Calgary-based Enbridge announced it has repaid a $151 million federal loan to the Western Area Power Administration for construction of a high-voltage transmission line between Great Falls and Lethbridge, Alb., which is on schedule to be finished by the end of the year.
The transmission line will connect the electrical grids of Canada and the United States at Great Falls and Lethbridge and carry power produced from wind farms being developed in rural Montana and Alberta to power markets.
Toronto-based Tonbridge, the original developer, took out a $161 million loan from WAPA in 2009 and had drawn $151 million before it encountered financial shortfalls due to legal conflicts with its general contractor and landowners.
The loan was part of $3.25 billion in American Recovery and Reinvestment Act borrowing authority earmarked for transmission projects.
In November 2011, the U.S. Department of Energy’s Office of Inspector General criticized WAPA for not better monitoring the project after it fell behind schedule and went $70 million over budget.
Had the project failed, the Inspector General said in its report, Western, and ultimately taxpayers, would have taken the loss.
WAPA is one of four regional power marketing arms of the Department of Energy.
Enbridge later purchased the project and assumed the loan and payment was made in the last couple of days, Darryl James, who handles public affairs for Enbridge in Montana, said Thursday.
“It just made sense from a business perspective to go ahead and get that loan out of the way,” James said.
Taxpayers had been concerned about whether the loan would be repaid, James said. It’s important that they know the loan has been repaid and that the project will be completed, he said.
“We’re on schedule for completion this fall,” James said. “The only holdup now is in Alberta.”
Construction in Alberta is not as far along as it is in Montana, James said.
The entire 230-kilovolt line is 214 miles long.
In Montana, poles have been erected on 115 miles of the 130-mile route from the Canadian border to 15 miles north of Great Falls, James said.
About 40 miles of wire have been strung on the poles.
That 40-mile stretch was energized last week to facilitate the NaturEner USA’s Rim Rock Wind Farm in Glacier and Toole counties, James said.
Keri Fulton, deputy press secretary with the U.S. Department of Energy, confirmed that the $151 million has been repaid.
“We’re pleased Enbridge is taking an important next step forward for this project and our transmission system,” she said.
The federal stimulus loan was essential in getting the power transmission project off the ground, said Richard Bird, Enbridge’s chief financial officer.
“Now, as the MATL project approaches completion, it is beneficial for us to replace WAPA’s initial funding with conventional financing sources available to us,” Bird said in a statement. “We look forward to working with WAPA on future transmission projects.”