Hydro One seek approval from the Ontario Energy Board (OEB) for the new
East-West Tie Transmission Line Project: Lake Superior Link.
Hydro One is seeking approval from the Ontario Energy Board (OEB) to design, build and operate the new East-West Tie Transmission Line Project. They are calling their proposed project the Lake Superior
Link.
The construction phase of the project has not yet been awarded by the Ontario Energy Board. Last fall the Minister of Energy wrote a letter to the Independent Electricity System Operator (IESO) about the cost of the plan that was submitted and asked the IESO to review all possible options to ensure customers are protected. In response, Hydro One has developed the Lake Superior Link Project which will deliver benefits to Ontario’s electricity customers.
As the owners and operators of 98% of the province’s power system, Hydro One feel they are uniquely positioned to provide an innovative and cost-effective solution to meet the needs of northwestern Ontario,
while minimizing environmental impacts. Hydro One’s plan could deliver project cost savings in excess of $100 million, and approximately $3 million in annual operation and maintenance cost savings.
For more information on Hydro One’s proposal, please visit www.HydroOne.com/LakeSuperiorLink.
I asked several questions of Hydro One representatives recently Ferio Pugliese, Executive Vice President, Hydro One “The need is certainly for increased capacity into the north and this
was an application that was made several years ago in 2012. We bid on them and came in slightly above the Valard and NextBridge project, which are in the first phase in the development of the line. Initially
we came in at $450 million and they came in at $425 million.”
“ A letter was sent in recently by the Ontario Energy Minister questioning the cost increases associated with this project which are now estimated over $700 million. We feel we could do it for around
$636 million. Operating costs would be lower as well as we have systems crews already here as we already are operating here, a $ 3 million savings benefit in terms of operating expenses each year. When we looked at that we made a application to the OEB. We have the expertise, have been committed to Ontario for 116 plus years and know this line and the territory very well, servicing it for many years. We currently have 98% of the grid in Ontario with only a few other smaller operators.”
“ We have a relationship with the communities that this line is going through including the 6 First Nations whom we have been doing business with and been associates of them for years. We certainly want to get involved in this project and can honour the agreements or improve them with a more advance equity share. Currently we are working with 2 First Nations in the Niagara Reinforcement project doing an equity share”
“ The first phase is to do the development work,economic and environment assessment. The OEB then decides who will be the constructor and the actual transmitter. Since 4 years ago there has
been escalation in the cost of materials suppliers etc. We believe we can do the project for $636 million, which is lower than Valard.”“The additional capacity is for economic growth and reliability. It
will help will future additional heavy industry. It will allow for more generation projects to tie in say with the 6 First Nations. Mining would benefit.”
“When we originally bid on the project we were a crown corporation and the OEB allowed another bidder to come on to do the development work. Two years ago we became a privately held entity and we looked again at
this project then as we knew we can produce and deliver this project cheaper and maintain it well like we do others in the province. The $100 million in savings goes right back to the ratepayer in Ontario.
The Ontario people were 100% owners of Hydro One and when the Wynne government sold off shares in a new company the ownership by the people in now 47 %.”
“Today we are looking at all costs- how we operate, how we compete and manage our assets. We feel we should be a prime provider and are now a more commercial entity where we look at how we can deliver the services more affordably. We have advocated for customers to lower Hydro rates
with a 31% reduction based on input.We are proponents of economic activity. Currently our demand curve in Ontario is flat to declining. We want to improve that with new activity and create jobs.”
“ In Thunder Bay we would buy supplies, training opportunities and offer long term ownership in the area.”
Andrew Spencer, Vice President, Transmission & Stations, Hydro One“There is price escalation because of inflation but also, in our case and our competitors, we are now based on solid built up, bottom up
engineering where some of the earlier figures four years ago were preliminary in nature. We have done more work today to understand the full scope of the project and engagement with communities. It is very
rugged terrain and a challenging place to build a transmission line. We can be less expensive as we have an optimized route that goes through Pukaskwa National Park which takes away approximately 50 km from the route.”
“We are putting in more capacity to connect North Eastern and North Western Ontario together. Think of this project as just one part of a bigger plan to help current reliability and future growth.”
“No one has been allowed to do new construction through Pukaskwa National Park so our solution in this section is to modify our existing infrastructure. There are currently two circuits that run through and
we will convert that to carry 4 circuits. The park is happy with that and given us a letter of support. It takes 10% off the cost and has a lower environmental foot print which is one of their main
considerations.”
