Promised Payments Help Sway Approval For Lake Power Line

Jul 21, 2015

An underwater power line planned for Lake Champlain has won key support from two Vermont state agencies.

The Department of Public Service – which represents ratepayers – and the Agency of Natural Resources say the 1,000 megawatt project will bring benefits to the state with minimal environmental impacts.

The project developer plans to ship hydroelectric power from Canada to southern New England. The company promises to pay the state hundreds of millions of dollars for using Vermont as its pathway to the market.

The project developer, TDI-New England, promises $720 million in ratepayer savings and direct payments to the state over the 40 year life of the project. The money includes $202 million for Lake Champlain clean up, and separate funds for habitat restoration and clean energy projects.

Chris Recchia, commissioner of the Department of Public Service, says the benefits had to be clear since the power won’t be used in Vermont.

"Knowing that Vermont was probably not going to be the major user or perhaps any user of the energy transmitted through the project we wanted to make sure that if we were hosting the project that there were clear public benefits for Vermont and this agreement really succeeds in doing that," he says.

The line would start at the Canadian border and run about 97 miles under the lake to Benson. It would then be buried underground for 57 miles to a substation in Ludlow. The agreement with the state also includes lease payments to the Agency of Transportation for the rights of way along highways.

"We wanted to make sure that if we were hosting the project that there were clear public benefits for Vermont." - Chris Recchia, commissioner of the Vermont Department of Public Service

The TDI power line is designed to supply states like Massachusetts and Connecticut that are looking to reduce their impact on climate change with cleaner energy supplies. It's what's known as a merchant project – meaning it's for commercial purposes and is not needed to make the transmission grid more robust or reliable. Company CEO Donald Jessome says because it's a merchant line, TDI has to prove its value to Vermont in order to win approval from regulators.

“And .. it became pretty clear to us – I mean it was fairly simple – we’re in Lake Champlain which is a public trust to the state, and there is a need for phosphorus clean up. So that was a a fairly easy area for us to concentrate on,” he says.

There's a boom in power line projects as developers rush to satisfy southern New England and New York's demand for cleaner energy. CEO Jessome says customers haven't signed up yet, but the market is there. For example, he says southern New England states have put out requests for proposals to secure more clean energy supplies.

"We don't have the deal in hand, but we are following all those processes very closely and we want our Vermont project to be well-positioned," he says.

The project still needs approval from the state Public Service Board and the U.S. Department of Energy. A similar project on the New York side of the lake owned by the same parent company already has regulatory approval.