Hydro-Quebec gets behind proposed transmission line to US

Jul 12, 2010 - Sylvain Larocque - The Associated Press

Hydro-Quebec is supporting the construction of a $2-billion cross-border transmission line that will run into the United States and help power New York City.

In documents presented this May to the Federal Energy Regulatory Commission, Hydro's American affiliate declared the project met U.S. guidelines.

Hydro had initially been hesitant to express its support for the project, saying only that it was looking for new business opportunities.

Newfoundland and Labrador's state energy company, Nalcor, is also behind the project. The line would run from Canada under Lake Champlain, into the eastern U.S.

For Nalcor, the lines would allow it to export electricity to the U.S. from a proposed dam to be built at Lower Churchill Falls.

"Anything that increases competition and market access we see favourably," said Ariane Connor, a Hydro-Quebec spokesperson.

The project's developer, Toronto firm Transmission Developers, has asked the FERC for the authorization to offer 30-year contracts for use of 75 per cent of the line.

It says such long-term contracts will help it secure the funding necessary to get the project off the ground.

The Transmission Developers request was granted earlier this month, despite protests from independent energy producers in New York state.

While Nalcor has made no secret of its desire to reach a deal with the Toronto firm, Connor wouldn't comment about Hydro-Quebec's intentions.

The proposed transmission line, known as the Champlain Hudson Power Express, would have a 2,000-megawatt capacity.

It would carry electricity from a power station just south of Montreal, run alongside the Richelieu River, and under both Lake Champlain and the Hudson River, before ending up in New York City.

Public consultations on the project will be held throughout the month in New York state.

Hydro-Quebec's TransEnergie subsidiary will shoulder between $400 million and $500 million of the final cost.

U.S. investment firm Blackstone is slated to inject a further $800 million.

Transmission Developers is also hoping to qualify for a $3-billion loan guarantee from Washington.

They hope to have the Power Express up and running by 2015.