Maine group to build N.Y. cable system

A Maine-based consortium of construction and energy companies on Wednesday was named to build, own and operate an undersea cable system connecting the energy-pinched Long Island, N.Y., electrical market to more abundant power supplies in Pennsylvania, New Jersey and Maryland.

After an eight-month review, the Long Island Power Authority awarded Neptune RTS, headquartered in Pittsfield, the contract for its proposed pair of 67-mile-long, direct current cables running between transfer stations in Sayreville, N.J., and Hicksville, on the south shore of Long Island.

James Broder, an attorney with project partner Curtis Thaxter Stevens Broder & Micoleau in Portland and general counsel to the Neptune Project, said plans call for construction on the project to begin in 2005. The partnership hopes to begin transmitting power over the line in the summer of 2007.

Cianbro Development Corp. is the managing member of Atlantic Energy Partners, the holding company behind Neptune Regional Transmission System LLC. Other partners are CTSBM Investments LLC of Portland, Energy Security Analysis Inc. of Wakefield, Mass., Boundless Energy LLC of Plainville, Conn. and Halifax, Nova Scotia-based Standard Energy Development Inc.

Broder said the project went up against as many as 14 competing bids. Several meetings, as well as 14 responses for data requests and clarifications from LIPA’s 16-member selection committee, were required before the decision was made final.

Project costs and partnership credentials were key considerations during the review, according to LIPA spokesman Michael Lowndes.

“Part of that criteria was to find someone who has a realistic chance of completing this work,” Lowndes said. “It is a major project.”

Another important factor was the need to clear complex permitting hurdles.

“The [Neptune partners] have done a lot of the leg work [on permits],” Lowndes said. “And we’re very concerned about that, considering what we are going through right now with the cross-sound cable.”

LIPA is locked in a battle with Connecticut’s attorney general to permit a previously completed, 24-mile cable stretched from New Haven Harbor, Conn., to Shoreham, in northern Long Island. The U.S. Department of Energy forced a shutdown of the 330-megawatt line until the dispute is settled.

Broder said the Neptune project has secured the necessary permits from New York and New Jersey state authorities. It is in the final stages of the last remaining permit requirement from the Army Corps of Engineers.

“The project is virtually fully permitted,” Broder said.

The partnered companies will now move on several fronts: to arrange equity and debt funding, to complete the final real estate transactions, and to negotiate the interconnections with abutting utilities. LIPA also on Wednesday awarded four other contracts for new generation and renewable energy sources, part of a $3 billion project intended to deliver an additional 1,000 megawatts of power to the island’s 2.8 million residents.

The LIPA contract calls for the Neptune partnership to own and operate the cable much like a pipeline. Long Island will pay a fee to lease capacity on the cable and will buy its power directly from generating companies in the New Jersey region. Neptune would charge a transmission fee for transmitting the power across the floor of the Atlantic Ocean to a receiving substation in Hicksville.

Neptune proposed a 20- or 25-year arrangement to utilize the cable’s full 660 megawatts of capacity. LIPA has not yet determined the duration or dollar amount of the agreement. Broder and Lowndes both declined to discuss dollar amounts associated with the contract.

In its fullest form, Neptune proposes an offshore direct current cable strung in separate legs from Nova Scotia to New Brunswick to Manhattan and New Jersey. The line would allow energy grid managers to shift peak electrical loads to Nova Scotia, where power is in short supply during the winter, and to the Eastern Seaboard, where air conditioners drain power supplies during the summer months.

Broder said discussions are underway for other possible Neptune contracts in Halifax, but that the Long Island project will be the company’s focus for the foreseeable future.

“I know I’m going to be spending all my time for the next six to nine months getting this thing to a construction start,” Broder said.