IF HYDRO One says it can build a new high-voltage power line along Lake Superior for $100 million less than the current price-tag, then by all means, let’s take a look.
Let’s just not bank on it yet. The $777-million price-tag everyone is familiar with, put forward by NextBridge Infrastructure, does seem sky-high. But it comes after five years of intense development work and crucial negotiations with Indigenous groups and affected landowners.
A lot of smart people on both sides put a lot of thought into the NextBridge proposal. In the end, a consortium of Indigenous groups not only signed on, they acquired a 20-per-cent stake in the project.
That was a major breakthrough. And it’s lots of peace of mind to throw away just because a competitive bidder claims to be able to shave the cost by 10 per cent or so.
The main reason Hydro One says it can build the new 230-kV line more cheaply is because it will use its existing hydro corridor extending between Thunder Bay and Wawa.
This seems a bit odd, since the province and other experts have maintained that separate corridors are the way to go, in terms of safety and long-term reliability.
NextBridge’s proposed route for the new line is longer by 50 kilometres, and therefore more expensive, because it would indeed result in a separate corridor, which would ultimately go outside the border of Pukaskwa National Park.
Parks Canada has made it clear that it already has a hydro corridor running through Pukaskwa and doesn’t want another one.
Hydro One says the new high-voltage line it would install could run along the existing corridor in Pukaskwa, too. All it would have to do is upgrade its tower infrastructure. And Hydro One’s plan wouldn’t require cutting down as many trees.
The wrinkle there is that Parks Canada has not said whether or not will permit the upgrade, or whether it likes the idea of having two high-voltage lines buzzing through its wilderness, even if they are on the same corridor.
There are other wrinkles. In order to get the new line in service by 2021 (a year later than NextBridge’s plan, and the date the province asked for), Hydro One would have to make use of NextBridge’s existing environmental assessment data it prepared for the project.
NextBridge maintains that not all of its work is in the public domain and, in any case, the two companies are hardly on friendly terms at the moment: NextBridge formally requested Tuesday that the Ontario Energy Board dismiss Hydro One’s bid altogether, calling it “not achievable.”
Yet another wrinkle: In order to meet its plan to have the new line in service by 2021, Hydro One would presumably have to fast-track negotiations with affected First Nations and property owners. NextBridge said that delicate process took four years, although, in fairness, it was facing the task of finding a route for a second hydro corridor.
Fort William First Nation Chief Peter Collins said the band is happy with the equity agreement it reached with NextBridge and was troubled by the prospect of having to start all over again with Hydro One, should the latter get the bid to build the new line.
Right or wrong, NextBridge has been viewed by many as the proponent most likely positioned to build and own the new line in partnership with the First Nation consortium, despite the fact the OEB hasn’t formally approved its plan.
NextBridge says it has spent $40 million in pre-development work. If it doesn’t get the nod to build the line, that’s money down the toilet and presumably it will fight like heck, through the courts if necessary, for compensation.
Since ratepayers are ultimately on the hook for the new line’s costs, having to pay back $40 million would take a bit out of the $100 million in savings Hydro One claims it can bring to the project.
In the end, these type of projects rarely go smoothly or come in cheap.