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Montana-Alberta wind power line faces regulatory delays

CALGARY – A merchant power line linking wind generation in Montana to Alberta’s electricity grid will be delayed, but not as long as proponents had applied for.

Provincial regulators denied Enbridge Inc. a request to extend permitting deadlines on the Montana-Alberta Tie Line by a year, instead granting the pipeline and energy giant a regulatory break until May 2012.

Power line builder and operator AltaLink was included in Wednesday’s decision on the 230-kilovolt transmission line by the Alberta Utilities Commission, having also applied for an extension on its substation project associated with the project.

The merchant power line has been in the making for more than five years, with original proponents struggling to find contracts in Alberta, permits in Montana and financing in Canada and the United States.

The line was expected to flow 340 megawatts of wind-generated power by mid-2012 from Great Falls, Mont., to a substation just north of Lethbridge, anchored by take or pay contracts primarily with U.S. developers.

However, in September Enbridge and AltaLink filed separate applications to extend their construction deadlines until Dec. 31, 2012, citing weather and disputes with U.S. landowners and contractors.

Enbridge was noncommital about the regulator’s shortened timeline when contacted Wednesday.

“The extension of our construction permit to May 31, 2012, was an interim decision made by the AUC that will allow the commission more time to consider applications that MATL currently has before the commission,” Enbridge spokeswoman Jennifer Varey said in an e-mail.

Earlier this year the Calgary-based company said it would be investing $300 million for the 2012 launch, followed by a low-cost expansion for 2014.

Enbridge bought the project for $70 million from cash-strapped developer Tonbridge Power Inc. in August, acquiring at the same time legal challenges on both sides of the border.

One such battle is in front of a Montana district judge today, a case challenging the MATL’s right to force U.S. landowners to cede property under “eminent domain” as unconstitutional.

As a result of the delays, AltaLink was unable to complete construction on the Picture Butte substation needed to connect the transmission line with the provincial grid and also asked for an extension, said spokesman Scott Schreiner.

The regulator’s decision giving until May 31 as an interim deadline while it reviews both applications will be respected, he said.

“That’s what we’ll work with and we’ll continue with our construction efforts to be able to get that substation in place by that time,” Schreiner said.

The 340-megawatt capacity line was fully contracted by wind power generators, and supported on the American side by a low-cost, 30-year loan from the Western Area Power Administration of the U.S. Department of Energy.

The $161-million federal stimulus loan could be compromised if the project is delayed beyond April 30, 2012, according to MATL proponents.

Back in Alberta, the Alberta Electric System Operator was aware of the commission decision and was planning around it, said spokesman Alan Clay.

“As the system operator we are doing all the necessary work to prepare to integrate the new intertie into the Alberta interconnected electricity system in a safe and reliable manner,” Clay said.

Alberta currently has access to about 10,000 megawatts of power off a maximum capacity of 13,000 MW.