Canadian company seeks U.S. government loan guarantees for cross-Strait power cable

A Canadian company wants the U.S. Department of Energy to guarantee up to $484 million in loans to help cover the cost of a nearly $1 billion Juan de Fuca underwater cable project from Victoria to its likely Port Angeles terminus: a substation next to Peninsula College.

Sea Breeze Power Corp. is seeking the loan guarantee through federal stimulus funds available under the $787 billion American Recovery and Reinvestment Act of 2009.

Sea Breeze wants to build a 31-mile cable under the Strait of Juan de Fuca from Victoria to Port Angeles, connecting the federal Bonneville Power Administration’s U.S. power grid with energy generated on Vancouver Island by renewable sources such as wind and solar power.

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The 550-megawatt cable will provide enough electricity to power about 500,000 homes, Doug Nass, general manager of Clallam County Public Utility District, said Monday.

Under sea floor

Encased in a foot-wide tube and snaking toward Port Angeles at a depth of 3 to 6 feet beneath the Strait’s floor, the cable would reach land at the base of Liberty Street.

Its final connection would be up Liberty Street to a BPA substation just west of the Peninsula College campus.

There, the cable’s DC power would be converted to AC power at an as-yet unbuilt conversion facility, Sea Breeze Power Corp. President Paul Manson said Monday.

Manson said he expects an answer from the Department of Energy “in a timely manner in the next several months.”

The project has received go-ahead permits from the U.S. Department of Energy and Canada’s National Energy Board.

PUD blessing

In addition, the Clallam PUD board has said it supports the project and the loan guarantee.

There is $8.5 billion available for Sea Breeze’s request, Nass said.

“I think we have an excellent chance for being well considered,” Manson said.

The project will take an estimated 26 months to complete and could be finished in 2012.

But it may take longer and be more expensive if the loan guarantee is not approved because the effort would be absent “the comfort of having the government standing behind us,” Manson said.

The project will add a second main transmission line for the region. The other line comes from Olympia.

“This line would allow the entire region to receive electricity from two directions, not just one,” Manson said.

“We would enormously be increasing reliability to that region.”

Though most outages on the North Olympic Peninsula are caused by downed trees and limbs, “this gives us another feed from the [Bonneville Power Administration] system if the main system is down,” Nass said.

“Our hope is it would help.”

Lease costs

Clallam County PUD and Sea Breeze may work out an arrangement were some or all of lease costs at the substation near the college are covered if PUD receiving some of the cable’s renewable energy, PUD Commission President Hugh Haffner said.

Clallam PUD needs it to adhere to state Initiative 737, which requires 15 percent of the PUD’s power to be derived from renewable resources by 2020, Haffner said.

“If we can work out some kind of a deal on renewable resources in lieu of a lease or at least a portion of it, that could keep our costs down,” Haffner said.

Standard Bonneville power costs about $30 a megawatt compared with $120 a megawatt for renewable energy, Haffner said.

“We’ve got the opportunity to make two wins out of this,” Haffner said.

“We get redundancy, and we get a chance for renewable resources.

“They really want that site for a substation, and we really need some renewable power.”

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Senior staff writer Paul Gottlieb can be reached at 360-417-3536 or at paul.gottlieb@peninsuladailynews.com.

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