Transmission project bets on clean Canadian power in Pennsylvania

Transmission lines have been much longer and more ambitious than the 73-mile project proposed by ITC Holdings Corp.

But ITC’s line — though relatively short and largely invisible under Lake Erie — would serve as the first link between Canada and the regional power grid spanning Pennsylvania, 12 surrounding states and Washington, D.C.

Designed to move 1,000 megawatts of Canadian-produced electricity along the floor of the lake into Erie County, the project would play into the region’s power grid that is shifting to draw on more renewable energy. 

The Lake Erie project would connect Ontario’s power grid and PJM Interconnection, the Valley Forge-based operator of the regional electric grid  

The idea still has to pass the muster of state environmental regulators, who along with the U.S. Army Corps of Engineers, received a wetlands crossing permit application last week from the Michigan-based transmission developer. The project also is pending approval from Canada’s National Energy Board. 

While grid operators, along with transmission and distribution companies, are in theory agnostic to the type of fuel that is generating power, but the international transmission line would undoubtedly bring more renewable energy to PJM.

As it has pitched the project to regulators and the local communities, ITC Holdings has pointed out that the mix of fuels producing power for the Canadian grid differs greatly from that seen by PJM. While PJM receives most of the power it coordinates from coal and gas generation, the Independent Electricity System Operator in Ontario relies more on wind power and hydropower as sources of energy. 

Meanwhile, coal generation in Ontario is close to being phased out completely. 

ITC’s idea isn’t the only proposal to bring Canada’s renewable power south to the states. Minnesota Power Co.’s Great Northern Transmission Line would carry hydropower generated by Manitoba Hydro across international lines. Pending approvals, it could begin construction by the end of this year.

If the project is put into service by 2019 — as the company hopes — it would arrive as Pennsylvania carries out a plan to cut by 33 percent carbon emissions from the state’s power sector by 2030 from 2012 levels. The U.S. Environmental Protection Agency’s Clean Power Plan, a federal rule published last October, gives states the option to submit their own plan, and Pennsylvania officials have said they will draw one up by sometime this summer.

Combined with persistently low natural gas prices, the federal rule is widely expected to affect the coal-fired power plants in PJM’s territory.

Three plants in southwestern Pennsylvania have already closed, in part due to a previous EPA rule on mercury emissions: Elrama power plant in Washington County in June 2012; Mitchell power plant in Washington County in October 2013; and Hatfield’s Ferry in Greene County in October 2013. 

With losses such as these, ITC Holdings could help fill the gap without building a new plant. The line’s 1,000-megawatt capacity is roughly the size of a large natural gas-fired power plant. 

Electric utilities would also have another source of renewable energy to meet state mandates requiring that 18 percent of utility power sales by 2021 come from alternative or renewable sources. 

“It can facilitate the export of clean energy from Ontario to PJM — and vice versa — to address potential environmental regulations and Renewable Portfolio Standard requirements in the U.S. and to help achieve policy goals in Ontario,” said ITC spokesman Robert Doetsch. 

The power line would dive underwater off the coast near Nanticoke, Ontario, travel roughly 73 miles on the floor of the lake and emerge in Conneaut Township.

The stream crossing permit from the DEP and Army Corps is just the latest of the state, federal and provincial approvals for a project that has been in the works since 2011.  

The Federal Energy Regulatory Commission, which governs the operation of the U.S. power grid, allowed the company in 2014 to begin formally reaching out to companies interested in putting power on the line.

For nine weeks last summer, the company put out an open call for generating companies interested in feeding the line. ITC said it’s now in negotiations with interested parties to draw up definitive agreements on rates, terms and conditions. 

Yet it still faces regulatory hurdles. A 15-month review is underway by Canadian energy regulators who have authority to approve the roughly 30-mile section that falls under the country’s purview. Canadian regulators will conduct their own environmental assessment and make a determination no later than January 2017. 

ITC said it expects approvals to come in the second quarter of 2017, and construction would begin shortly thereafter. It could be fully operational by 2019. 

“We remain cautiously optimistic about the prospects of this project,” Mr. Doetsch said.

Daniel Moore:, 412-263-2743 and Twitter @PGdanielmoore.

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