New P.E.I. power cable funding announced

The federal government will contribute $50 million for two new electricity cables linking P.E.I. to the mainland, and Premier Wade MacLauchlan says Ottawa could contribute more.

Gail Shea, P.E.I.'s representative in the federal cabinet, made the announcement in Summerside Friday morning.

"I assume this is probably the single biggest project I will ever get to announce," she said.

"We knew capacity had to be increased in order for businesses to be established here and to grow. Not just that, but the fact that we were almost at capacity with the two existing cables."

Two new cables will have a total capacity of 360 MW, replacing the two 100 MW lines currently running under the Northumberland Strait. The two new cables will also run along the bottom of the strait.

The current cables are 38 years old and have a maximum life expectancy of 50 years. Maritime Electric has said it considers every year past 40 a risk.

"Having two cables ensures that you're in a position that if you have to carry out maintenance on one cable, you have capacity in place to be able to supply the entire load," said Angus Orford, vice-president of customer service for Maritime Electric.

The total cost of the projects is estimated between $120 million to $140 million.

Premier to Ottawa Monday

Premier Wade MacLauchlan said the province will share the cost, but did not say how much it would contribute.

"The province is in position to move forward to review options for the balance of the funding arrangements," said MacLauchlan.

He said he will travel to Ottawa Monday to talk to officials about tapping into more funding through the infrastructure fund.

"We're not done yet," said MacLauchlan.

"We haven't given up on some further discussions, perhaps from some other infrastructure funding that may enter into the picture."

Talk of installing a new cable goes back to 2005. The federal Liberal government of Paul Martin promised one, but that project was scrapped after the Conservatives came to power.

How the cable project came to be cancelled was a matter of some dispute. The province said it was a top infrastructure priority, but the federal Conservatives said it wasn't on a list of infrastructure projects submitted by the province.

Charlottetown MP Sean Casey, said in a news release that he was "very pleased to see the Conservative government reinstate the infrastructure investment."

Casey said it was one of the first projects to be abandoned by the Harper government when they gained power and that the Liberal MPs have been asking for the underwaterenergy cables for the last nine years.

Problems with existing cables

Estimates of the cost of a new cable project have varied a lot over the years. Early discussions pegged it between $80 and $100 million. In 2011 Maritime Electric modified its plans, reducing capacity of acable from 200 megawatts to 150 megawatts, and dropping the cost to $78 million.

In June of last year, Maritime Electric president Fred O'Brien said the utility hoped to place orders for a new cable project last fall, and the cost would be between $100 million and $150 million. He said the utility was still trying to secure funding.

The current aging cables have had some problems in recent years. In 2012 there were two leaks of insulating oil, one underwater and one on the New Brunswick side of the Northumberland Strait, which cost about $5 million to repair.

In a statement, NB Power called P.E.I. "an important and valuable customer and partner" and said that it was "pleased to see this investment in our transmission connection."

Future export sales of power to P.E.I. using the power lines helps NB Powerkeep its rates the lowest in Atlantic Canada, said the utility. Last year NB Power had $350 million in export sales.

In an email statement, New BrunswickEnergy and Mines Minister Donald Arseneaultsaid: "New Brunswick and P.E.I. have a longstanding relationship as energy partners and the announcement of todays investment in our transmission system will undoubtedly have positive effects for both provinces."

"I look forward to learning more details about this investment and how we can work together for the benefit of the region as a whole,"Arseneault said.

Installation of the cables is expected to begin by the fall of 2016.