Power Surge: Vermont Sees Boom In Transmission Proposals

May 5, 2014

Developers of high voltage power lines are starting to stake out routes in Vermont to import electricity from Canada to markets in southern New England.

The interest in Vermont as a transmission corridor is unprecedented. State and utility officials are approaching the projects cautiously, but they say they could represent a unique opportunity to win financial benefits for the state with minimum environmental cost.

New England’s governors want cleaner and more diversified power sources for several reasons: older, dirtier plants are going off line, the region is committed to reducing greenhouse gases, and utilities rely heavily on natural gas to generate electricity. When gas supplies are tight in the winter, the fuel goes first to heat homes, not produce power.

“That means customers in the end pay for much more expensive sources of power that have to be utilized to maintain system reliability,” says Kerrick Johnson, vice president of the Vermont Electric Power Corporation, the state’s transmission utility.

Johnson says as states look for other power sources, Vermont is in a geographic sweet spot.

“When it comes to movement of electricity – movement of significant amounts of hydropower, Vermont finds itself between supply to the north and demand to the south,” he says. “That means there is significant interest in construction of electric transmission to move the power from the north to the south.”

If the lines run through Vermont, they would have to connect to the VELCO grid, Johnson says. And for that privilege, he says, the state and its ratepayers should be well compensated. Johnson says VELCO’s ownership structure means the profits it makes from these projects would flow back to consumers.

"When it comes to movement of electricity, movement of significant amounts of hydropower, Vermont finds itself between supply to the north and demand to the south." - Kerrick Johnson, VELCO

“If you’re going to build in Vermont – through our right of way – then obviously it’s going to have to be consistent with our understanding and practice with regards to Vermont’s working landscape,” he says. “And two, what’s the value that can and should be expected to be paid for being located in Vermont?”

The various transmission projects are still in the early planning stages. They include a line proposed by Albany, N.Y.-based Transmission Developers Inc. to carry 1,000 megawatts from Canada south under Lake Champlain. TDI says the line would surface at the southern end of the lake and then would run underground to connect to the VELCO grid in Ludlow.

Another power line developer, Anbaric Transmission, also wants to build a 400 megawatt line under Lake Champlain to carry electricity from wind and hydro projects in New York State.

And just last week, Northeast Utilities – New England’s largest power company – filed proposals to connect to the regional grid in Vermont. Northeast Utilities spokesman Frank Poirot says these projects are still being planned. He says the amount of electricity they would carry – and from what source –have yet to be determined.

“In our view, they’re designed to bring energy and economic value to our customers,” he says.

Poirot says the potential Vermont power lines are not a substitute for the utility’s controversial proposal in New Hampshire called the Northern Pass. That project is designed to import 1,200 megawatts from Hydro Quebec.

“The Northern Pass project remains the best, and the most cost-effective, project to bring clean energy into the New England region,” he says.

In Vermont, the project that’s most advanced is the plan to submerge the 1,000 megawatt line under Lake Champlain. Transmission Developers Inc. says the $1.2 billion power line could save Vermont $100 million over ten years in reduced power costs. And the company has sweetened is proposal by pledging to set aside a substantial amount of money for a Lake Champlain clean-up fund.

The same company is developing a power line on the New York side of the lake that would run down the Hudson Valley to the New York City area.

TDI officials are now making the rounds of select board and planning commissions in Vermont towns where the line would be located. Project Manager Josh Bagnato recently briefed the Benson select board and says his message was that the line will offer significant tax revenue with minimal environmental impact. The company plans to bury the line under town or state road rights of way. He says the fact the line will be under water or underground is key to public acceptance.

"There will be challenges, valid concerns that will have to be addressed, but I do think that having it buried is a step in having it accepted by Vermont,” he says. “And then, of course, all the benefits the state will receive.”

"Whether this is underground, over water, overhead, whatever, there is no advantage to simply being a corridor unless you get something out of it." - Richard Saudek, former utility regulator

The state already hosts large power lines from Canada. Back in the 1980s, Dick Saudek was Vermont’s top utility regulator and helped negotiate a deal with Hydro-Quebec for a high-voltage line in Essex County. He says Vermont should demand significant savings to serve as a transmission corridor.

“Whether this is underground, over water, overhead, whatever, there is no advantage to simply being a corridor unless you get something out of it,” Saudek says.

Officials in the Shumlin Administration say that’s exactly what they’re looking for: how to maximize the value for Vermont from any transmission project that runs through the state.