CIB to invest $650M in Lake Erie Connector project
The Canada Infrastructure Bank (CIB) has announced it will pay more than $650 million to support the construction of a massive electricity transmission line in Ontario.
The agency has said it will contribute up to 40 percent of the cost of the $1.7-billion Lake Erie Connector project. The project developer, ITC Investment Holdings, and its partners are on the hook for the remaining $1.05 billion.
The Lake Erie Connector is a proposed 117-kilometre transmission line that will connect Ontario with the Pennsylvania-based PJM Interconnection a regional transmission organization that coordinates the movement of wholesale electricity in all or parts of 13 states in the American Midwest and Atlantic coast. PJM is the largest electricity market in North America.
The aim of the project is to help lower electricity costs for customers in Ontario and improve the reliability and security of Ontario’s energy grid. The 1,000 megawatt, high-voltage direct current connection—part of which will run under Lake Erie—will reduce greenhouse gas emissions and be a source of low-carbon electricity in Ontario and the United States.
“This project will allow Ontario to export its clean, non-emitting power to one of the largest power markets in the world and, as a result, benefit Canadians economically while also significantly contributing to greenhouse gas emissions reductions in the PJM market,” said Canada Infrastructure Bank CEO Ehren Cory. “The project allows Ontario to better manage peak capacity and meet future reliability needs in a more sustainable way. This is a true win-win for both Canada and the U.S., both economically and environmentally.”
During construction, the project is expected to create nearly 400 jobs per year and drive more than $300 million in economic activity. It is also expected to help Ontario optimize its current infrastructure, and avoid costs associated with existing production curtailments or shutdowns.
The CIB, which is mandated to invest $35 billion and to attract private-sector investment into revenue-generating infrastructure projects, expects to achieve financial close on the project later this year. Construction should begin shortly afterwards.
ITC will own the transmission line and be responsible for all aspects of design, engineering, construction, operations and maintenance. The organization acquired the Lake Erie Connector project in 2014 and has received all necessary regulatory and permitting approvals.
The Lake Erie Connector has tremendous potential to generate customer savings, help achieve shared carbon reduction goals, and increase electricity system reliability and flexibility,” said ITC Investment Holdings COO Jon Jipping. “We look forward to working with the CIB, provincial and federal governments to support a more affordable, customer-focused system for Ontarians.”