facilities, construction plan, and planned operations comply with its related submissions.
Discussing potential impacts on Aboriginal interests, the NEB said, for instance, that Curve Lake First Nation’s concerns about ancestral remains would be addressed through the NEB imposing “Certificate Condition 24,” which requires ITC Lake Erie to file confirmation that it has obtained a compliance letter from the relevant provincial authorities confirming that all applicable provincial requirements regarding archaeological and heritage resources have been met for both the terrestrial and in-water portions of the project, at least 30 days before the start of construction.
Among other things, the NEB said that sufficient standard mitigation measures have been identified to mitigate most of the potential adverse environmental effects identified, such as a change in fish abundance and loss of fish habitat. To ensure that all standard and site-specific mitigation measures are appropriate and would be implemented according to their intent, the NEB said that it has imposed certain conditions, including “Certificate Condition 20,” which requires Lake Erie to file an updated, project-specific environmental protection plan to communicate all environmental protection procedures and mitigation measures to employees, contractors and regulators.
The company said in its statement that it has received approval of a Presidential Permit from the U.S. Department of Energy, and that remaining milestones for the project this year include receiving approval from the U.S. Army Corps of Engineers and Pennsylvania Department of Environmental Protection (DEP) in a joint application; completing project cost refinements; and securing favorable transmission service agreements with prospective counterparties, after which ITC would proceed with construction.
According to the report, ITC Lake Erie has said that those authorizations from the Army Corps and DEP would be received by 2Q17.
ITC said in its statement that it has signed service agreements with the manufacturers of the converter stations and the submarine cable, and secured almost all of the land necessary for the terrestrial cable route, converter stations, and construction laydown areas.
ITC is a Fortis (NYSE:FTS) company.