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Wind Power Play

by Deirdre Gregg, Business Journal staff writer
Puget Sound Business Journal, July 16, 2004

Utility envisions cross-Strait power line

In a few years, breezes blowing on Vancouver Island could be turning ceiling fans in Western Washington.

Vancouver, British Columbia-based Sea Breeze Power Corp. wants to run transmission lines below the waters of the Strait of Juan de Fuca. Sea Breeze, which is developing a wind-power farm on Vancouver Island, wants the lines to carry its electricity, along with energy from other utilities, from Victoria, British Columbia, to Port Angeles, Wash.

Paul Manson, Sea Breeze president, says the utility sees the power lines as a way to transmit "quite vast amounts of renewable energy" from Vancouver Island.

"But the line from Victoria to Port Angeles is proving itself to be very much a stand-alone project," he said. "It's thoroughly justified apart from renewable development on Vancouver."

Others are not so sure. Some wonder whether the line is economically feasible, and whether investors and lenders will be patient with a lengthy permitting process. There are also technical questions about how the new lines might hook into the Bonneville Power Administration's grid.

Sea Breeze is currently in the final stages of permitting for its Knob Hill wind farm on the northern tip of Vancouver Island. The facility, northwest of Port Hardy, will probably have a capacity between 300 megawatts and 350 megawatts, although Sea Breeze will initially install only 33 wind turbines.

Meanwhile, Sea Breeze this spring formed a joint venture, Sea Breeze Pacific Regional Transmission System Inc., with Boundless Energy LLC of York Harbor, Maine, a company that recently won a contract to build underwater power lines to Long Island, N.Y.

The joint venture on June 14 asked BPA to examine how its proposed transmission line would fit into the Washington power grid.

Sea Breeze plans to eventually build three power lines capable of carrying 330 megawatts each. Each rubberized cable will cost about $100 million. Sea Breeze expects to complete the first line in 2007, and will add the others depending on demand.

Sea Breeze is also considering building a 1,200-megawatt transmission line from Vancouver Island to the British Columbia mainland.

If all three legs of the transmission line to Port Angeles were built, the lines could carry a lot of power.

On average, one megawatt is enough to power 625 homes, said Ed Mosey, the BPA's chief press officer. A 990-megawatt line could carry enough electricity to power more than 80 percent of the homes in King County, and could carry almost all the power produced by the Bonneville Dam.

The new power lines would also dramatically increase the transmission capacity between Washington and British Columbia.

Power is now traded through a large intertie at the border near Blaine and smaller one north of Spokane. Manson said a 990-megawatt transmission path would increase capacity by about 30 percent to 40 percent, and alleviate congestion at the Blaine intertie, allowing electricity to move more freely.

Tony Duggleby, chief operating officer of Sea Breeze, said when Puget Sound Energy recently put out a request for proposals for wind energy, Sea Breeze lost the contract "because we couldn't get power across the Blaine intertie in an economic fashion."

"Congestion on the transmission lines makes it impossible to transfer energy," he said. "Many times during the day the Blaine intertie is limited out."

In addition to providing an avenue to export power to the United States, "our proposal eliminates the need for new power lines to go into the Olympic Peninsula," Duggleby said.

BPA has been looking for ways to avoid new construction of transmission lines by trying to manage demand.

"There is a need, and a deficiency, in the transmission system, but it's not critical," said Dennis Bickford, general manager for the Clallam County Public Utility District. "BPA has been experimenting with nonconstruction alternatives, and if this project went forward, it would relieve those constraints."

But Sea Breeze is looking beyond the Peninsula. Duggleby said he thinks Sea Breeze and other utilities can sell power as far south as Tacoma, although he won't know if that's feasible until BPA completes its analysis. American utilities will also be able to bid for space on the line to sell power north to Vancouver Island.

"We'll find out what kind of appetite there is when we have an open season this fall," Duggleby said.

If there is enough interest from utilities, Sea Breeze will move ahead with the permitting process, which will include filing an application with the Federal Energy Regulatory Commission, applying for a presidential permit to build the line and eventually producing an environmental impact statement.

Manson said Sea Breeze's partnership with Boundless Energy, which has a lot of experience in the field, is noteworthy. Boundless Energy is part of the Neptune Regional Transmission System, a consortium that recently won a contract from the Long Island Power Authority to run underwater transmission lines from Sayreville, N.J., to Long Island.

Sea Breeze is now looking for additional development and equity partners to join it in the project, Manson said.

The BPA's Mosey said added capacity could be beneficial, but it's hard to say if the project could be economically feasible.

"It's always useful to have plenty of transmission," he said. "The question is really for the developer: Would there be sufficient demand to support the investment?"

Power grid expert Bill Arrington said permitting questions can make it hard to get financing.

"Getting permits for transmission lines is a long, arduous process, and there's no guarantee you'll get the permit in the end," said Arrington, who is president and COO of Irvine, Calif.-based Composite Technology Corp., which makes technologies for transmission lines, towers and poles.

"There are not many financial institutions who are willing to stand by and allow a company to go through money without knowing they'll get a project at the end."

That said, he thinks there are a lot of opportunities for cross-border generation and transmission.

"Especially as the BPA gets more stressed due to reduced water supply and hydro conditions, having cross-border sources helps a lot," Arrington said.

Newer transmission systems also can save a lot of money, he said: "Congestion costs in the United States are billions of dollars a year," Arrington said.

Stephanie Buffum, executive director of the Friday Harbor-based Friends of the San Juans, said environmental concerns might include whether transmission lines affect whales and whether construction affects fish.

She said this project is one of several wire or pipeline projects being considered.

"There's increased reliance on underwater corridors at a magnitude we have never seen before," she said. "We need to look at what are the impacts to the landscape once we develop all these, cumulatively."

Deirdre Gregg
Wind Power Play
Puget Sound Business Journal, July 16, 2004

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