THUNDER BAY – The Ontario Energy Board is asking two players looking to a build a 400-kilometre, east-west transmission line through Northwestern Ontario to do a little more homework.
The regulatory board on Thursday announced it wanted both Hydro One and NextBridge to deliver a not-to-exceed price for the Lake Superior Link/East-West Tie project by Jan. 31 before it will issue a decision and an order.
In the report the OEB said the risks from the two applications are disproportionately placed upon ratepayers and it wants to limit those risks to the consumer.
“Hydro One has submitted a not-to-exceed prices with a cost-escalation condition linked to environmental approvals. NextBridge has chosen not to submit and NTE price against the backdrop of its escalating construction costs,” the report’s author writes.
“In order to compare the applications on a level playing field and to mitigate ratepayer risk, the OEB will allow … NextBridge and Hydro One to file an NTE price based on OEB-stipulated conditions on Jan. 31, 2019.”
The energy board said this should be the final step before it decides who gets to build the transmission line between Thunder Bay and Wawa, Ont.
The project has officially been in the works since 2011. In 2013 NextBridge was given the go-ahead to start on the development work, given a budget of $22.4 million. However, that designation did not automatically hand the contract to the company.
NextBridge estimates construction costs at $737 million, plus or minus 10 per cent, a range between $663 million and $810 million. The $737 million cost does not include the development fee, which has since ballooned to $40.2 million, $31.24 million of which has been approved by the OEB.
The process was delayed when Parks Canada refused to allow the transmission line to pass through Pukaskwa National Park.
Hydro One’s cost estimate is $625 million, plus a $17 million in development fee costs it hopes to recover, for a total cost of $642 million. It’s upper cost is $681 million and it’s not-to-exceed price, filed as part of its application, is $683 million.
Hydro One’s top boss on Thursday touted their bid as the most economically sensible.
"Hydro One continues to advocate for customers and is proud to have introduced a lower bid in this competitive process including a not-to-exceed price," said Greg Kiraly in a release.
"The future of economic development is bright for northern Ontario and we are committed to delivering this project along with the Northwest Transmission Line to ensure that electricity is available to support a thriving northern Ontario economy."
That number is predicated on the project running smoothly and does not factor in natural disasters, such as an earthquake, or unforeseeable government intervention.
Hydro One filed its application to build the East-West Tie in February 2018, a move NextBridge asked the OEB to dismiss for being incomplete and/or not following the OEB’s own guidelines, a moved the OEB dismissed.
Hydro One was also given the OK to upgrade three transmission stations along the proposed route, at a cost of $157.3 million. The work is expected to be completed in October 2021, which would also be the earliest possible date for the East-West Tie to go into operation.
